Food for Thought 

Network Relationship Management

Innovation has always been the lifeblood for continued prosperity for organizations. Whether developing new products and services or reducing costs through efficiencies or creative partnering, innovation is vital. Standing still has never been an option, and is less so today than ever.
Companies can generally be divided into three capabilities; customer relationship and servicing, distribution and manufacturing, and development. The culture in these functions is frequently very diverse. Companies continue to move towards the networked model, with more business partners, who have their own distinct cultures. Through this activity the complexity of the organization grows and one might ask, how will innovation thrive?
For innovation to be given its greatest chance of surfacing we need to encourage x-silo teamwork and also gain insights from outside our organizations. In the near future, if not already, this could include working more closely on innovation projects with increasing numbers of networked partners. One of the benefits of the networked company model is that, if you’ve selected your partners well, you will be engaging with the most able organizations in every function of your company’s operations; so why wouldn’t you want their input?
However, most partnering relationships revolve around contractual supply arrangements containing demanding ‘Service Level Agreements’. As the prime concern at the outset of the relationship was most likely operational performance the focus of the agreement will revolve around those issues. Did you build into your partnering relationship a motivation for them to share with you every possible innovation they might come up with, however much it might require their hard won contract to be changed ? How many of their good ideas are you missing out on ? Are they sharing bright ideas with other, more open, partners they may be working with instead of you ?
A revolution took place some years ago in enlightened parts of the construction industry, a long term ‘networked industry’, when they created new forms of contractual relationships. These new arrangements encouraged those who were actually going to undertake the building work to challenge the way the contract stated work should be done and to share their experience and creativity on how it might be done better. There were two measurable outcomes; firstly the work was completed better and secondly the myriad number of sub-contractors felt involved in the project and more committed to its successful outcome. Something maybe newly networked organizations could benefit from.
After all, the people who do the work on a day-to-day basis have far more experience in their area of speciality than those procuring their services. In the same way, are you engaging with your increasing number of business partners to encourage them to share ‘better’ ways of achieving the goals they are helping you achieve.?
So as you outsource, partner and create more alliances maybe you need to put equal effort into creating a culture of shared destinies and openness as well as operational effectiveness.
Are you?
David Smith
Joint Chief executive
Global Futures and Foresight