Skill Definition – Developing the most appropriate structure for the relationship given the size, strategy and intended scope. This could be formal or informal and includes identifying: the governance model, key stakeholders, and relationship documentation.
A demonstration of this ability would probably involve the following:
§ In the Transactional category of partnering this aspect is extremely important of course and it entails the relationship manager negotiating th best terms for the partnership. But notice that simple adversarial haggling might be inappropriate and you might want to give the partner the opportunity to impress you with offerings that are beyond the legal contracts or structure. The partner is unlikely to do that if he feels that he has been ‘screwed down’ to the last penny in an aggressive process.
§ Negotiating a global agreement is a time consuming task and it is very often better to negotiate local agreements as pilots where you can, and then later build then up into larger arrangements as the relationship starts to show its value.
§ When you are negotiating you are not earning! Remember to spend an appropriate time in the negotiating process, as the phrase implies if no common structure has been agreed it is unlikely that both sides would be prepared to commit to significant investment or growth plans.
§ Know when to walk away. It is very tempting having spent a considerable period of time or energy in partnership negotiations to carry on to ‘see it through’. But the best partner managers go into negotiation situations with a claer understanding of how long the process should take. If it take longer than they are usually prepared to walk away and consider a second choice partner who might be able to come to an agreement quicker.
§ It is important to know what intentions and objectives you are trying to achieve with the relationship because different types have different optimal structures. For example a ransactional relationship would probably have a simple supplier agreement whereas a Joint Venture structure would require a much larger set of complex documentation. It is identified best practice to develop an MOUP (Memorandum of Understanding and Principles) document first to identify such things as: objectives, revenue streams, costs, key stakeholders, governance model, etc.
§ Different alliances have different purposes (i.e Development, R&D, Cost Reduction). It is highly likely that the O2 Procurement Department will have standard templates which could accelerate your efforts here. It is worth while keeping up to date with these as they can save you a great deal of time and traouble.
§ Remember though that the structure that works well for one relationship may not be the structure that works well for another.
§ In many cases in a Transactional relationship the need is for speed as an identified business opportunity might pass O2 by if too much time is taken. It is here that the factor of Business to Business Trust comes into its own.
§ Also remember that the best partnership documents (even Transactional ones) have an elemnt of shared risk reward. This should be carefully built into the overall contractual framework.
§ Generally the evidence suggests that the greater the risk / reward the greater the payback to the relationship.
§ Finally remember the adage ‘form before function’ and design your relationship first before involving your legal department.Download