A few weeks ago Dalip wrote about the financial cost of bad trading relationships. Much of the problem stems from how preconceived notions each side has about their partner (either the buy side or the sell side) impacts how they treat one another. Can you imagine this:
If you say no then you are not being truthful, because we have all been there. These assumptions about our trading partners often lead to behaviors that destroy value for both parties. So what needs to change? I will lay that out in my webinar with IACCM next week entitled – How to Build High Value Relationships Under Theory Z. Here is a brief synopsis of what I will cover:
What Needs to Change?
First, the role of the contracting professional needs to be redefined. The traditional role of being a contracting process expert is fine but to build high value relationships you need to be more than that. There are four (yes 4) additional roles that you MUST start playing – Strategic Business Partner, Change Agent, Risk Manager and Relationship Manager. These new roles are much more strategic and require a higher level of strategic competencies such as change leadership, problem solving, collaboration, communication, etc..
So the second change required is to build those strategic competencies within your contracting organization. This will require an investment in your own skill set and your people but the return on that investment can be significant. My guess is that these competencies have never been considered when you were looking at training programs? You are not alone. Most contracting organizations would list negotiating, contract terms, contract writing, etc. as potential areas for training. While these functional skills are important, they only support the role of process expert. The other roles cannot possibly be executed without those higher level strategic skills. Once those skills are in place, you are ready to meet your next challenge.
The third change required is to change the context under which the contracting organization operates. This sounds easy but convincing your company to invest in this function and accept your new role can be a challenge. Today, I bet your C-Level executives look at the contracting organization as a required function but one that is not necessarily strategic. You will need to prove that you can be a strategic business partner and add value beyond writing contracts. Today the “context” that you are operating under is that of process expert – that’s not a bad thing but it’s simply not enough. You will need to convince the rest of the organization that a more strategic role is necessary and of value – that will create a new context. Without the acceptance of your new role throughout your company (“context”) all the training, new tools, new process (“content”) will be of little use. There is an old saying “context always trumps content” – believe me it is real and must be tended to. Hint: this is where the Change Agent role is critical.
Finally, the fourth change required is a new approach to building relationships. We have a tendency to spend so much time developing measures, metrics, KPIs, etc. to monitor the relationship we forget that the launch is critical – how we establish trust, commitment and comfort with one another. Getting any relationship off on the right foot at the beginning is a MUST HAVE. In addition, we also pay little attention to expanding the relationship beyond monitoring those metrics / KPIs we spent so much time developing. The real value is in finding ways to mutually grow the relationship after the marriage is consummated. We have numerous examples of where trading partners have been able to significantly enhance each other’s business (can you say Apple 😀 ) If you want details on the new approach simply contact me and I will be happy to chat.
In summary, if we want to build high value relationships, we have a bit of work to do, internally first. Make 2016 the year to make the change happen.
Let us know what you think and join in the conversation . . . . . . . . .
Latest posts by Anne Kohler (see all)
- Do You Know the Difference Between Strategic Sourcing & Category Management? Consulting REMOTELY - April 2, 2020
- Do You Know the Difference Between Strategic Sourcing & Category Management? Working in Teams REMOTELY - March 19, 2020
- Do you Know the Difference Between Strategic Sourcing & Category Management – Recognize the Value of Supplier Diversity! - March 11, 2020