Love thy Neighbour
We are programmed to find a reason to not like our neighbours, per research we go out of our way not to talk to them!
I get the feeling we perhaps take the same approach in our value chains, it is often easier and less hassle if we just meet once a year and agree a price, we can exchange disappointment in emails and an irate phone call that is often treated with a pinch of salt.
“We like our transactional relationship just the way it is because it means less hassle and a simple life”.
If that is you, I can tell you that times are changing and you will soon start to fall behind. Momentum is building, it’s a movement from transactional to transformational relationships, but it requires more than a good process.
A CCM survey in 2010 said that only two in 10 of their collaboration efforts delivered significant results. The remaining 80 percent represent more than just lost opportunities to add value. Collaboration is not a new concept and we are starting to hear “we tried that before and it did not work”, collaboration is starting to just be a buzzword a bit like ‘lean’ or ‘continuous improvement’.
If we can’t make collaborations work, we will not only fail to achieve savings, but we will destroy the enthusiasm for further attempts.
At Pollen, we believe it is our mission to transform value chains. Our position in the market place allows us to see things through a different lens looking at industries not businesses, projects that require competitors, customers, suppliers, and partners to work together.
At first glance it looked like a no brainer for us, an opportunity to facilitate a process and bring new ideas and perspectives to the table as our core skillset and industry knowledge positioned us in a great place to deliver an excellent proposition.
We began to facilitate collaboration between suppliers and retailers, immersing ourselves into each of the businesses, allowing us to really see how it works from the inside out.
We have learnt quickly and are open enough to say, we under estimated that what we were creating is a fundamentally different business model and new way of working! A way out of the damaging spiral of antagonistic relationships, was not all about process and intellect.
We identified two types of reasons for why collaboration fails;
One – What everybody knows and is willing to talk about
- Companies may; lack the commitment they need from senior management to drive the collaborations, or the front-line teams don’t show the same enthusiasm and commitment as their leadership does.
- The efforts may not have the sufficient resources to make them work, or limited resources are spread too thinly over too many initiatives.
- The incentives of the different parties involved in the collaboration are often misaligned, making it difficult even for enthusiastic, committed staff to make the collaboration work while still fulfilling their other targets.
Two – What no one is willing to talk about
- We work in a sector where there is a history of difficult relationships, trust stops us from sharing important information, leading us back to our separate silos—and a guaranteed recipe for failed collaboration.
- We will share so much but we are not willing to “air our dirty laundry”, the things we are embarrassed by and frustratingly the areas that are often the greatest opportunity for collaboration.
- We know nothing about each other’s economic business model and we are not willing to admit to it, which means we are starting from a base lacking knowledge or empathy.
- We are not sure what collaboration means, or how we apply it, it feels like a one off exercise and just something we are told to do, which in turn means;- We don’t really know where collaboration should stop and what are the boundaries in line with the Grocery Code of Conduct.- Transformation might impact my empire and I am not willing to give it up.
All the above may be valid reasons and proven research as to why things do not work, but like our relationships with our neighbours, partners, friends and colleague we all do one thing to make them work, we believe in their long-term value and continue to work on them. So how do we get it right?
Value Chain collaboration needs to be more than a transaction or project, it should be a core value of each business involved.
At Pollen, we shaped our values to how we operate each day and when working with businesses we expect everyone to share these values;
“The morals of trust, integrity and respect are at our core. Our partnership approach breathes new life into collaboration. Teamwork is both internal and external, bringing energy, adventure, courage and creativity to everything we do. Working with us and working for us will be enjoyable and fun, we will continually challenge each other, the solutions found together will be some of our brightest and proudest moments. Together we will never stop learning and evolving”.
The first step for everyone is to take the leap of faith to trust the other party, do the right thing and call out deviations from the values.
Secondly making collaboration a way of working not a one-off exercise, by establishing basic principles, joint metrics, and rhythm in dialogue.
Thirdly a mediator is not a bad idea. At Pollen, we have acted as the “black box”, someone for each business to confide in, to assess what needs to be shared and giving an objective assessment on the right way forwards without emotion or attachment, we think this could be part of the secret sauce to collaboration success.
Forth, follow a model and a journey, but do not be prescriptive in the tools and process, shape this to meet the needs of the opportunity and match it to the culture, size and maturity of the businesses.
Our Fifth and final tip is setting up sophisticated benefits sharing models on day one or for wholesale collaboration across the industry will not work, developing principles, and having grown up conversation is the right way forwards depending on the aligned objectives of the category. Such as part of the savings being allocated to a joint pool for re-investment in marketing, promotions, research, or new capabilities.
Several industries must look at the FMCG sector and laugh at just how far behind on this journey we are. We could easily get on our high horse and complain about some of the unique forces at play, such as; the retailers’ strength, fragmented supply base, short-term focus, product life cycles and how lean we need to run just to survive. But that is just not us and just not the sector we work in, we know we can do better, its fast paced and we do not stand back enough.
The savings and opportunities are significant, if we don’t seek this value, imports will dominate and your competitors could get ahead. Meaning, now is the time to get our heads together, catch up and maybe even get out in front.