How many of your trading relationships could be far more profitable, and lead to much better growth, if only they would behave differently?
Sometimes there are fundamental reasons why a specific trading relationship can never be truly collaborative. Maybe your growth agendas, values or business models are simply not compatible. But even where all three elements align, many trading relationships that could provide exceptional growth through collaboration simply don’t. They remain highly competitive, with each party focusing on taking a greater share of the pie, rather than working together to grow the pie. Why? There are four possible reasons:
1. Power: It’s impossible to sustain a collaborative relationship when one party clearly has the balance of power. The powerful party will always, ultimately take advantage, to the detriment of the collaborative, weaker party. However, power is all about perception. Create the perception of power and you’ve a chance to create a genuinely collaborative environment.
2. Precedent: Precedent is what’s gone before. Precedents can’t be changed, but new ones can be set. To build collaboration you have to talk with them about the negative events in the past and contextualise them – jointly understand the risks of them happening again, and deliberately start setting new, different precedents to define a new phase in the relationship.
3. Personalities: A strategy that relies on a highly competitive personality working in open and trusting collaboration is always a high risk. Do what you can to inform and educate. Move people on your team if necessary. But sometimes on this one, you just have to step away and wait for a change.
4. Relevance: You will never get someone to invest the time and energy in genuinely collaborating with you if you’re not strategically relevant to their future. Your strategy must be first to become relevant, then to become collaborators.
BOTTOM LINE: Each one of these factors can be directly influenced and changed over time. If you believe your businesses should be compatible, and there is value to be had by genuinely collaborating, focus on which of these four factors is holding you back.