Building Business Relationships.

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12 May 2016

Annual House of Lords ReceptionCollaborating for Better Business

Taken from 'economicPLANT' magazine, 1-2016

In 2010 a world first ground breaking standard, providing a structured approach to managing business relationships was published by the British Standards Institution (BSI). The aim of BS 11000 'Collaborative Business Relationships' was to provide an objective, auditable framework for a subjective issue in which behaviour is the key element. The success of BS 11000 has led to the current progress towards a full international standard, ISO 11000. The period for public consultation ended in March this year and it is anticipated that the standard will be launched by the end of this year or early 2017.

The world is changing at a faster rate than perhaps ever could have been envisaged. The networked economy is re-writing traditional business thinking of ownership and creating alternate business models based on interdependent and complementary alliances, but in this turmoil one factor remains constant - good business relationships are a core ingredient for success.

The current economic pressures are coupled with a greater need for innovation in the supply chain together with the emergence of alternative business models. With these economic challenges ahead there is a need to harness greater collaboration across both the public and private sectors.

The subject of relationship management and collaborative working has been with us for many years under various guises such as partnering, alliances, consortia and others. Yet today it is perhaps more pertinent than ever before to look at how these approaches can be more effectively integrated to create value and build sustainable relationships.

As the world's first national standard for collaborative business relationship management, BS 11000 provides the opportunity to consider the key influences and to consistently manage the processes and impacts of collaboration in meeting the challenges of the next decade and beyond.

It was developed through pan-industry consultation to provide a structured approach to building more sustainable relationships throughout the value chain. The aim of the standard is to provide a framework to ensure collaborative relationships are effective and optimised.

Collaborative approaches have been shown to deliver a wide range of benefits, which enhance competitiveness and performance - for example, better cost management, improved time, resource utilisation, risk management, delivering incremental business value and innovation. Working with BS 11000 has helped enable organisations to effectively share knowledge, skills and resources to meet mutually defined objectives and to provide new levels of value creation. Interestingly, the first company in mainland Europe to adopt the standard was General Dynamics European Land Systems in Germany.

BS 11000 maps the key areas that all organisations should address. It is recognised that the degree of application will by necessity vary within the overall framework. Every relationship is different whether vertical or horizontal; however the key issues will be common to most. It is these key factors that BS 11000 captures and thus provides a common and consistent foundation for collaboration.

The standard follows a three-phase approach covering eight stages.

Strategic. The first phase has three stages, Awareness, Knowledge and Internal Assessment, and provides the foundation to link collaborative approaches with the overall business operation, whilst also focusing on the organisation's capability to collaborate.

Engagement. With the strategic elements of collaboration addressed, the organisation will be ready for the second phase to engage with others. Partner Selection addresses evaluation of potential new partners or existing relationships, while Working Together sets out how the collaboration will function in practice, including Value Creation and innovation.

Management. The third phase is about management of the relationship and covers Staying Together, through delivering the agreed and expected services/benefits and Exit Strategy, which focuses on the effective disengagement of the relationship.

ISO 11000

Following on from the success of BS 11000 Collaborative Business Relationships, the British Standard has been used as the basis for the first international standard - ISO 11000. The period for public comment on the Draft International Standard ISO 11000 from 130 countries has recently closed with the expectation that it will be published by the end of this year or early 2017.

A key facet of ISO 11000 is a much greater emphasis on individual competences and behaviours and the identification of the right people to work in collaborative programmes. The standard will incorporate the ISO management system structure (which enables integration with other management system standards such as ISO 9 001) whilst still retaining the eight-stage model of BS 11000.

The Institute for Collaborative Working (ICW), formerly Partnership Sourcing Limited (PSL), was established in 1990 as a joint initiative between the DTI (Department of Trade and Industry, now BIS - Department for Business Innovation and Skills) and the CBI (Confederation of British Industry). It is totally self-financing operating as a not-forprofit organisation.

The institute's continuing role is to help organisations, large and small, in both the public and private sectors, to build and develop effective competitive business relationships based upon a collaborative approach. The institute provides practical guidance based on a wide portfolio of experience utilising knowledge from extensive relationships within the industrial, commercial, Government, and academic arenas.

ICW aims, which are well on the way to fulfilment are:

  • To be recognised and acknowledged as the thought leader on business collaborative working
  • To carry out research to further develop collaborative working principles, practices and processes
  • To ensure the widespread development of collaborative working skills through training and development
  • To progressively build a global collaborative working knowledge sharing community.

Governance and Structure

ICW's strength lies in the experience and cross sector knowledge of its various categories of membership:

  • A high level main board oversees the management of the institute.
  • 12 leading foundation member companies provide strategic direction to stimulate thought leadership.
  • Senior representatives from the current more than 70 executive network companies from across industry, commerce, and academia provide experience and knowledge in the identification and deployment of good practice.
  • ECI's experienced associates and affiliates support engagement with the business community.
  • Individual ICW membership through qualification provides a recognised and transferable validation of collaborative skills.
  • An online network community enables the institute to effectively promote and spread knowledge.

Benefits of Collaborative Working

ICW recently commissioned Warwick Business School to undertake research into the benefits of collaborative working. What emerged was a broad perspective where:

  • The more open and committed approach fosters greater confidence on all sides.
  • This results in more productive engagements, allowing a flow through supply chains to end users.
  • The increased visibility leads to greater reliability and more constructive problem solving.
  • Which in turn reduces perceived levels of risk.
  • Inclusive relationships result in more business, enhanced scope, more innovation and greater certainty of outcomes on all sides of the relationship.

The research indicates that drivers and trends are focused on building confidence in outcomes as opposed to the historical approach focused on cost reduction. Perhaps surprisingly, the survey discovered that cost reduction featured lowest in terms of collaborative working drivers. The challenge for organisations is in building commitment and sustainable relationships which ensure they do what they promise. Organisations managing complex and extended supply chains rate managing risk as a key factor and highlight business relationship risk as an additional major consideration.

The Future

Growing interdependency as a result of more complex, high risk business together with increasing global trade is focusing industry and government on the need to invest in developing more integrated business relationships. The most significant future challenge is to change traditional organisational cultures to accept more readily collaborative business models. This highlights the need to identify and further develop competencies and skills to harness collaborative working. There is a clear recognition that the adoption of a more systematic approach, such as BS 11000 and its soon to be introduced development as an international standard, ISO 11000, integrated with supportive collaborative processes and systems will underpin the business environment where collaborative working can be seen as a competitive advantage.

Clive Winkler

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