Collaborating and colliding: when alliances go wrong

Business alliances fail more regularly than marriages, for surprising reasons. Flickr/Alex.E.Proimos

Alliances between organisations are a powerful form of collaboration.

But their failure rate of 50% outstrips the average Australian marriage. It’s a sobering statistic for anyone involved in sectors where industry partnerships, outsourcing or public private partnerships (PPPs) are the norm, such as banking, IT, construction and government.

Whether we’re talking strategic alliances or nuptials, you might assume that a key to success is each party having a clear goal. You’d be wrong: a clear company goal can be very destructive in teams where people from different organisations must collaborate to achieve a common outcome.

My research on conflicts within inter-organisational teams shows that for a venture to succeed, both partners must have clearly defined common goals next to their individual goals for these teams to work with.

The boundary riders

An ambitious project like the Victorian Desalination plant is typically too big to be managed by one team; it requires a whole constellation of teams. These are assembled from teams within companies, but also from teams in which people from two or more organisations come as representatives, known as alliance teams.

Subgroups in these teams often form along the organisational boundary lines and are reinforced by the diversity of organisational cultures, personality, gender and functional roles. These lead to splits and conflict in the team, affecting the alliance performance.

There are three types of conflict in these types of teams: people argue about who should do what. They argue about how these things should be done. And finally there is personal conflict.

This sort of problem can be addressed by both motivational and structural solutions. Having strong common goals for the team, next to separate goals for each company, is one motivational solution. Having teams assigned clear tasks and working procedures is a structural solution.

Start sharp-shooting

One European telecommunications giant in the Netherlands outsourced its human resources services. Of course, the HR provider wanted to deliver great HR services - that was the whole purpose of the collaboration. This provider also wanted the deal to be profitable. On the other hand, the telecommunications giant did not want to pay too much for the services it was getting.

So both parties set to work on some ground rules and structures. The collaboration went very well, especially when teams were talking about a clear future that would bring them both value. But in the next meeting when they began discussing finances, they began using “us” and “them” language: “You should pay for this and we don’t want to turn up for that.” The companies’ common goals were not sharp enough to overcome these conflicts that arose outside their initial meeting.

A common goal holds value for both companies and therefore makes the partnership and its costs easier to sell internally and it makes people realise that they are in this together so they form one team instead of two subgroups.

The importance of good bones

What’s especially relevant in this case is to not just have a shared goal, but to have the structures in place to realise these goals — in other words, translating a goal into specific measurements that can be applied on the team level.

It takes some effort to do this. Companies invest a lot of time to do this for their own company, but they should realise it is important in an inter-company situation as well to get it down to the team level. Part of this structure is to think about how to divide future revenues and costs over the partners.

There was one team concerned with daily activities in the telecommunications partnership. This meant if there was an incident or something went wrong with a certain project they would discuss what was required to reach a solution no matter what was involved.

There was a separate team who would deal with the financial part of that solution. This separation of interests and tasks works very well and is a good preventer of conflicts.

It means you have to be very clear about which team does what tasks, how they contribute to the overall goal and how their performance. The more specific you can be about this, the easier it gets to work in these teams.

Corporate bonds

A more motivational solution is to organise social events, say every six months, in which everyone involved in the collaboration, and their immediate work colleagues, comes together for a fun day out.

In most events like this, team members talk about the work they were doing… up to a point. The simple act of getting to know each other means they came away better understanding the corporate context that each person works in.

One such successful social event was held at a farm. Over cakes and coffee in the sun, everyone reflected on the past half year - what went well and what went wrong. The day was anchored in a formal presentation.

But the informality of the surroundings – an old cow shed – encouraged involvement, understanding, and open and transparent communication that would not have taken place via email over distance. An after-lunch round of golf in a paddock with grazing cows, trenches, water and bridges cemented the connections that had started to take place at a personal level.

People stopped talking about work and started talking about their families and the schools their children went to, and what they were doing on their holidays. They then took those bonds back into the office.

In-site learning

Another way of fostering empathy between teams is to locate new team members at the supplier’s site for several days, so they know what is going on and how the work is done.

In the example above, the telco workers also agreed to have more real-life meetings at each other’s sites so they could be more aware of the context in which they were working.

This gives the companies the opportunity to emphasis common goals and to discuss conflicts that had occurred in the past and learn from those conflicts and mistakes.

This ‘reflexivity’ is an important structural solution that improves working relationships and brings the team closer together. It’s easy to put a moment of reflection on the agenda of every meeting: to reflect on collaboration, how tasks should be done and how tasks have been done.

Prior to this type of reflection, teams would set out the whole process of starting a project, from start to finish. Person A must send a work assignment to person B, who has to send it to his or her manager. The manager then sends a formal request to his leadership team asking for approval to begin work, then that approval is handed back down the line again.

In time and through reflection, team members established enough trust and confidence to overcome the need of control. By simplifying the rules and structures they were able to bypass the formal procedures and simply use email or telephone to communicate and confirm a new project.

Colliding becomes collaborating

Organising for effective collaboration between organisations is very different from organising within organisations. Teams fulfill an extraordinarily important role in these settings, managing their performance in relation to the overall goals is of importance to the success of the venture.

Martijn is now seeking Australian companies interested in participating in similar research.