Earlier we discussed the importance of trust in a relationship. Trust, however, is only one building block of several involved in the creation of strategic partnerships. This section will briefly introduce five foundational elements and present how they form long-term, successful relationships.
These elements include:
- mutual trust
- open and truthful communication
- measurable mutual goals
- organizational support
- commitment to mutual gain
Mutual trust: Not all building blocks are created equally; the most important of the five foundational elements is mutual trust. As previously mentioned, trust is the confidence one party has in another to perform an action as agreed. In order for a partnership to be successful, trust must be mutual. As mutual trust grows between partners, parties will not limit themselves to contractual requirements but actually go to great lengths in order to satisfy the other partner, as well as strengthen the relationship.
Open and truthful communication: An additional element in building long-term, successful, relationships is establishing open and truthful communication lines. Parties that communicate openly and truthfully have a better understanding of each others’ visions, missions and goals in the relationship. One way this can be accomplished is by always creating environments where each party feels comfortable speaking up. Once both partners gain a strong understanding of what motivates the other partner, dealing with changing business conditions becomes significantly easier. Communications often include the exchange of measures of the efficiency of shared business processes.
Measurable, mutual goals: A key element necessary for relationships to be successful is having both parties share measurable, mutual goals. Mutual goals allow parties to pool together company resources and strengths. In order to ensure goals are being met, they must be measurable and quantifiable. Some examples of measurable mutual goals include sales revenue, return on assets, or some performance indicator of customer satisfaction. Measures may also include production levels, error-rates, or other items that enable integration of the businesses processes of the partners. Agreeing on the items to be measured and establishing a continuous measurement program is necessary to provide optimal cooperation among partners and a substantive contributor to establishing mutual trust.
Organizational support: The support of employees throughout the organization is another key element in creating successful relationships. The organization as a whole, from front line members to local and corporate offices, must support the idea of a partnership. Structure and culture are the underlying roots that create organizational support. Although it is expected that employees support management decisions, it is necessary for managers to objectively understand and evaluate the structure and culture of the organization when designing partnership relationships. Proposed partnerships perceived as contrary to the existing structure or cultures are candidates for enhanced scrutiny. Once a partnership is entered into it is necessary to develop programs such as training and rewards to establish the desired partnership behaviors. Establishing these types of programs will increase the frequency of and improve the dynamics within the interactions of both partners. Training teaches behaviors which are needed to achieve partnership goals and rewards encourage the support of the previously taught behaviors.
Commitment to mutual gain: The final building block in the foundation of successful relationships relates to the level of commitment each partner has in creating mutual gain. Simply put, partners look out for one another and do not take advantage of each other. If one party has more resources or more efficient operating procedures than the other, this should not impact the relationship. If problems arise within the partnership, both parties need to consider the mutual investment each has contributed to the relationship. Mutual investments, or relationship-specific assets, are the tangible investments and resources that are specific to the relationship in nature. Although mutual investments strengthen mutual gain, they cannot be easily transferred if a partner wishes to leave the relationship. Thus, it is important to evaluate the level of intrinsic gain that has been established through the partnership. Ideally, such an analysis is performed before entering the partnership, although it requires the manager to make a substantial number of assumptions.
These foundations of relationships comprise the broad range of factors managers must consider when developing and implementing durable relationships. In addition, developing relationships consist of a series of phases that explains how they are identified through how the partners become committed to continuous improvement of the relationship. The next section presents these phases of relationship development.