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Negotiating Partnering Relationships: From Confrontation to Collaboration
By Professor Colin Coulson-Thomas

Business, channel and supply chain partners can collaborate in the production of sales and marketing support tools. Shared costs and increases in productivity and performance across a wider range of activity can significantly enhance financial returns. The chances of cooperation may be boosted by conscious effort to create a partnering relationship.

Winning business teams setting out to build relationships with customers and potential business partners sometimes assume a degree of harmony between organizations that may not exist. The various parties to new business and partnering negotiations may not be of one mind. The negotiation challenge may be to move from confrontation to collaboration by helping those involved to articulate their interests, understand contrary positions and conclude mutually acceptable accommodation.

Detailed and final negotiations can open up a Pandora’s box of arguments and lead to disagreements, disputes and confrontation between contending viewpoints. Latent conflicts may be brought to the surface. Supply chain partners may display protective behaviour. Different interests may seek to use meetings for their own ends. New ways may need to be found to handle disagreements and reconcile differing requirements.

Sensitive negotiators recognize that people may have different perceptions of the desirability, direction and consequences of certain outcomes. Some may feel strongly about certain issues. Old debates, clashes of personality, divisions within the boardroom or tensions between sales channel partners may be brought to the surface.

Within many markets there is a legacy of distrust and much scope for misunderstanding between negotiating parties and head offices and operating units. Some may harbour suspicions that particular groups are seeking to benefit from changes at the expense of others. Certain partners may feel they are being asked to absorb an unfair proportion of budget cuts or make a disproportionate contribution.

Winning business and partnering negotiators should endeavour to identify differing expectations and perspectives and anticipate potential flash points. There might be varying degrees of misunderstanding between national cultures and distinct minorities within an international organization or marketplace. The greater the diversity between the different parties to a negotiation the more likely it is that outcomes may need to reflect local situations.

Possible arenas of confrontation need to be recognized and likely conflicts addressed. New business and corporate communications can themselves become a source of distrust and tension, especially when words are not consistent with deeds. People may perceive a gap between rhetoric and reality. For example, corporate messages might stress the need to adopt a longer-term approach to the building of partnering relationships with customers while directors take short-term actions to cut costs.

The Centre for Competitiveness at the University of Luton has examined the approaches of a wide range of organizations in many sectors and identified critical success factors for managing change, competing and winning. The findings summarized in the book ‘Transforming the Company’ (1) reveal that successful companies or ‘winners’ display attitudes and behaviours for building relationships and partnerships that differ from those of ‘losers’ or businesses that struggle.

Successful and unsuccessful companies pursue very different approaches to avoiding disputes, handling confrontation and encouraging collaboration. People associated with ‘loser’ companies are cautious collaborators. They stress the time, effort and expense required to establish and build relationships, and they often conclude that the likely results do not justify the investment required.

In making such choices losers act as though working with others is an option rather than a necessity. At heart they are reluctant to share and would prefer to operate alone. They keep to themselves in an attempt to avoid becoming entangled in rivalries and drawn into disputes. When negotiating they pursue divisive strategies and seek to benefit at the expense of other parties. They sometimes foment conflicts in order to achieve sectional interests.

Some losers prize their independence so much they pass up opportunities to grow that would require them to work with colleagues and business partners. Collaboration is seen as a constraint upon their freedom of action. They settle into familiar ways of operating. If existing arrangements and practices appear to work reasonably well they are reluctant to consider alternatives that might offer additional benefits.

Winners are more willing to work with colleagues and are more likely to be prepared to co-operate with other complementary suppliers. They see and seek the advantages of collaboration. It might enable them to learn and develop. It may allow them to offer a wider range of services to their customers and pursue a broader range of opportunities.

Winners are usually receptive to approaches from others. They are open to new ideas. They welcome suggestions for improvements and innovation. They actively search for potential business partners and explore possibilities for joint initiatives or collective action. They do not mind the confrontation and argument that may need to precede mutual respect and a meeting of minds. They endeavour to find common ground, resolve conflicts and promote shared interests and goals.

Collaboration extends to ‘external’ parties. As companies outsource and focus upon core competencies they may hive off or transfer various activities to specialist suppliers. As a consequence combinations of complementary organisations work together in supply chains rather than operate alone as single entities to deliver value to customers. Each concentrates upon what it does best. A company that endeavours to do everything itself may become a ‘jack of all trades and master of none’.

Consortium responses to invitations to tender for complex and large-scale projects are also increasingly common in certain sectors. Only by working together may the respondents be able to assemble the capabilities required. Companies that collaborate with business partners may significantly improve their prospects of winning a major contract.

It helps if aspiring collaborators have compatible interests and complementary capabilities. When they need to work with others losers tend to seek out potential collaborators with similar characteristics to themselves. As a consequence, they sometimes find in crisis situations that the whole is not necessarily greater than the sum of the parts. Like drunks endeavouring to prop each other up they compound each other’s weaknesses.

If the parties endeavouring to co-operate are very different they may not have enough in common to cement a relationship. On the other hand, if they are so alike as to add little to each other’s capabilities collaboration may not be justified. Winners are more likely to understand that lasting relationships often involve dissimilar but complementary partners that allocate roles and responsibilities according to comparative advantage.

Losers tend to be essentially selfish where relationships are concerned. They seek to co-operate on their terms, and they often put the bare minimum of effort into maintaining them. They hold back emotionally and intellectually and endeavour not to become too deeply involved. They are wary and may even undertake cost-benefit assessments. When negotiating they endeavour to ‘score points’ and adopt win-lose approaches.

Collaborative ‘partnerships’ can take various forms. Whether an informal arrangements or a formal joint venture, such relationships can be of great importance. Opportunities can be addressed and significant amounts of new business won as a result of co-operative action. The consortium bid for a major contract, with each member focusing upon an area of core expertise is increasingly acceptable and may be encouraged.

Winners work hard at reaping the benefits of co-operation. They commit the effort required to establish and regularly review collaborative processes and practices. For example, they may put practical arrangements in place to clarify the ownership of customers, prevent poaching and protect intellectual property.

Winners also recognise that if internal and external relationships are to grow and deepen they should be acceptable and mutually beneficial to all the parties involved. Instinctively, when negotiating they look for win-win outcomes. They also avoid rushing. Some parties will take longer to adjust and integrate than others. Winners also understand the dynamic nature of associations and arrangements. Time, effort and care may need to be devoted to them if they are to become more intimate.

Winners willingly commit. They become involved. They are flexible and understanding, and prepared to do things differently to accommodate particular and legitimate interests. They are also not ‘fair weather friends’. They can be relied upon in crisis situations.

Collaboration should not be pursued at any cost or become a distraction. Some losers devote great effort to achieving ‘teamwork’ that may conceal or sideline differences and gloss over concerns in order to achieve a bland consensus. Winners adopt a more entrepreneurial approach. They encourage open and frank discussion. They become demanding collaborators and partners. On occasion they may create waves in order to make faster progress.

Overall winners recognise that a lack of tension may mean the absence of ambition. The quiet organization may be asleep. Their drive and desire to innovate and push back the boundaries of what is possible may provoke confrontation between those favouring the status quo and those who desire to move on. The need for activities and processes for building mutual understanding, reconciling differences and building collaborative relationships is understood and addressed.

Discussion, informed debate, a willingness to challenge and a degree of confrontation is sometimes desirable. It can prevent complacency, spur innovation and lead to higher performance. Disputes are usually better in the open - where efforts can be made to resolve them - than hidden when they can fester.

It may be possible to avoid some conflicts by ring fencing certain activities or giving one or more of the protagonists greater autonomy. Involving different parties in discussions at proposal or concept stage may give them an opportunity to flag up areas of possible difficulty. Although their participation might delay a decision, implementation may be speeded up due to the greater perceived legitimacy of the process and likely outcomes made more acceptable.

Possible mechanisms can range from an ad hoc discussion forum or inter-unit team to a partnering agreement or issue monitoring and management. A process may also be required for handling dysfunctional conflicts. This could provide a framework for identifying common ground, isolating points of difference, and assessing and addressing the root causes of disputes. Organizational boundaries may need to be redrawn, roles and responsibilities reallocated, processes re-engineered and strategies reviewed.

Winning new business and customer relations teams can play a key role in moving from a climate of confrontation to a culture of collaboration. They can identify supporters and opponents of change and endeavour to ensure each understands the others viewpoints and legitimate concerns. They can put feedback loops in place and encourage senior managers to listen. They can assess tolerance for diversity and whether sufficient discussion and debate is occurring.

Business development teams and key account managers should work to achieve mutual respect and the credibility of two-way communications. Colleagues should be encouraged to match words with deeds. They need to distinguish between disruptive opposition and constructive questioning and encourage the latter. Customers and business partners should be encouraged and helped to raise concerns, express viewpoints, explore issues, reconcile opinions, foster collaboration and share learning.

Professor Colin Coulson-Thomas
Professor Colin Coulson-Thomas
About the Author:

Professor Colin Coulson-Thomas is an experienced chairman of award winning companies and consultant. He has advised over 80 boards on how to improve board and corporate performance, leads the world's largest winning business research and best practice programme, and has reviewed the processes and practices for winning business of over 50 companies.

Following marketing and general management roles Colin became the world's first Professor of Corporate Transformation and more recently Process Vision Holder of major transformation projects. He is the author of over 30 books and reports, including ‘Individuals and Enterprise’ (Blackhall Publishing, 1999), 'Shaping Things to Come' (Blackhall Publishing, 2001), 'Transforming the Company, Manage Change, Compete and Win' (Kogan Page, 2002 and 2004) and ‘The Knowledge Entrepreneur’(Kogan Page, 2003). Colin has spoken at over 200 national and international conferences and corporate events in over 20 countries. He can be contacted:

Tel: 01733 361 149
Fax: 01733 361 459
Email: colinct@tiscali.co.uk
Web: www.ntwkfirm.com/colin.coulson-thomas

Transforming the Company: Manage Change, Compete & Win
Colin Coulson-Thomas shows that to bridge the gap between rhetoric and reality, business people must make far-reaching decisions about the value to them and their companies of particular theories, past assumptions and traditional approaches. Based on original research, the first edition of this was ahead of its time and predicted many of the current management trends. The author now brings the text bang up-to-date for the 21st century. This second edition of Transforming The Company shows how to turn theory into practice by highlighting the obstacles and barriers that confront companies when trying to bring about change. For management at all levels faced with this task, this thought-provoking book will inspire and enlighten.

The Knowledge Entrepreneur: How Your Business Can Create, Manage and Profit from Intellectual Capital  by Colin Coulson-Thomas

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The Knowledge Entrepreneur: How Your Business Can Create, Manage and Profit from Intellectual Capital
In many companies knowledge management has focused almost exclusively upon the packaging of existing knowledge. This book is designed to help readers boost revenues and profit by significantly improving the performance of existing activities and also creating new offerings that generate additional income. It shows how practical knowledge-based job-support tools can transform work group productivity, and reveals the enormous scope for addressing contemporary problems such as "information overload" with imaginative responses. Additional information includes: a list of possible commercial ventures; detailed checklists that can be used for identifying and analysing opportunities for knowledge entrepreneurship; and exercises for assessing entrepreneurial potential and "scoping" possible products and services. The free CD-ROM packaged with the book gives examples of particular knowledge-based job support tools that have dramatically improved desired results in crucial areas such as winning more business.







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