What comes first: the relationship or the deal?

Last week I talked with a colleague about our experiences in how companies deal with alliances and other kinds of business collaborations.

We noticed that many senior people treat alliances as if it is a deal. Closing the contract is a goal and sometimes it is even a personal KPI of the executive in charge. Then, when the contract is signed, they send out a press release and feel their job is done. Also in other business collaborations, like working in close cooperation with a supplier or customer, there is often a tremendous focus and pressure on closing the deal.

In both situations the people in charge often feel that once the contract is signed, the work is done. However, that is the moment the real work starts. By focusing on the deal first, a lot of time, energy and exasperation is often wasted to deliver on the promise of the contract.

In companies that act this way the internal departments most of the time do not collaborate, let alone collaborate with the other company. These companies lack a collaborative mindset and an integrated collaborative approach for collaborating with other companies. For these companies the deal comes first.

At the start of the Renault-Nissan alliance in 1999, Renault sent 23 executives to Japan. Their task was to understand the way Nissan was working and to identify areas for improvement. To do so, these executives worked closely with Nissan employees in a consensual way, respecting the Japanese culture and the obvious differences between the two companies. Renault-Nissan did put high emphasis on relationship building to make the alliance work.

This alliance over time brought the two companies closer together. They are still two separate companies, yet they are collaborating in many areas; in global sales, in purchasing, in information systems and in setting each other’s strategies. For Renault-Nissan the relationship comes first.

A collaboration is a relationship, not a transaction. Consciously building that relationship should start the moment you meet your potential partner for the very first time. Trust and respect for each other’s cultures are essential cornerstones of a relationship. Companies that do so, and align well internally, are the most successful ones in collaborating with customers, suppliers and alliance partners.

The Renault-Nissan alliance is a good example of an alliance that has build a solid foundation, enabling the alliance to expand over time to the benefit of both partners.

Relationship comes first and the deal is only one of the many major milestones in collaborating with other companies. If you are part of a company that is fully focussed on creating deals, then it might not be the easiest task to turn that around and ditch the KPI that is on your deal. And you don’t have to!

What you can do is realize that you will most likely create a more attractive deal for all parties involved when you put the relationship first. Start to consciously build that relationship, make sure to travel to your partner and visit them in their premises. Be able to look them in the eye, experience their body language, start to understand and respect their culture and habits. You could consider organizing a facilitated joint workshop to design the collaboration together.

When the relationship is there and the foundation of your joint future success is ready, with a clear win-win for both parties, the deal will be an easier one to close as well.


 

 


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