One secret ingredient of high performers is their ability to turn transactional relationships into partnerships, writes Dave Hanna
Of all the talent management initiatives you pursue, how many are focused on harnessing the talents of those outside your organisation? One secret ingredient of high performers is their ability to turn transactional relationships into partnerships where both parties act as if “your business is my business”.
Honda’s organised partners
An example of this is how the Honda Motor Company has institutionalised partnership relationships. Honda goes beyond contractual agreements with its suppliers through its best practices program, in which Honda employees are exclusively dedicated to helping suppliers with problems in quality, engineering or operations. For instance, when one supplier was overwhelmed by a dramatic growth in its business, Honda sent a small team to work with the supplier full time for nine months to help them master their situation.
Procter & Gamble and Walmart: unlikely partners
Some years ago Walmart chairman Sam Walton and Procter & Gamble CEO John Smale agreed to break the tradition of rivalry between their two companies for mutual gain. To initiate this effort, a team of P&G managers from key functions moved to Walmart’s home in Arkansas. They formed a task force with their Walmart counterparts to study how they each did business and to develop one totally aligned system. The team made many changes that, though not ideal for either company’s existing systems, did a better job of fulfilling consumers’ needs. In the end, the business system they shaped delivered a box of Pampers or a tube of Crest toothpaste from the production plant to the store shelf with the highest quality and lowest cost in the fastest time ever. Not surprisingly, the sales volumes and profits of both partners improved dramatically.
Saturn Corporation’s partners
Saturn Corporation president Skip LeFauve told anyone who would listen to him, “Everyone you work with is a partner. You can achieve so much more if you treat them like one.” As an example of this, LeFauve organised regular meetings with the retailer network to find ways to help each other. In one network meeting Saturn retailers wanted to know how soon the plant would be going to a third production shift. “We never have enough cars,” the retailers lamented.
LeFauve replied that General Motors would not start a third shift until Saturn was in the black financially: “We are right on track with our commitment to GM, but it will take us another year to get there.” A retailer asked, “How much money do you need to get into the black?” LeFauve replied: “About $13 million.” After doing some quick calculating of annual sales, the retailer stated, “That’s about $140 per car. If we rebate back to you that amount, can we get our third shift?” LeFauve readily agreed, and GM agreed as well. The third shift was organised, sales volume accelerated, and the retailer rebate moved Saturn into the black one year ahead of projections. And … the following year Saturn dealers delivered the third-largest selling car model in the USA.
Cultural pillars of partnerships
Cultures are shaped by beliefs, behaviours and organisational systems. Here are some pillars upon which to build a culture of partnerships:
- Being a partner: You are genuine in your commitment to each other’s wellbeing. Example: Upon learning that all P&G managers were spending their first day on the job fighting the local bank’s red tape to get their mortgages approved, Sam Walton called the bank and asked if it could expedite things for his business partners. The loans were approved immediately.
- Making each other’s business your business: A common business purpose united former rivals at Procter & Gamble and Walmart.
- Aligning daily priorities: Specific groups and individuals (like members of Honda’s best practices unit) must be charged to accomplish the important tasks in the partnership.
- Making partnership commitments: Specific commitments are agreed and documented about desired results, expectations, resources and monitoring processes so all partners are on the same page.
- Mobilising to help each other in tough times: Like the retailers who found an unconventional way to support the manufacturer in order to accelerate the entire Saturn team’s financial growth.