Collaboration is a buzzword used across organizations but very few have mastered the art of institutionalizing collaborative behavior. Collaboration, in simple words, is creating something as a group that would not be possible working individually.
One of the premise of the integrated supply chain management concept was to foster collaboration within the business as well as with the external partners. The extent to which this objective has been achieved, varies from company to company. Merely creating an integrated supply chain function does not guarantee collaborative approach. That is why, in many cases, SCM function has itself become a silo within the organization. Not just that, it continues to nurture silos within itself in the form of logistics, demand planning, FG inventory management, supply management and so on.
In one such example, a supply planner, who was involved in planning huge quantities of promotion product, did not communicate the plan to the downstream supply chain. Thus, the warehouses were taken by surprise and did not have enough resources and space to handle the product. The end outcome was a delay in the launch of promotion and dilution of its effectiveness.
Sales and Operations Planning Process is another initiative intended to encourage collaborative behavior but that too has met with limited success. The root cause of the problem lies beyond the realms of organization structure, processes, IT tools etc.
How does a leader get to know that collaboration is not working at the workplace? Here are few indicators:
- People would ask for more resources & buffers e.g. inventory, people, budgets etc.
- People would come back with problems or the reasons why certain goals could not be met
- The amount of effort being put in by people is not commensurate with the outcomes
- In the group meetings, people would not voice concerns or speak in muted voice
- There is either too much tension or too much bonhomie between people
Key Ingredients of Collaborative Culture
People need a purpose for collaboration. It has been found that people, in general, tend to collaborate more in the situations of crisis e.g. war, natural calamities or crisis within a company. The crisis creates a strong and common purpose for people to give up their individual gains for a collective cause.
One of the ways to create a strong purpose is to develop shared vision and goals for the organization. This shared vision should override all other goals and objectives either at individual or functional level. To know if your team members have a shared vision, you can do a small exercise. In one of the group meetings, ask each team member to write down the shared vision and you would be surprised to see variety of responses. Every individual in the organization should have clear line of sight to these few shared and Wildly Important Goals. The shared ownership reduces the functional or territorial attitude.
One of the reasons why people do not share knowledge, expertise or experience is lack of trust on each other. The fear of misuse of the shared information or credit taken for personal benefit destroys the trust. In one case, the production manager of a company informed supply planner about machine breakdown resulting in production shortfall. Instead of collaborating with the production to re-prioritize and reschedule production, he used the information to blame the production manager. One such instance is good enough to destroy the trust and create barriers for collaboration.
Trust requires building relationships and networks. Getting to know people, beyond their roles and positions, goes a long way in building trust. When the relationship becomes informal and personal, the chances of collaboration enhance. Company focused on collaboration enable these relationships by providing common and informal places for relaxation, breakouts, coffee corners etc. People get to know what other people do, understand each other’s pain points, develop empathy – something that you wouldn’t get to know through official job descriptions. The informal relationships create trusts which in turn makes collaboration smoother.
Shift focus from Boxes to Linkages
Traditionally, the powers were vested in the boxes that represent positions in an organization structure. As the companies become more complex and networked, the power shifts from the boxes to linkages or interplay between the boxes. What it means that no single position in the structure can deliver the desired results. The performance is a function of the effectiveness of interplay.
For example, the product obsolescence is an outcome of the interplay between Sales, Demand Planner, Supply Planner and Production decisions. Therefore, all of them should share the accountability and KPI of obsolescence.
Decision making may require moving along the linkages iteratively. The focus should not be on who makes what decisions but on how decisions are made i.e. whether all the links impacting the decisions have been evaluated. The moment focus shifts to the links, people have no option but to collaborate.
People who are not empowered do not tend to collaborate as they do not have the authority to share information and take actions. Leaders must delegate authority and provide enough space to their team members to go beyond their assigned duties and collaborate to solve common problems. They must be allowed and encouraged to choose their battles, be part of cross-functional teams, seek help or provide help to others and take initiatives. While allocating responsibilities, 20% to 30% of time should be provided for working on cross-functional initiatives. It would not only strengthen the bonding but also contribute towards people development.
Community of Practice
In early 2000, P&G was facing tough challenges in terms of productivity and innovation success rate. The new CEO of the company AG Lafley used collaboration – internal as well as external, as a lever to fight both the challenges. He established 20 cross-functional “communities of practice” within P&G. These collaboration initiatives paid off handsomely. By 2008, P&G had improved its R&D productivity by nearly 60 percent, more than doubled its innovation success rate, and lowered its cost of innovation.
Community of Practice is an informal group that meet at a certain periodicity to share knowledge, experience and help each other solve pressing problems. To know more about how various companies are benefitting from COPs, read here.
Remove the Buffers / Comfort zones
Excessive buffers, resources and comfort zones lead to poor collaborative behavior and vice versa. The moment buffers and comforts are taken away, people have no options but to share resources, information and expertise. For example, if the supply chain and sales function do not collaborate, it would lead to higher inventory, obsolescence and lower customer service levels. The buffers and excessive flab must be challenged every time to make people reach out to their counterparts for the support. Creating an environment of sharing resources and information to achieve personal or functional objectives helps in fostering reciprocity and collaboration.
Rhythm of formal reviews
Establishing a rhythm of structured cross-functional reviews to plan and execute, fosters collaboration in the organization. For example, an Indian Cement company follows “war room” process to review the sales orders, production, stocks and make certain key decisions on daily basis. These reviews are attended by Sales, Logistics, Plant managers across the organization. A beverages company has a formal Sales and Operations Execution (S&Oe) meeting on a weekly basis that is attended by top management of the company during peak season.
S&OP (or Integrated Business Planning) is another avenue to facilitate collaboration between all the functions of an organization. However, in many companies it has failed to engage the stakeholders and been diluted to merely a supply chain driven process. The problem lies in the way the process has been positioned, implemented and sold to the stakeholders. In order to get past the dead end in S&OP, read here
In these reviews, people arrive at the common action plan, hold each other accountable for the actions assigned and follow through the plan.
Constructive Challenging and Consensus
It may sound an oxymoron to use Challenge and Consensus together but are essentially two sides of the same coin. Constructive challenging is important for capturing diverse views and deliberation. However, at the end, the group needs to arrive at a consensus after weighing pros and cons of each choice.
The Sales and Operation Planning process requires both constructive challenging and consensus. However, at times people tend to focus too much on arriving at the consensus because either they lack ammunition to challenge or they are not completely engaged. This could send a false signal that people are collaborating. For example, demand planning review meeting requires challenging the assumptions used for putting together the demand plan. The product manager and demand planner, who are part of the forum, must evaluate and challenge the assumptions before arriving at the consensus plan. It could also mean encouraging uncomfortable discussions to thrash out every possible aspect of decision making.
Collaborative behavior is a habit that needs to cultivated over a period through both formal and informal means. The leaders need to demonstrate the behavior and be role models. However, it has been found that the biggest gap in the collaborative behavior prevails at the senior level in the companies. They, unknowingly, could send conflicting messages to their team members e.g.
“why are you messing up with someone else’s work?”
“focus on your job, you are not paid for social service”
“don’t get into it else you would be held equally accountable”
In the current world of complexity and uncertainty, Collaboration is not an option but a necessity to win in the market place. If you are keen to know, how we could help you to bring about this change in your organization, please click her or write to firstname.lastname@example.org.