BE0964 Partnership and Collaborative Working

Module Summary

Why Collaborate?

A partnership is an arrangement in which parties agree to co-operate to

advance their mutual interests

Who Partners?

Partnerships can be established among…

Customers

Employees

Suppliers

Potential Competitors

Types of partnerships

!  Joint Ventures

!  Public Private Partnerships

!  Strategic Alliances

!  Collaborations

!  Strategic Partnerships

The Paradox of Competition and Co-operation

Types of and Motives for Strategic Alliances

FORMS OF ALLIANCES

Six Objectives of International Strategic Alliances Framework by Stephen Preece (1995)

Alliances are like Marriages…..

!   The partners have to;

•  understand each other's expectations

•  be sensitive to each other's changes of mood

•  not be too surprised if their partnership ends in divorce

!   Many companies have a sort of prenuptial contract

•  an agreement as to what is to happen to their joint property in the event of a subsequent divorce

•  Typical of a formal alliance / joint venture

Public Sector Alliances

For practical purposes, PuPs can be categorised according to the different types of partners, such as:

!   partnerships between two public authorities;

!   partnerships between public authorities and communities;

!   development partnerships;

!   international associations;

Why PuPs?

PuPs can be used to achieve the following objectives: !   • They can lead to improved services

!   • PuPS can be used to build capacity in public agencies and the skills of a workforce.

!   • They can be an effective way of restructuring the public sector and improving public services as a defence against privatisation.

!   • They can help to build stronger community support and accountability for services.

!   • They can be used to achieve other objectives, such as paving the way for privatisation, as occurs in the US.

International PuPs

Advantages of PuPs

!   Mutual understanding of public sector objectives and ethos

!   Transparency and accountability

!   Low transaction costs: administrative costs around 2% of projects

!   Can involve local civil society, workforce

!   Possibility of reinvesting 100% of available financial resources into the system

PUPs have a number of advantages over other partnerships based on commercial objectives. They can be summarised as follows:

Partners which have benefitted from a PUP can become supporting partners to other cities

Non-commercial relationship, low risk to municipality

local control over objectives, methods

Long-term gain in capacity-building

Public Private Partnerships !   "A government service or private business venture which is funded and operated

through a partnership of government and one or more private sector companies"

The relatively long duration of the relationship, involving cooperation between the public partner and the private partner on different aspects of a planned project

The method of funding the project, in part from the private sector, sometimes by means of complex arrangements between the various players

The important role of the economic operator, who participates at different stages in the project (design, completion, implementation, funding)

The distribution of risks between the public partner and the private partner, to whom the risks generally borne by the public sector are transferred.

(Commission of the European Communities, 2004)

Traditional Procurement vs PPP

!   Governments borrow money to pay for infrastructure

!   Private company raises the money for the investment, and then recoups it by operating the asset over a long period

Types of PPP The term PPP is a spectrum of possible relationships between public & private parties for the provision of infrastructure services

Defining Principles

!   Value for Money (VFM) - Qualitative as well as quantitative

!   Risk Allocation - Appropriate. Which party best placed

!   Performance Standards - Output focussed/Payment on delivery

!   Maintain Value of Public Assets - Whole Life

!   Off Balance Sheet

Profitability vs Responsibility

Shareholder Value Perspective

Value Management Principles

Stakeholder Value Perspective

Service delivery

PPP Benefits !   Value for money for the taxpayer through optimal risk

transfer and risk management

!   Efficiencies from integrating design and construction of public infrastructure with financing, operation and maintenance/upgrading

!   Creation of added value through synergies between public authorities and private sector companies

!   Innovation and diversity in the provision of public services

!   Competition and greater construction capacity

!   Effective utilisation of state assets to the benefit of all users of public services

PPP Disadvantages

!   much more complicated than conventional procurement contracts

!   very large tendering and contracting costs

!   Private and public sectors often have different goals, and organizational philosophies and cultures

!   the costs of contract re-negotiation are often high

!   the difficulties of ensuring good performance, especially with respect to “soft” performance dimensions,

!   difficult for the government not to intervene if the provider threatens to go bankrupt.

Third Sector Partnering

“the part of an economy or society comprising non-governmental and non-profit-making organisations or associations, including charities, voluntary and community groups, cooperatives, etc..”

Oxford English Dictionary (online) 2014

Whats in it for TSOs?

!   Capacity building

!   Access to core funding

!   Access to skills, insights and assists of a business

!   Opportunity to transform performance over time

!   Deeper understanding of business sector approaches

Whats in it for Business?

•  Improve quality of service

•  Better understanding of clients/customers

•  Brand differentiation •  Improved reputation •  Corporate Social

Responsibility (CSR) •  Increased trust in brand

Key differences between Private and TSOs

Negotiating the Relationship

•  Partnerships are about relationships

•  The purpose of partnership

is ‘to achieve together what we could not achieve alone’

•  Need to create trust, equity

and mutual accountability

•  less determined by the structure of the relationship than by the practice of certain behaviours

Partnering is about people

!   Multi-stakeholder/multi-sector partnerships are complex

!   Dependent upon the establishment of good working relationships between people from different organisations and cultures, often with different values, interests and expectations

Importance of Negotiation

!   Commercial negotiations can involve a complex range of financial, business and contractual issues

!   Planning, conducting and analysing the outcomes of commercial negotiations are key elements of negotiation

!   Developing the skills of commercial negotiation is a demanding, valuable and often personally challenging task

Six Laws of Influence

!   Prof Robert Cialdini - Professor Emeritus of Psychology and Marketing at Arizona State University.

!   Influence: The Psychology of Persuasion

Cohen-Bradford Influence Model

Relationship Management

“Paradigm of project performance and client satisfaction, achieved through an understanding of the way in which a range of relationships between people, between people and firms, and between firms as project actors

operate and can be managed” Pryke & Smyth (2006)

Social paradigm

Behavioural based Understanding the needs of business partners

Risks of poor relationship management

!   Common Risks

!   Delays in responses to questions

!   Slippage

!   Decline in morale

!   Minor conflict

!   Personality clashes

Severe Risks

!   Litigation

!   Loss of ‘good’ staff

!   Stress related issues

!   Explosive behaviour

!   Project failure

Types of Relationships

•  Business-to-Business

•  Organisation to individual

•  Individual to individual

Global and Cross-Cultural issues

!   Increase in partnership & collaborations internationally

!   Increase in number of projects with multicultural teams

!   Increase of projects with international stakeholders

!   International Joint Ventures are notoriously hard to manage

“The single greatest cause of difficulties in global business transactions is not a lack of technical expertise, hard work, or good intentions – it is a lack of ‘people skills’ for relating successfully with counterparts from other countries and cultures”

Ernest Gundling Working GlobeSmart: 12 People Skills for Doing Business AcrossBorders,

Relationally Integrated Project Teams

!  Selection of suitable teams is critical to success

!  Importance of “Relational Integration” as a partnering criterion

Benefits of Evaluation

!   Evaluation is often a neglected part of partnership working.

!   Evaluation is an important part of partnership and inter-agency working

!   – what is happening?

!   – what is going right, what is going wrong and why!

Why it is important to evaluate?

Formative

‘This is a type of ‘developmental’ evaluation that feeds information and guidance back into an intervention so that improvements can be made’.

Process

‘The aim of this type of evaluation is to find out exactly how an intervention works’.

Outcome

‘This type of evaluation focuses on the final results of the intervention. A typical question for an outcome evaluation to address would be whether the intervention has made significant improvements in a client’s life’

Life Cycle Model

One approach to establishing the role of evaluation for partnerships is to focus on the concept of a partnership ‘life cycle’.

5 vital stages approach

1. Forming:

2. Frustration

3. Functioning

4. Flying

5. Failing

1. Consensus Building, set vision & objectives

2. Problems, re-focus or go to step 5

3. Up & running

4. Real achievement

5. All partnerships have a shelf life

5 vital stages approach

Partnerships need to work through the stages of the life cycle in order to function with greatest effectiveness (or "fly".)

Even in the best partnerships, there is a tendency for partnerships to falter and perhaps fail

Unless the partners consciously manage their progress through the critical stages of the life cycle.

Generic Tools

Generic Tools

Balanced Scorecard (Kaplan & Norton) - 4 Processes

Smarter (Ideal) Partnerships Toolkit

Key Points

!  Partnering is an essential business strategy

!  Co-operation can lead to win-win situations

!  There are many types of partnerships all with differing attributes, pros and cons

Key Points

!  Careful negotiation is essential for success

!  Relationship management is essential for success

!  Project team culture, individual relationships, trust, ethics, equity are all essential

!  Evaluation is essential….

Finally…

Partnering is about PEOPLE not Organisations…