Rebuild Trust & Create More Productive Strategic Partnerships in 4 Steps

By Allan Watton on September 4, 2018

Trust is a vague concept at best – hard-won and all too easily lost, faked by some, presumed by others, but vital to master. Trust may be an intangible asset, but it can have a very real and significant impact on your strategic partnerships and the projects you work on together. This article looks to demystify the art of rebuilding trust where it has been lost and the very real commercial reasons for wanting to do so.

With around 50% of all outsourcing relationships failing to perform to expected standards, it’s important to investigate how your own strategic partnerships can improve upon those odds. Winning and maintaining commercial trust not only ensures a more convivial relationship, it can mean increased chances of innovation, cost-savings, collaboration and outcome value maximisation on your project. These are the real and tangible benefits tied to starting your relationships off on the right foot, maintaining them in an environment based on mutual trust, and knowing why and how to rebuild trust when a relationship has gone astray. But that’s something you will need to work on, and it may well mean a significant shift in perceptions and actions.

The Commercial Trust Conundrum

How trustworthy are you? Most would consider themselves trustworthy, but do your actions mirror this and how do others see you? Now consider your suppliers and vendors – how trustworthy do you consider them to be, or they you? Are they the sort of people who will stand by your side, pull in the same direction, with the same goals as you, or are they following their own agenda?

Trust is a matter of perception, and it’s your job to make sure that all those around you perceive you as trustworthy in both word and deed. But the conundrum is how to achieve this with so many competing motivations, objectives and even egos on a typical project, not to mention the mass of preconceptions that people will have about you and your organisation, and that you will have about theirs, before you even meet.

For all those who have experienced manipulative working relationships, or found themselves in a strategic partnership where trust has been at a low, it can seem that once lost, trust is something that can never be recovered. However, in most cases, no matter the state of the relationship, there are ways in which trust can be recaptured and the partnership put back on an even keel. But, this may well require some difficult decisions – changes in on-the-ground behaviours, your initiatives and actions, and your judgement of who is, in fact worthy of your commercial trust.

Who to Trust, When and Why

It is possible to run a project from an ivory tower, passing down proclamations that you expect to be followed on pain of contractually agreed penalties being brought into force… but most major outsourcing relationships respond better to a collaborative approach. Why dictate to the strategic partner that you selected for their specialist knowledge and expertise when this could well erode their potential for value-building innovations. However, to get to the point where such a relationship is possible you first need to build – or rebuild – your commercial trust.

This involves:

1. Identifying the opportunity on offer and the right person to put your trust in.

2. Recognising the risks involved in trusting that individual or organisation with the opportunity.

3. Analysing their credibility to determine whether your trust is warranted.

Trust is not about blindly wandering into partnerships, it’s about doing the legwork to fully assess whether those you wish to trust with your opportunities are worthy of it.

In our experience, the vast majority of poorly performing outsourced relationships can be turned around with the right emphasis placed on commercial trust, resulting in improved productivity and prospects for the project.

Trust is not just a route to better working relationships: it also has a finite commercial benefit. A survey conducted by the LSE (London School of Economics) showed that up to 40% cost savings could be achieved in outsourced relationships where commercial trust was a strong factor. A negative impact of a lack of commercial trust was also identified in the form of a 50% higher staff turnover – something that rarely results in a positive outcome for a project.

Four-stage Process to Rebuild Trust

Now that we have identified why it can be so important to develop, maintain and recover a trusting relationship with your vendors, we thought you might want to get an overview level perspective on how to rebuild commercial trust where it has been found lacking.

STEP 1: Be open to trusting others

Preconceptions about vendors in general, or one in particular, based on assumption or experience can taint our ability to form or reform productive working relationships. Therefore, no matter even if the individual or organisation has, in the past, let you down, it is important to at least be open to the possibility of rebuilding trust with them. Of course, this does not mean forgetting what has happened in the past, but it’s about giving everyone a clean sheet and dispassionately assessing their suitability for your trust. Then, if there is a commercial benefit attached to attempting to rebuild that trust, to be open to this possibility.

STEP 2: Be trustworthy to win others’ trust

What you do says far more about you than what you say, because everyone knows that there is quite often a chasm of difference between intention and action. The difficulty arises from the fact that others can only judge you from your actions, and, therefore, no matter how generous your aims, it is what they see and experience of you that will help them to form their opinions about your trustworthiness.

To rebuild trust you will need to make the first moves, you will have to change behaviours, offer a flag of truce, and look to mend bridges. Be the person you want them to become and often you will find that they follow.

STEP 3: Clarity of message reduces the opportunity for lost trust

The transition stage from mistrust to trust is a delicate time, one where all your efforts can be either reduced to naught or reap rewards for you. To prevent it being the former it is imperative that you state your intent clearly and plainly in order to rebuild a relationship with mutual trust at its core. This clarity should then be continued with, using language all parties can clearly understand, delivering on your promises, and maintaining robust lines of communication so any misunderstandings can be discussed and not left to fester.

STEP 4: Trust begets trust

Through investing in your vendor relationships and building commercial trust you have the opportunity to extend the positive influences this generates far beyond your immediate working relationships. By creating an environment in which vendors are trusted, and know it, in which positive behaviours are rewarded, and innovations valued, you improve the prospects for your projects. Not only that, but you may well find that your vendors start to reflect similar behaviours with their subcontractors getting even more from them. Trust begets trust, and this can only benefit your project.

Conclusion

It is a rare outsourced relationship that does not involve a trust ‘wobble’ every now and then, but it’s how you approach the resolution to this potential problem that will separate you from the crowd. Be trustworthy to attract trust, be wary of the honesty and ability of others but give them the opportunity to prove themselves to you. Be clear and concise and do not jump to conclusions or allow preconceptions to skew your opinions on someone’s trustworthiness.

Commercial trust has a vital role to play in today’s business world, but don’t just take our word for it – let the figures talk for themselves. Since commercial trust became a fundamental part of PepsiCo’s management strategy, revenues have increased by 72% and profits are up 100%. Since initiating a commercial trust policy, eBay have seen their financial returns rise to a point where they are now 75% higher than the industry average, and similarly Google has seen their revenues grow to 76% above industry average. Costs at American Express have fallen to 16% lower than their industry average. And Grameen Bank’s 98% debt recovery success, 23% above their sector’s average, can likewise be attributed to their commitment to their commercial trust policy.

Think strategically about your own commercial trust policy and your organisation could see similar results.

Photo credit: iStock

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One thought on “Rebuild Trust & Create More Productive Strategic Partnerships in 4 Steps

  1. David Orr says:

    Surely, BPG should be simultaneously pushing this article at the big outsourcing contractors?

    Mutually trusting relationships are built upon a 2-way relationship, so the contractors behaviours are key.

    Surely, you cannot make a trusting commercial relationship the responsibility only of the contracting public body and their Client Function.

    A 50% fail rate is unacceptable and I believe understates the results in many Council joint ventures I have seen these past 10 years: Suffolk, Liverpool, Birmingham, Somerset, Cornwall etc.

    None of the private company examples above contain one name that is a well-known public outsourcer e.g. Capita, BT, IBM, G4S, Serco etc.

    Cornwall Council in 2013 trusted that BT could provide the employment and work that they promised to bring to Cornwall in order to win the contract.

    Similarly, in Somerset back in 2007, the Councils trusted IBM’s promises for massive savings (£192m) and service improvements (through “World Class IT”).

    Is there an issue in the outsourcing industry that sales staff who close deals with Councils and other public bodies get all of their commission up front as soon as the deal is signed?

    Should some of the commission be tied to actually delivering the benefits claimed by “slick” sales staff, who zip off when the ink is barely dry on the contract?

    My personal experience when working in South West One for 3 years with IBM management and staff was that their bonus system built around hitting quarterly targets (usually around revenue raised from the public bodies in the contract), distorted behaviours and damaged trust.

    Is it time for BPG to lobby Government, CLG, LGA, CBI, Contractors Association etc to develop a Trust Charter that applies to all public contracts, in order to build in trust-based commercial relationships from the contractor, as well as the public body(ies), from the outset?

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