| Analyzes the organization and own area to identify | | | | can help to achieve them? |
| key relationships that should be initiated or improved to | | | | - Share information on problems, profits, costs, and |
| further the attainment of own area’s goals. | | | | similar factors? |
| | | | | - Consult my organization/area about the timing and |
| Competition today means getting to the finish line first | | | | nature of products or services they want? |
| with better products and services. What is good | | | | - Share expertise and knowledge with members of |
| enough today most likely won’t be good enough | | | | my organization/area? |
| tomorrow. Even if you’re meeting your objectives, | | | | - Regularly contribute innovative product/service |
| don’t get complacent. | | | | ideas? |
| You could probably find small ways to improve your | | | | - Share concerns about our products/services |
| team’s operating procedures, but chances are your | | | | immediately? |
| work area isn’t responsible for the total process. | | | | Do my external suppliers: |
| Whether you are producing a product, rendering a | | | | - Consult my organization/area when developing |
| service, completing a project, or implementing an | | | | strategies and plans for functions such as production |
| improvement idea, people outside your work area are | | | | and billing? |
| going to be involved in what’s going on. | | | | - Emphasize factors in their measurement and reward |
| Partnerships force you to consider how your work | | | | systems that are consistent with what my organization |
| area and organization fit into the larger business | | | | area wants (quality, low price)? |
| process. They broaden your outlook and help you see | | | | - Share information on problems, profits, costs, and |
| how to make a major leap forward. | | | | similar factors? |
| An organization is like a link in a value chain that | | | | - Deliver products and services in a way that meets |
| connects the seller of raw materials or ideas to the | | | | my terms rather than pushing for their own schedule, |
| end-user of finished products and services. An | | | | pricing, etc.? |
| organization receives products or services from | | | | - Share expertise and knowledge with members of |
| suppliers, adds its unique value, and then provides | | | | my organization/area? |
| enhanced products or services to its customers. The | | | | - Regularly contribute innovative product/service |
| customers add their unique value and supply even | | | | ideas? |
| more enhanced products and services to customers | | | | - Address my needs and complaints quickly? |
| one step closer to the end-user. | | | | Do my internal customers and suppliers: |
| Consider a simple example. Suppose your organization, | | | | - Integrate their processes with my area’s? |
| Sandy’s Sausage, processes sausage and other | | | | - Shift resources to my area quickly and willingly when |
| cured meats for grocery stores and pizzerias. One | | | | I need them? |
| value chain might begin with the farm that grows grain | | | | - Readily form cross-functional teams to explore new |
| (George’s Grains), which is sold to the livestock | | | | ideas or enhance organizational integration? |
| ranch that raises pigs (Paul’s Pigs). The pigs are | | | | - Coordinate their actions with my area’s? |
| sold to a meat-packing plant (Mo’s Meats), which | | | | - Treat people in my area as friends and collaborators, |
| sells the pork to your organization for processing into | | | | not enemies and competitors? |
| sausage. You sell sausage to a chain of pizzerias | | | | - Share resources, information, and ideas rather than |
| (Pat’s Pizza), which prepares the final product for | | | | protect their turf? |
| consumption by end-users, the pizza eaters. There are | | | | - Consult me in the early stages when their decisions |
| many other customers and suppliers in the chain: | | | | and actions affect my area? |
| tractors to run the grain farm, trucking from suppliers to | | | | If you answered “no” to any of the above |
| customers, spices for the sausage, other ingredients | | | | questions, you have an opportunity to improve. A |
| for the pizza, and so forth. Every link in the chain adds | | | | partnership will help you take advantage of that |
| value and offers opportunities to improve efficiency | | | | opportunity. |
| through partnerships. | | | | 2. Challenge boundaries. |
| Within an organization, work units are arranged in | | | | Rigid boundaries around organizations and work areas |
| similar customer-supplier chains, with one unit serving | | | | can blind managers to the possibility of integrating their |
| as an internal customer to another. For example, the | | | | work processes with those of internal or external |
| accounting department of Sandy’s Sausage might | | | | customers and suppliers. An important step in building |
| supply financial data to its customer, the human | | | | partnerships is to challenge those boundaries. |
| resources department, which uses the data to provide | | | | But, challenging boundaries does not mean destroying |
| staffing services to its customer, the meat processing | | | | them. Not even the strongest proponents of |
| department. | | | | “boundary less organizations” seriously suggest |
| Chains of customers and suppliers compete with one | | | | tearing down all boundaries. Rather, managers should |
| another to provide greater value to the end-user. This | | | | try to make the boundaries more flexible and allow |
| value is measured by such factors as lower cost, | | | | greater movement between them. |
| higher quality, or faster time to market. If Sandy’s | | | | Boundaries are an intrinsic part of organizational life |
| Sausage and Pat’s Pizza partner to create a more | | | | and serve useful purposes. Your organization does |
| tasty and cheaper sausage pizza, they can gain a | | | | different work than your customers and suppliers. |
| larger share of the pizza eaters market, which will | | | | Your area performs distinct functions for your |
| benefit both organizations. | | | | organization that no other area performs. Boundaries |
| The majority of business partnerships fall into three | | | | keep tasks differentiated and roles clear. |
| major categories: | | | | However, rigid and unyielding boundaries create |
| - External Customer Partnerships | | | | problems. Inside an organization, functional units—like |
| Oftentimes, traditional organizations treat customers as | | | | marketing, human resources, sales, and research and |
| distinct and separate entities that they must convince | | | | development—are often called silos or chimneys |
| to make a purchase. Organizations that form | | | | because they appear as hierarchical stacks on |
| partnerships with their customers take a different | | | | traditional organization charts. Each silo has its own |
| approach. By collaborating with their customers, these | | | | agenda, resources, and leadership structure––a |
| organizations remove the guesswork about what | | | | condition that fosters an “us” versus |
| customers want. Because they help their customers | | | | “them” attitude. Such feelings discourage |
| become more productive, they increase sales, build | | | | integration across the organization and impede goal |
| more durable relationships with customers, and lock out | | | | achievement. |
| competitor suppliers. | | | | It is especially difficult to think of lowering the |
| - Supplier Partnerships | | | | boundaries of your own organization to make way for |
| Organizations need suppliers for materials, parts, | | | | external partnerships. After all, the organization is legally |
| services, or information. Because these purchases add | | | | defined as a separate entity. But if you rethink the |
| significantly to overall costs, it is to the | | | | ways your organization works with a potential external |
| organization’s advantage to obtain the highest | | | | partner, you can open up pathways of productivity |
| value at the lowest price. Without partnering, | | | | that are now blocked by the boundaries between you. |
| organizations have to negotiate a better deal. To do | | | | Challenging boundaries means changing your mind so |
| this, some organizations use pressure tactics, haggle, | | | | that you can change your behavior. To shift mental |
| or play one supplier against another. With partnering, | | | | gears, identify the purpose of the value chain and how |
| organizations have suppliers who understand and | | | | the goals of your organization fit into that chain. Then |
| respond to their needs. Organizations that help shape | | | | think about how much easier it will be to meet the |
| the nature of what their suppliers provide are inherently | | | | organization’s goals if you work with, not against, |
| more satisfied with what they get. | | | | other members of the chain. |
| - Internal Partnerships | | | | 3. Identify potential partners. |
| In traditional organizations different areas or units have | | | | Your work area might deal with a large number of |
| their own agendas that often compete or conflict with | | | | internal and external groups. Some of these groups will |
| those of other units. For example, the marketing | | | | be good candidates for partnerships. Spend time |
| department might want to develop many products to | | | | analyzing your current relationships and select those |
| meet customer needs, but manufacturing might prefer | | | | with the greatest potential for immediate payoffs. |
| few variations to enable long production runs. | | | | Begin by making a list of your most important internal |
| Meanwhile, engineering might want to tinker with new | | | | and external customers and suppliers. Identify what |
| technologies to stay up-to-date. Each group tries to | | | | you need from them and what they need from you. |
| maximize its own goals without considering the overall | | | | Next, think about your relationship with these groups. |
| organizational goals. When work units form internal | | | | Are you more open with some groups than with |
| partnerships, they establish relationships that move | | | | others? Finally, when a group seems compatible, |
| everyone toward common objectives. As partners, | | | | identify how building a business partnership could better |
| they share ideas, resources, information, and | | | | meet everyone’s needs. |
| know-how. | | | | Don’t just explore current relationships; extend your |
| To determine which partnerships you should initiate or | | | | search for external partners. Ask experts, make visits, |
| improve, take the following steps. | | | | attend trade shows and conferences, and explore the |
| 1. Identify improvement opportunities. | | | | literature about potential partners. Find organizations |
| Organizational units don’t exist in a vacuum, and | | | | whose strengths will complement your own and look |
| you undoubtedly already have many potential partners. | | | | for trustworthy companies whose values are similar to |
| Your first challenge is to examine how these | | | | yours. |
| relationships function and then determine if building | | | | Identifying potential partners is only one stepping stone |
| strong partnerships with these groups will be mutually | | | | in a longer path. Don’t commit to a partnership |
| advantageous. Ask yourself: | | | | before exploring all of its positive and negative |
| Do my external customers: | | | | possibilities. |
| - Share their strategies and how my organization/area | | | | |