By Frank Treanor Best Practice Business Strategy Thought Leadership 22nd January 2016

The contradiction with ‘collaboration’ in Procurement

There are many words and phrases in all walks of life that are misguided, misquoted or simply misused. In the world of procurement, one such overused idea is that of ‘collaboration’.

One dictionary’s definition of the word reads, ‘a person who works traitorously with an enemy’ and when given this positioning perhaps words like cartel and conspiracy also spring to mind. I’m sure that most senior executives do not have this intent in mind, although we’ve all met the odd bad apple over the years. But whatever the motivation, the word hardly describes an idyllic win-win scenario.

Infighting leaves a worse taste than an honourable enemy

Within the supply chain, competition, legislation, customer demands and other external pressures often force suppliers to play their cards close to their chest or turn the other cheek, but conflict (in the guise of collaboration) can be internal too. At one level, particularly in major corporates, you have above-market functions or central management where senior executives talk ‘strategy’ with shiny management consultants pedalling another project initiative. This is often theory-based and, of course, underpinned by chunky fees for a new technology implementation. Whereas, in the engine room you have, arguably the most talented and productive people in the business, working in the local operating companies with clear business objectives to achieve and their own P&L to manage.

It is where these two sides of the same team meet that the darker definition of ‘collaboration’ sometimes kicks-in and the senior executives can develop Teflon shoulders and shape-shifting capabilities. You don’t need a long career in the corporate world before you find yourself caught up in such an unpleasant scuffle.

There is a better way!

Interestingly, while there is nothing wrong with healthy, hard fought competition, genuine working partnerships between multiple suppliers and their customers do happen. These are built on mutual benefit and clear, open communications where everyone is working for the same goal.

What makes this approach work is getting away from the misapplied idea of collaboration. Instead of conjuring up images of hushed conversations in darkened corridors followed by secret messages and blind-copied emails, think commonality of vision and win-win for everyone.

A typical scenario might look something like a supplier being given clear, simple rules of engagement and realistic, achievable performance expectations – jointly agreed. This means that service, reliability, and value become the focus rather than constant cost-reduction initiatives. The result is that suppliers get appropriately remunerated (not begrudgingly) from clients who are delighted with the delivery.

Internally, a similar approach could be taken. All it takes is a little thought, a genuine desire to fix a broken ideology. Then any business could remove the palpable groans from the shop floor when local teams are informed of the latest transformative project being inflicted on the business from a great height.

Beware Collaboration! – it isn’t necessarily in your best interest

We should all appreciate the truly seismic changes now happening in global supply chains and the potential for mashable, disruptive technologies to replace established solutions. But it is in the interest of the large consultancies and established enterprise technology providers to collaborate and control this agenda, and that isn’t necessarily in the best interests of their corporate customers. The cost savings and efficiency promises touted by consultants who persuade high-level executives of the latest ‘magic fix’ may actually be diverting your attention away from the revolution that’s occurring on your doorstep. The impact of a misguided efficiency project could mean that your local teams are left struggling to deliver the performance improvements promised by the central teams to the CEO, when they should be focused on innovation, growth, and the bottom-line.

The result, and we have all seen this in large companies, is that morale crashes, talent leaves, and effective relationships within the supply chain (internal and external) are put under the wrong kind of pressure. It doesn’t have to be like this, and in future posts we’ll examine a better way to create highly motivational energy and unleash the latent capability within a business – just don’t use the word “collaborate”.

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