Wednesday, February 6, 2008

Do You Trust Your Partner? And other observations from CoDev

I mentioned in a past post that I attended CoDev last month, and the theme was Open Innovation.

Speakers touched on a number of topics, from where to find innovations, to different models like co-development or licensing, to building an open innovation culture at your company. But I was pleasantly surprised to hear one common theme - Trust. The fact that Trust was discussed was not surprising in itself, but rather the fact that nearly every speaker mentioned the importance of Trust and relationships in co-development. One speaker even devoted most of her talk on how to manage and nurture co-development and partner relationships.

I can't stress the importance of establishing trust in a co-development or product outsourcing relationship. While I'm not advocating that you gloss over contract terms, you will never think of all the possibilities and cover everything in the contract up-front, and things will change. What will get you through to a successful release is trust and open communication. I'll never forget a colleague telling me, if you are in the middle of a discussion with an outsourcing partner, and someone says, "Let's look and see what it says in the contract", the relationship is very likely too far gone.

Dr. Alison Lukacsko, VP of R&D at Church and Dwight, had a couple of great slides in her presentation. One showed the results of a study from Vantage Partners, that showed that 52% of co-development arrangements fail because of the relationship. Legal and Financial T&Cs accounted for 14%. But her best slide is one of the most valuable pieces of advice and ways of looking at co-development partnerships that I've ever heard. She says Partnering is about managing differences. You hear people talk about how co-development or outsourcing relationships are like marriages. She likens co-development to being more like raising a teenager. You are two people with different perspectives, and your own lives, trying to bring this product to market and have a successful life, and the project has a life and a mind of it's own.

Here are a few tips
  1. Know thyself: What is your corporate culture - formal or informal? How do you make decisions, by consensus or command? What is your operating style - cowboy or process driven? Know these things, and then know them about your partner. It will help you understand your partner's point of view, and reach consensus faster when things get rocky.
  2. Bad news has to travel as fast as good: this is one of the toughest things to put into practice, but when you have bad news you have to get it out in the open immediately. This has become a mantra at Macadamian.
  3. Discuss the tough stuff up-front: What will happen if the hardware is late? How much time do we realistically need for approvals? One anti-pattern I see often is the tendancy to say "let's cross that bridge when we get to it". I think people worry that having those tough discussions on day-one will somehow hamper the relationship. Because it was in the contract or the SOW doesn't mean everyone read it, or thought it was important ("you mean you're delayed since I didn't get you that answer in 48 hours? I thought that was just a standard T&C). You are better off working out expectations up front, even if it's a tough conversation to have.
  4. Communicate often, and speak plainly. 'Nuff said
  5. You can't turn your partner into you: I stole this one from Alison Lukacsko. It sums it up nicely - your partner has different motivations, different business goals, and a different culture. You are in this relationship to release a product, not to make them more like you.

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