Issue link: http://www.e-digitaleditions.com/i/210252
HRO Today Forum Europe Preview and decisions. Whether these behaviours are driven by fear or consequence, they prevent the two parties from working as an integrated team, resulting in an inability to increase performance, mitigate risk, and drive innovation and transformation. Strong governance is essential to drive transparency and focus. Executive sponsorship and customer engagement are keys to execution. Commercial transparency. Money is often cited by people in relationships—personal or business—as the main cause of their unhappiness. A goal of strategic business relationships is to deliver value to organisations which is enabled by financial delivery. Beyond the contracting process, there must be an unrelenting focus to protect service delivery, drive cost improvement, and prioritise investments. This will encourage continuous improvement and accelerate incremental business value. Cost is a much-maligned term within relationships, synonymous with attacking supplier margins and viewed as a tactical approach. Nothing could be further from the truth if costs are managed transparently and as a core operating principle. Critical success factors include understanding the total cost of delivery and cost drivers, clear delegation of financial authority, incentives to drive aligned behaviours, and a prioritised portfolio of improvement and transformation activities. Behaviours and culture. Relationships ultimately succeed because of people and their commitment to the vision and strategy. Good people will want to work within the right environment and great people will want to make it even better. Take the time to really understand and articulate the behaviours that you want to see across your relationship. Make sure that you apply as much due diligence to those behaviours as you do in any area of capability. Gain a unified perspective of the relationship culture from both parties and reward the right behaviours. The right cultural fit and behaviours will drive the success of a relationship. A relationship cannot be successful if there is a lack of trust, honesty, and commitment. It requires strong sponsorship—rewarding right behaviours and eliminating poor ones. Capabilities. What we needed yesterday is not what we need tomorrow and won't be what we need in the future. Business dynamics change and relationships must evolve. A major client complaint is that the team members from their outsourcing provider change. But consider your own career. How long would you want to stay working in the same role and with the same people? It's natural for great people to want to grow and pursue opportunities, so when it happens, don't be surprised. The right cultural fit and behaviours will drive the success of a relationship. A relationship cannot be successful if there is a lack of trust, honesty, and commitment. It requires strong sponsorship—rewarding right behaviours and eliminating poor ones. Recognise the reality, plan for it, and use it as a significant advantage for your strategic relationship; Create the attraction for people to want to work within the relationship, and extend opportunities for development between organisations; and Institute formal knowledge, capability, and people processes across the relationship including targeted recruitment and effective retention policies. This should be a formal, collaborative, and iterative process led by the senior leaders and used to evidence the cultural alignment and desired behaviours. Moving Forward Like any relationship the foundations must be laid properly to enable growth and change which means starting with your operating model design and driving your sourcing strategy. Business dynamics change frequently and a strong relationship must have the capability and agility to predict, react, adapt, and drive change to remain relevant and deliver value to customers. It's important to remember that whilst contracts are signed between organisations, they are operated by people and providing a solid foundation and supporting structure will enable rather than inhibit performance and accountability. Relationships thrive when people want to be a part of them! Jon Kirby is CEO of Strategic Sourcing Excellence and he will be presenting at the HRO Today Forum Europe, 12 – 14 November, in London. AUTUMN 2013 | www.hroglobal.com [11]