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How to Get and Keep Control of Your Business Relationships
Building Business Partnerships
|The requirements are
familiar to everyone involved in running a business in todays information-dependent
world. Indeed, your companys success depends on your ability to:
This article presents the true story of how two companies changed the way they work together to meet these requirements. It provides a model for a true partnership that works for all participants.
Steve is responsible for the enterprise-wide computer and network systems of a global electronics company. The various geographic divisions had operated quite independently, but todays competitive environment requires the company to become truly global with consistent ways of doing business worldwide.
Steve was impressed with the methods that his primary networking vendor had used to resolve some significant issues the year before, and recognized that those same methods could be expanded to form the basis of a global support relationship. The underlying principles were sound and proven, but figuring out how to apply them in a broader context and implementing the program on a worldwide basis was a major challenge for all concerned.
Steves goal was to be so good at providing network services that none of his customers would even think of going elsewhere.
The next step was to determine how the relationship would operate. The partners had to agree on two key aspects:
Rudiments of both the metrics and the process were in place, but much more was needed to achieve the goals of this partnership.
We initiated the partnership by holding a series of design meetings with the key participants from both companies. The purpose of these sessions was to decide how we wanted to work together, and build and test the tools and procedures to do it. Specifically, we agreed on:
Differing expectations could mean the partnership would fail, so the first step was to be sure we were explicit and in agreement about what we expected our CQP to be. A brief discussion confirmed the understanding that CQP must
Although participants from the two companies had to make the key decisions, a consultant was hired to design the program. The consultant framed the questions to be answered, organized and facilitated the design sessions, and synthesized the results into the tools and procedures that made this CQP a reality. The companies made the decisions, implemented or modified automated systems to collect and report the data, trained staff to follow the new procedures, etc. It took a series of four design meetings, with a lot of work between meetings, to get from the "good idea" to a working business process.
Everything we did would be driven by the metrics we chose. These measurements would demonstrate performance, progress, and where we needed to focus improvement efforts. Choosing the right metrics, and organizing them so we could use them effectively, was the most critical component of the whole CQP program. In this case, the relationship exists to keep the network available and to do so in a reasonably effective way, so we chose metrics to let us track network availability and service effectiveness.
We defined two categories of metrics, which we call "regular" and "issue-specific." Both categories include measures of network performance itself as well as service/support performance of both companies. Regular metrics are broad indicators that are reviewed according to a schedule. Issue-specific metrics are collected and reported to explain anything that isnt as it should be, and to track specific problems or projects.
We defined two classes of regular metrics: operational and trend. The operational metrics were set up as a report card, showing pass/fail for each metric. In the case of a fail, explanations are required as to the root cause of the failure and, of course, what is being done to prevent recurrence. To keep things manageable, the report card is limited to the ten most important metrics. If priorities change, we change which metrics are reported. Examples of metrics on the report card include:
It is important to note that achieving passing levels requires that both companies do their parts, individually and together. The metrics help the partners focus on what is important to their overall success, so report cards "fails" are increasingly rare. When it does occur, the reaction is mutual concern to understand why and identify what both companies can do to prevent recurrence.
We also defined overall trend metrics, with threshold levels, to provide an enterprise-wide view. The threshold level is the point that indicates chronic, significant disruptions. A metric exceeding threshold level indicates a crisis situation. By tracking the trends, we can see trouble coming and have the opportunity to intervene long before a crisis occurs. We can also use the trends to demonstrate the actual impact of improvement projects.
The particular metrics you choose depend on your priorities. In this case, we defined three basic types of trends to track regularly:
The following chart is an example of the trend chart for Corrective Maintenance Call Rate. You can see that in January '97, the rate climbed too close to threshold for comfort, which gave us the opportunity to investigate and take corrective action before we experienced a crisis. The results in March suggest that the corrective actions were effective, though that wasnt proven until the rate stayed low for longer.
Metrics alone are worthless without business processes and organizational structure to use them. How would we collect and review the metrics, take appropriate action based on them, plan and implement projects (both remedial and new stuff), etc.? The next step in developing CQP was to decide how we would work together, i.e., design our organization structure and business processes.
Because this partnership was so big in scope, we defined a multilevel team structure to deal with different levels of issues. The top level "CQP Team" is responsible for managing the partnership. This is the group that sponsored and designed CQP. In operational mode, this group reviews the trend level metrics, identifies strategic and broad scope tactical issues, and adjusts the CQP process itself as we move forward. The CQP Team normally meets three times per year, with special meetings called if needed. Representatives include the appropriate executives from both companies, i.e., Steve from the electronics company and the Vice-President of Customer Support from the vendor, along with the senior managers from both companies responsible for making the business relationship work in real life.
The CQP Team chartered several additional teams to review detailed metrics, resolve issues, and implement various specific projects. For example, one group reviews the report card issues, handles project issues, manages the action plans, etc. This is a monthly activity. A weekly review addresses detailed operational issues such as to assure complete resolution of critical cases and to bring nodes into the new architecture smoothly. Membership of these groups overlaps, but structuring the work into separate groups helps keep each meeting focused and efficient.
All teams maintain their own ongoing action lists with assigned tasks, owners and due dates appropriate to the issues the team is responsible for. These are published and available to everyone involved in CQP, not only to help the teams manage their own work, but also to keep communication open between the teams and help avoid conflicts or duplicate efforts.
With the design decisions made explicitly and documented, moving to an operational partnership was relatively easy. The process of creating CQP had established the basic attitudes and procedures for working together that would be carried on in the partnership. By the time we finished designing the partnership, everyone was accustomed to deciding together what to do, then personally taking responsibility for appropriate action items, agreeing to a due date and meeting the commitment (or explicitly renegotiating). The personal relationships were respectful, so individuals were able to tell the truth, e.g., admit problems and ask for help when they needed it.
The CQP design told us who, what, when and how. Everyone knew what they were responsible for and when it was due, whether collecting data and creating graphs or making sure meetings get scheduled on time and in an appropriate conference room. The CQP structure put the two companies in position to manage their environment with control of it and of the way they would work together. Fewer problems arose, and when they did, could be resolved efficiently and without rancor.
Companies today have multiple, increasingly complicated relationships with other companies. You can benefit by applying the principles of CQP to your partnerships:
The business relationships that your future depends on should not be left to chance.
Solving Problems PermanentlySM
The Sawyer Partnership. All rights reserved.
Jeanne Sawyer, Ph.D.