How do companies successfully set up partnerships?

What makes partnerships work? During ‘Collaboration: Discovering the Potential’, a Data2Move community event, prof. dr. Ard-Pieter de Man (Vrije Universiteit Amsterdam) shared valuable insights from extensive research. A certain attitude is important: “You don’t want to be in control, you want to be up to speed. To do that, you need to work together.”

Both researcher and consultant, professor De Man is an expert on partnerships between organizations. He is highly interested in organizations’ capability to change – and how partnerships can help make that happen.

Partnerships are on the rise, said prof. De Man while discussing current trends. Companies in the IT and pharmaceutical industries are taking the lead. “And not only that: they also make an effort to find out how to manage these collaborations. At the beginning of our studies, the companies we tracked used 11 tools to manage their collaborations – evaluations, legal aspects, etcetera. By the end, ten years later, they had 30 tools.”

One of the other trends: there are more and more multi-company partnerships. “Six, seven, sometimes even ten companies work together.”

3 core elements of success

Many partnerships fail, prof. De Man said, because of a mismatch between strategies or cultures, or because of a lack of trust. But then what makes partnerships successful? He shared three core elements of success:

  • Structure
  • Relationship
  • Collaborative capability

You can properly take care of these by answering certain questions. For instance, in the case of structure: Who talks to whom? Which goals do we discuss? How are we going to share costs and revenue? Or in terms of relationship: How do we build trust? Is everyone committed? And collaborative capability: Are we willing to share knowledge? Do we have the right tools? Are we able to collaborate?

Everyone benefits: norms for collaboration

De Man emphasizes the importance of the relational aspect. Introducing his list of norms for successful collaborative behavior, deduced from research, he starts with empathy. Can you understand how the collaboration affects your partner(s)?

This is related to mutuality. “Your company benefits, and so does your partner,” De Man explained. “This is still a problem for many companies.”

In comes flexibility. Markets, needs, goals: circumstances may change. “Are you willing to evolve with them? Or do you want to stick to the contract?”

Other norms include commitment, a willingness to solve conflicts, and a strategic outlook: “If you can actually look ahead by two or three years, all partners involved can reap tremendous benefits – but all too often the focus is on the short term.”

To show how these success factors and norms translate to daily behavior, De Man shared the Abbott-Reata Behavioral Principles, including…

  • try a talk before you e-mail
  • celebrate achievements together
  • make it a habit to share information

Increasingly interdependent

Discussing examples from Air France and KLM (initially offering their customers more destinations; eventually learning from each other) and John Deere and Kespry (drones gathering topographic data; tractor drivers benefiting from data while planting), professor De Man showed how companies are becoming increasingly interdependent. And partnerships like these are just the beginning. All together, they help shape big ecosystems, where the fate of individual companies becomes intertwined.

“We still think of competition as something between companies, but it’s becoming something between ecosystems,” said De Man. “In a data-driven economy, your success depends on your partner ecosystem. An ecosystem with the different parts supporting and strengthening each other.”

Getting up to speed

De Man makes it clear: managing diverse partnerships is becoming a competitive advantage – and the human element becomes even more important than it already was. This was an idea that resonated throughout our event. Asking our community members which take-away they found especially noteworthy, many of them responded along these lines:

  • “It’s not about technology, it’s about empowering people.”
  • “Collaborations start with relationships.”
  • “It’s the people who collaborate, not the companies.”

For companies who are hesitant to start forming partnerships, professor De Man provides a solid reminder: “With today’s rapid developments, you don’t want to be in control – you want to be up to speed. To do that, you need to work together.”

Become a part of the Data2Move community and join us for our next event in February.

More on professor De Man’s work can be found on his Vrije Universiteit Amsterdam profile.

Professor Arjan van Weele on Supply Network Collaboration: companies unaware of how dependent they are

On October 30th, the Data2Move community will meet again to explore Supply Network Collaboration. In this two-part article, Arjan van Weele, professor of Purchasing and Supply Chain Management, shines some light on this thought-provoking topic: “Companies can no longer ignore the fact that good collaboration is vital.”

Many of us are not aware of this, but we are all completely dependent on others. For our survival, for peace, for prosperity. Especially now that the world is becoming more and more interconnected. We have to learn how to collaborate in networks,” says Professor Van Weele.

Companies often don’t realize how dependent they are. Until there’s a flood in Thailand, leaving three factories under water that produce semiconductors, required by companies here to make Printed Circuit Boards – who then send people home, because the process grinds to a halt.”

Competition is becoming a myth

Based on our research, we can now see that competition is becoming a myth,” he states. “One supermarket competing with another… That’s not really what’s going on. It’s these companies’ supply chains that are competing. Look at the automotive world: it’s the suppliers of Volkswagen that define the quality of their cars.”

By now, we have realized that companies are so dependent on their supply chain partners, for the quality of their products and services, as well as their reputation, that they can’t ignore the fact that good collaboration is vital. It is ASML’s network that enables the company to realize the innovations they need in order to survive. They have to innovate every 18 months. Moore’s Law. You can’t make that happen with a loosely coupled system. Supply Network Collaboration is about companies, their suppliers, their customers and knowledge partners, all joining forces in a network.”

Different approaches to Supply Network Collaboration

The interesting thing is that you can approach it from different angles. From the innovation side, or from the operations side. From the logistics side, of course: how do we optimize the flow of goods? From the procurement side – how do the various parties deal with each other in terms of contracts? Or what about the IT side: how do we exchange data, how do we make sure all partners are connected?”

And, last but certainly not least, there is the human side of enterprise: how can we get people from different companies in different sectors, all with different company cultures, to work together without any obstacles?”

It’s far from easy,” says Professor Van Weele, and he smiles: “Well, that’s the theme of the day!”

Next week: part 2, on companies who are doing this well, and the first steps you can take on the way to Supply Network Collaboration. Data2Move members: be sure join us on October 30th!