0 to 10 Relationship Management. Principles and Practices for High Performance B2B Relationships Facilitated by Gary Ryan

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1 0 to 10 Relationship Management Principles and Practices for High Performance B2B Relationships Facilitated by Gary Ryan

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5 Our plan To explain the 11 business relationship types and performance levels and how to optimise your B2B relationships for high performance

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7 Why bother?

8 Positive Business Implications 1. Alignment of business strategy and external relationships 2. Improved internal relationships (type and performance level) 3. Clearer customer supplier evaluation and selection processes 4. Better negotiation, leadership, communication and interpersonal styles 5. Improved team dynamics, people and change management 6. Appropriate commercial and contractual framework, and terms and conditions 7. Explicit Business Relationship Manager competencies 8. Specific relationship management and improvement strategies 9. Clearly defined customer and supplier segmentation

9 0 to 10RM PRINCIPLE You can t be all things to all people. Tony Lendrum

10 Practices 1. Clarify your relationship type 2. Identify your desired performance standards 3. Clarify how you are going to measure the success of your relationship 4. Align your culture, strategy, structure, process and people

11 B2B Relationship Segments 0 to 10RM Tony Lendrum

12 0 to 10RM 0 to 10 Relationship Management Matrix The Way Keep the Faith Stay Focussed Enjoy the Journey Relationship Performance Superior World Class Outstanding Excellent Good Satisfactory Fair Below Average Poor Unsustainable Zero Vendor Supplier Partner Measure Financial Success Customer / Stakeholder Satisfaction Sustainable Competitive Advantage Best Practice Implementation Innovation Attitude Secondary Current State How To Desired Future State Align Culture Strategy Structure Process People Tony Lendrum Relationship Type Current State Support Approach Desired Future State

13 0 to 10RM THEME SLIDE 1 0 to 10 Relationship Management Matrix The Way Keep the Faith Stay Focussed Enjoy the Journey Relationship Performance Superior World Class Outstanding Excellent Good Satisfactory Fair Below Average Poor Unsustainable Zero Vendor Supplier Partner Measure Financial Success Customer / Stakeholder Satisfaction Sustainable Competitive Advantage Best Practice Implementation Innovation Attitude Secondary Current State How To Desired Future State Align Culture Strategy Structure Process People Tony Lendrum Relationship Type Current State Support Approach Desired Future State

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25 0 to 10RM Performance Levels The Way Keep the Faith Stay Focussed Enjoy the Journey Relationship Performance Superior World Class Outstanding Excellent Good Satisfactory Fair Below Average Poor Unsustainable Zero Vendor Supplier Partner Measure Financial Success Customer / Stakeholder Satisfaction Sustainable Competitive Advantage Best Practice Implementation Innovation Attitude Secondary Current State How To Desired Future State Align Culture Strategy Structure Process People Tony Lendrum Relationship Type Current State Support Approach Desired Future State

26 0 to 10RM Performance Levels The Way Keep the Faith Stay Focussed Enjoy the Journey Relationship Performance Superior World Class Outstanding Excellent Good Satisfactory Fair Below Average Poor Unsustainable Zero Vendor Supplier Partner Measure Financial Success Customer / Stakeholder Satisfaction Sustainable Competitive Advantage Best Practice Implementation Innovation Attitude Secondary Current State How To Desired Future State Align Culture Strategy Structure Process People Tony Lendrum Relationship Type Current State Support Approach Desired Future State

27 0 to 10RM 0 to 10 Relationship Management Matrix The Way Keep the Faith Stay Focussed Enjoy the Journey Relationship Performance Superior World Class Outstanding Excellent Good Satisfactory Fair Below Average Poor Unsustainable Zero Vendor Supplier Partner Desired Future State Sustainable Stable Unstable / At Risk Secondary How To Current State Tony Lendrum Relationship Type Current State Support Approach Desired Future State

28 0 to 10RM Assessing Your Relationships 0 to 10 Relationship Management Matrix Relationship Performance Superior World Class Outstanding Excellent Good Satisfactory Fair Below Average Poor Unsustainable Zero How To Vendor Supplier Partner Desired Future State Current State Tony Lendrum Relationship Type Current State Support Approach Desired Future State

29 Relationship Performance Superior 10 World Class Outstanding Excellent Good Satisfactory Fair Below Average Poor Unsustainable Zero Assessing Your Relationships Vendor Supplier Partner Current State Desired Future State How To Tony Lendrum Relationship Type Current State Support Approach Desired Future State

30 0 to 10RM THEME SLIDE 1 Secondary Relationships The Way Keep the Faith Stay Focussed Enjoy the Journey Relationship Performance Superior World Class Outstanding Excellent Good Satisfactory Fair Below Average Poor Unsustainable Zero Secondary Vendor Supplier Partner Desired Future State How To Current State Tony Lendrum Relationship Type Current State Support Approach Desired Future State

31 Relationship Performance Superior 10 World Class Outstanding Excellent Good Satisfactory Fair Below Average Poor Unsustainable Zero A Business Reality! Vendor Supplier Partner Current State Support Approach Desired Future State Current State Relationship Type Desired Future State

32 0 to 10RM PRINCIPLE Relationship approach is firstly a choice and then a responsibility. Tony Lendrum

33 0 to 10RM Partnering/Alliancing, Pioneering and Community Relationship Types 0 to 10RM Key Components Governance Tony Lendrum Relationship Main Agreement Relationship Charter Shared Vision Joint Key Objectives etc Guiding Principles Relationship Top Level KPI Scorecard Commercial Framework Leadership & Value Proposition(s) Risk /Reward & Non Risk/Reward Based KPI s Sub-agreements, Business Cases, Projects Gainshare / Painshare Risk/Reward Based Remuneration Sub-level KPI Scorecards Joint Relationship Business Plan, Strategies, Action Plans Key Objectives Initiatives Who By When etc

34 V8 0 to 10RM - Relationship Type Key Components Table Appendix 7 T1 T2 T3 T4 T5 T6 T7 T8 T9 T10 Value Propositions Leadership Contracts /Agreements (Internal SLAs) Relationship Charters KPI Scorecard Performance Measurement Risk/Reward Sharing Strategy/ Action Plans Relationship Business Plans Governance Win/Lose Outcome Financial Focus Tough & aggressive Brand image $ & Market Share More dominant competitive position Directive Command / Control Untrusting Arrogant Adversarial Coercive Legalistic Tightly managed One sided Risk Transferred Hard Nosed / $ Punitive Not Appropriate Not encouraged Too open & transparent for Combative relationships Win/Lose KPIs Short Term Profit / Financial focus Tough & Aggressive One Sided Risk Transferred Fixed Price, / Fees / Rates Focus Non-transparent Short Term Profit / Financial focus Separate Strategies/ Action Plans Tightly managed & controlled by each party Command & Control Hierarchical Hostile interfaces & abrasive rub points Tony Lendrum Protect & Defend information & knowledge, $ & Market share, Intellectual Property position & power base Defensive Protective Authoritative Affiliative within the tribe (brothers keeper) Self interest Focus Defensive/ Protective Ownership focus Control focus Restricted info sharing & communications Used to reinforce Tribal / group loyalty Mainly Internal application WIIFM based Defensive KPIs for protecting position & self interest Used for leverage, asserting blame &/or finger pointing Not transparent Risk adverse or risk linked to Fixed Price, Fees, Rates schedule Separate Strategies/ Action Plans Demarcations Secretive and controlled Territorial Interfaces Informal contacts & networks Backroom deals Not open Low / least cost Cheaper prices Undifferentiated Commodity focus Deal based Low switching costs Competitive margins Opportunistic Work/play hard negotiators Autocratic Pacesetting Dealmakers & Traders Deal based T&Cs Cost & schedule focus Undifferentiated Std quality Spec. More company slogans or statements of customer service than charters Buy & Sell focus Simple cost, schedule and quality KPIs Risk and reward separated and not shared More downside penalty s than upside rewards Simple action plans - what, who, when Trackable, traceable, deal based Efficiency & effectiveness focus Simple or single point of contact interfaces Face to face or electronic IP = Intellectual Property FFS = Fee For Service Faster Technology Systems uptime Richness & reach Improved Speed & Efficiency Lower transaction costs Authoritative Task driven Impersonal Faceless Arms Length Service oriented Systems driven and automated Pay & Go focus STD T&Cs Rule Little or no negotiation involved More generic, broad market statements of values, and service level commitments Simple service level KPIs - what, who, when Trackable, traceable, Efficiency, speed, systems focus By exception only Pay & Use focus Std T&Cs cover risk Fixed price or fee includes reward / margin Systems, process, technology driven and automated Depersonalised Electronic or single point of contact Arms length Impersonal Ease of access Simple Do & Charge Greater Convenience IFOTA1+ performance at competitive cost Repeat business & Less tendering Task focus IFOTA1 Focus Authoritative around standards Pacesetting around delivery Do & Charge on agreed scope Cost Plus FFS Prescriptive, inputs IFOTA1 Focus, T&Cs Often implied or inferred or assumed by return or repeat business i.e. integrity based, not typically documented, do what you say BRADs = Business Review & Development Meetings IFOTA1 = In Full On Time to A1 Specification Do & Add Value around agreed strategies Exploit synergies Innovation opportunities Cooperation benefits IFOTA1 input focus. Output KPI focus on KPI focus on medium Strategic KPI KPIs based on quality, short to medium term to long term, strategic Scorecard approach cost, schedule, safety. cost, quality, financial and non including Legacy Formal & informal schedule, service financial outcomes, focus reviews of Product & levels & performance innovation and Direct link to Charter service delivery trends opposite process improvement & risk / reward sharing baselines Typically done via return or repeat business based on performance and competitive, profitable costs / fees Basic relationship management plans, Focus on simple what, who & when actions / plans Simple, single or limited points of contact Work to rule Review is face to face or electronic Do & Improve against agreed baselines Outsource non-core activities IFOTA1 focus on reducing cost base Results driven Outputs focus Authoritative Quality, service & Continuous Improvement based values Outsourced scope linked to KPI measures and contractual performance obligations & T&Cs Charter is results driven Customer centric with an Improvement focus on Cost, quality, schedule, service levels. Linked to KPI performance against baselines/benchmarks Focus on direct costs & total cost of ownership Major Account Plans linked to KPI measures and contractual obligations and supply chain analysis Regular formal performance reviews at mid-senior levels Med-high level contract management interface / focus Consultative Democratic Authoritative Solution driven Team players Complex Multi level Performance based contract & contact Principle centered management Trust focus, flexible interfaces Joint Strategy Outcomes focus Common goals Complex requirements Sharing risk & reward A moral agreement to support legal contract Strategic in intent Not legally binding A performance management tool Direct risk & reward managed and measured at tactical / operational and strategic levels. Innovation focus Strategic Key Relationship Plan leads relationship development & performance Work /Project teams directed by Key Relationship Managers Stewardship from Senior managers Regular BRADs Interdependence Win / Win Collaboration benefits - value add, total Coat, - people, technology - brand / reputation - integration benefits Collaborative Performance Driven Principled, Authoritative Coach, Democratic Affiliative Mutual benefit A strategic engagement document linking purpose, performance, measurement and attitudes Open, transparent shared risk & reward based on over/under performance against agreed KPIs. Operational, strategic & legacy based Joint Relationship Business Plan flexible & adaptive performance & improvement based. Integrated processes Joint ownership, accountability, One Team approach Joint Leadership & Management Teams. Stretch & breakthrough innovation Accelerated improvement Paradigm shift(s) Calculated risk taking Passionate, stubborn Authoritative in Unreasonable in their setting standards demands Democratic in Pacesetters decision making Paradigm Pioneers Affiliative re Trail blazers empathy & support Selfless & Caring Flexible & adaptive to creativity / innovation Leveraging core competencies IP a key element Frame the vision / purpose Simplify complexity Provide clarity, direction & rules of engagement A few simple KPIs frame the outcomes Stretch, breakthrough & legacy focus Linked primarily to improvement and innovation Risk / reward inherent in the breakthroughs required Pioneers often bet their future around unclear risk profiles Joint Business / action plans built on the sense of urgency and breakthroughs required Pioneers, paradigm shifters tend to be dominant players within smail, tight governance team based structure(s) STD T&Cs = Standard Terms & Conditions WIIFM = What s In It For Me Triple bottom line based (social, economic & environmental) & Legacy benefits Common Purpose for the Common Good Flexible & adaptive around managing complexity of community interests Open, transparent documentation Public documents for communications, engagement, public debate and review A moral agreement with broad community support Financial & Nonfinancial KPIs representing community & legacy outcomes rather than vested interest outcomes. Open, transparent shared risk & reward Individual responsibility Collective accountability Community based Business Plan Triple bottom line & Legacy focus Common Purpose Common Goals Extended supply chain & community governance Fuzzy Open source type governance structures

35 0 to 10RM Some examples of sub-kras and/or KPIs include: KRA Financial success Customer/client and/or stakeholder satisfaction Sub-KRA and/or KPI Profitability, Return on Investment, Total Cost improvements, revenues, volumes, outputs, overall value for money, unit costs, transaction costs, working capital, other financial indicators. Quality, cost, schedule and service levels, response times, business case or project completion, survey results, flexibility, responsiveness Sustainable competitive advantage Best practice implementation Market share/growth, customer/supplier loyalty/retention, referred business, % available business, % negotiated business, image and reputation, employability, career development. Benchmarked efficiency, reliability, availability, capacity utilisation, implementation of systems, processes procedures, the degree of operational excellence. Innovation Time to market, development cycle times, number and success rate of innovative ideas, continuous and breakthrough improvement, new paradigms engaged. Attitude Behaviours, mindsets, engagement, work practices. Tony Lendrum

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38 Contact Details Gary Ryan

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