The benefits of partnering – who gains most?
Over a career that spans many years, fads and trends, I have been involved in many ‘partnering’ arrangements; some good, some bad, some indifferent.
In too many cases discussions under the ‘partnership’ banner have been a cynical exercise in procurement that seek to offer key benefits (usually forecast top line growth) in return for upfront terms improvements.
Fast forward 12 months and the ‘projected growth’ has failed to materialise – you can guess the rest!
So, when anyone suggests a partnering approach I can start to get twitchy.
That said, I have been involved in some agreements that have worked superbly well and been of mutual benefit to the parties, and have been sustainable over an extended period precisely because they benefit all of the participants.
It has been my experience that the difference between the bad experiences and the good ones has been the mindset at the outset. If everybody involved in such an agreement genuinely wants an arrangement to be win -win (even though inevitably you want to ‘win’ a little bit more), based upon open and frank discussions which can be extremely tough at negotiation stage, then a successful, long term arrangement can ensue.
It helps when the participants involved hold common values and a similar vision of what the arrangement can deliver. These initial conversations should focus upon what is acceptable and not acceptable to both parties, sketching out the parameters before getting into the detailed stuff.
If agreement can be reached on the ‘directional’ areas, then there is usually a way to agree the ‘functional’ issues that form the fine print. But if that overarching shared view is not in place, which in turn can help to foster trust from both Companies – and at a senior level - then it usually means the discussions are fruitless – or worse, lead to a poor solution which almost always leads to a souring of relations as one party benefits whilst the other loses out.
In previous columns, I have spoken of the challenges we face as an industry and sector; lack of training, the ongoing skills shortage, our ability to attract new entrants into Construction and the drive of Government to address the housing shortfall that the UK faces.
All of these concerns (and more) must surely be driving many contractors to think differently about how they work, and with whom they work. In the years since the depth of the Great Recession we have seen our trading relationship’s change in many subtle ways, and also in some less subtle ways.
As the pendulum, has changed from too little work and too many contractors at least to some degree in the opposite direction, then a contractors’ ability to secure better trading terms should have increased.
This always has to be based upon strong on site delivery, but if that is achieved then there is absolutely no reason that professional, committed Roofing Contractors should not be entitled to expect a reasonable return for a reliable offer.
Certainly, within the House Building sector as our clients continue to see their returns increase, the more far sighted amongst them recognise that a healthy, profitable supply chain is an integral part of their ability to maintain those increases.
Whilst it will always be true that the market dictates pricing levels and the importance of retaining competitiveness is essential, what price poor on site delivery and the hidden cost that delays can result in?
So as contractors are we committed and organised enough to offer some guarantees to our clients in terms of our levels of service, and are they prepared to accept a premium in return?
Can we manage our activity levels and resources in such a way that we can meet our client schedules, and can they organise themselves in such a way as to give us the necessary visibility to plan accordingly?
Based upon strong on site delivery, can we help our clients achieve their growth objectives and in turn allow us to grow, but in a planned and realistic manner in line with resource availability?
Based upon certainty and commitment on both sides, can we invest in the training and recruitment – at all levels- to build the sustainable industry that can meet the housing needs that we all desire?
Can we use our technical expertise to evaluate and recommend better ways to carry out the work on behalf of customers? After all we are the roofing experts!
At Avonside, we believe the answer is yes, in fact we know the answer is yes because we have been able to establish some key relationships with our client base that reflect those principles.
We have identified and agreed some operational parameters that form part of an ongoing review process to ensure that we maintain the high standards we have agreed, we have agreed what level of activity both parties want to commit to, and in return we have worked towards aligning the processes of both companies with the aim of removing hidden costs which ultimately allow both parties to deliver increased returns – precisely the ‘Win – Win’ scenario I referred to earlier.
This practice is not for everyone, and that’s absolutely fine. However, if we are to overcome the challenges we all face, and remain profitable then we need to embrace a different way of working to meet those challenges.
To answer the question at the top of this article, who gains most, from my perspective those who gain most are the organisations that are prepared to work closely with suppliers and clients alike, who are open to change, hard headed in agreeing parameters and have a commitment to make change work.
So, in this type of environment new more effective ways of working can be established, open reviews and honest, candid feedback can take place in a positive environment and the commercial benefits can flow to both parties.
In Partnering, as in life in general you get out what you put in!