To achieve optimum project performance in complex and strategic supplier relationships, you need to enlist the help of skilled people, placed in the right roles, while allowing them the freedom necessary to bring their skills and expertise to bear on the project. Nothing new there I appreciate, but it’s how you go about ensuring this that could well separate the service you’ll receive from the problematic complex/strategic projects others will experience.
Although a ‘skills gap’ is often cited as the primary reason for these types of projects failing to achieve their intended outcomes, this is just one of a number of important issues that combine to sap the energy out of a relationship. Other factors are also at work that often hold you back and reduce chances of innovations developing – innovations that might not only see your expectations met, but surpassed by a partner in tune with your needs and dedicated to doing their best for you and the business outcomes of your project.
In today’s complex, cut-throat world of large project contracts and ever-tightening budgetary constraints, it’s all the more important to have the correct structures and processes in place to encourage you to do the day-to-day tasks that often make a big difference to your project performance and the relationships that guide them.
Project Performance Success – 6 Critical Friend Challenges
Here are six areas to critical-friend challenge yourself in your approach that are likely have a major impact on your large project relationships and project performance success.
1. Labour over your business case for project performance success
While some complex project business cases clearly articulate what has to be achieved in terms of quantified business outcomes (improvement of what specifically, by how much and by when), many do not. If you don’t clearly communicate what you are looking to achieve and why, neither your project partner nor you will know when you’ve hit that milestone.
If your partner doesn’t have a crystal clear understanding of your quantified goals, it’s unlikely that they’ll be able to achieve them. It is, therefore, imperative that your organisation undertakes an extensive analysis of what it wishes to achieve and why, to provide the clarity necessary to reach a successful outcome. To do so may prevent misunderstandings that otherwise could occur and grow to cause problems later in the project.
In our experience, when complex projects run into trouble it is common for us to find that there is a lack of clarity in the business case. This may be either in the definition of the intended outcomes, or in KPI settings designed to drive the right behaviours between everyone. Often there will also be a lack of clarity within the business case relating to the effective monitoring of whether you are achieving those behaviours in the relationship.
When building your business case, we often find that ensuring the project has clearly defined outcomes that justify all necessary investment the organisation will need to make throughout the entire life cycle of the relationship, helps to provide great context and minimise misunderstandings. When the outcome – or outcomes – have been properly defined and the difference between current and future states quantified, you’ll find it much easier to identify possible risks and opportunities that will need to be accounted for; in turn, this will aid you in producing more accurate costings and timescales. It is important that this business case is not only a ‘best case scenario’ view, but also a real-world analysis of both what is achievable and the challenges you’ve identified that might stand in your way.
At this point, it’s important to consider whether all the right stakeholders have been involved in the analysis, and whether you have gained buy-in from all those you need on your side to support the project. If you neglect any of these areas, you will open yourself, your project and your organisation up to miscommunication, which could lead to increased costs, spiralling timescales and a lack of support from senior stakeholders. In our experience, this could well reduce your project’s chances of success.
The clearer you can be, the more confident and collaborative your relationship with your project partner will become. Plan to succeed with a detailed, clear and thoroughly researched business case.
2. Work out what motivates your service provider
An autocratic approach to management may work with some simpler, more transactional, supplier relationships, but when managing complex projects, it is important to work collaboratively with your service provider to achieve the best results.
It is increasingly important for clients to understand how best to motivate their project partners to get the most from them. Having built a robust and comprehensive business case in step one above, you’ll know exactly what you need from your supplier. Collaborative support will help you get there. Understanding the mindset of the people you’ll be working with can help you negotiate with them to gain their (hopefully undivided) commitment to your goals. It also usually encourages innovations that will see greater outcomes than those you had envisaged at the outset.
Your partner needs an agreement that effectively incentivises them to work collaboratively and innovatively with you. It may contain penalties as a fallback, but this can often be seen as rather a ‘blunt instrument’ if not operated and managed in the right way. Your governance should build an environment that entices the right behaviours needed to drive strong project performance and shared aspirations. A lack of understanding and a ‘fit for purpose’ contract created to maximise the right behaviours will often lead to ambiguities that may allow for opportunistic suppliers to charge exorbitant sums for change fees, administration and ‘extras’.
We cannot overstate the need for building a collaborative relationship with your project partners. Misunderstandings, diverging objectives, animosity, and a breakdown in communications – all usually have a significantly detrimental impact on a project. However, the risk of this happening on your project can be minimised by starting the relationship off in the right way, gaining a deeper understanding of one another and having clarity of purpose.
3. Properly utilise service provider expertise
Where you have selected your project partner for their specific expertise, utilise it. After all, as specialists in their field they are likely to have worked on more projects like yours, bringing external and wider experience across other organisations and sectors, than you and your team may have. Your provider may well have insights and ideas that could benefit your project, and they may be better placed to determine ‘how’ to achieve the outcomes you have identified in your business case for the project.
Gaining their expert advice, getting them to ‘sense check’ your goals and objectives, and having them carry out appropriately detailed due diligence on the project before you commit significant funds to it, makes good sense.
The due diligence exercises undertaken by suppliers, providing these are structured in the right way, often identify new ways of working that had not previously been considered practical. A bond is formed thanks to the duty of care the advising organisation must take to not only develop the best solutions, but to warn against any material issues or impacts on the organisation or outcomes from the project.
The supplier’s ‘duty to warn’ starts the moment they offer guidance as an ‘expert’ in their field and continues throughout the relationship. And this duty covers not only a responsibility to offer considered advice, but to also point out where your business plans are insufficient or where their capacity to deliver on your expectations may be lacking. But from this can come significantly improved strategies and it is an opportunity to start a collaborative relationship in the right way by agreeing mutually beneficial approaches that can be built into your agreement.
Be careful not to unnecessarily constrain your provider. If they aren’t given the freedom to propose new ideas to realise your intended objectives, you’re unlikely to reap the full value of the provider’s expertise.
4. Clear contracts lead to better working relationships and improved project performance
As we noted in #3 above, it’s important in many complex/strategic project relationships to leave the details of ‘how’ a supplier will achieve your objectives to the supplier that you instruct, but that does not mean your contract with them should be ambiguous. The more clarity you can bring to the contract development stage of your relationship, the more fruitful the relationship will be.
Minimise the potential for adverse risks, unforeseen costs, or misunderstandings by specifying clear, mutually agreed goals and governance. Clarity is the first step on the road to driving maximum value between you. Create your contract in collaboration with your supplier by reverse engineering it from the business outcomes you want to achieve once the project is operating in BAU mode, so you produce a document that’s detailed, fair and understood by all, making it far more likely to be followed.
Build into the agreement a regular review and update schedule so that your contract can evolve with the relationship. And, be sure to build a roadmap from inception to completion so that each stage can be considered, discussed, and outlined for all to understand and agree upon.
While pressures to launch a project may be intense, it should not be a reason to cut corners in the formation of your agreement. An ‘agreement to agree’, where ambiguity is built into a contract to be cleared up later, significantly increases risks, and must be avoided. There are many mechanisms to bring clarity to outcomes and contracts right at the very beginning, even in the most complex of service delivery arrangements.
The very best contracts are reverse engineered from the business outcomes you established were your objective. Start with the end result and work back from there.
5. Intelligent Client Function (ICF) and the need for in-house expertise
Management of these complex project relationships is a talent that requires deep domain expertise. Too little fit for purpose governance and your trust could be misplaced or abused; too much and you can stifle creativity and encourage a work-to-rule mentality.
Some project managers may feel that when dealing with the design and implementation of a complex project, that it is the supplier who should take full responsibility for the management of that project. This depends on your reliance of the supplier’s expertise. While many suppliers will be more than happy to take on full responsibility at a decent risk cost premium, you must be mindful not to also outsource too many of your in-house skills and expertise. By going too far, you run the very real risk of losing the in-house skills and knowledge that could provide the insights necessary to keep a relationship and the project/service delivery on track.
The management of complex/strategic relationships should always be handled by an in-house function or team. Their involvement will ensure that any early indicators of trouble are recognised and pre-empted. Similarly, where a number of options arise to improve service delivery, your own team will then be able to influence the final decision to get the right outcome for your organisation. If you leave it entirely up to the provider, you will likely lose that degree of control.
Ultimate responsibility for management remaining in-house means having the right people with the right knowledge firmly embedded in the decision-making process to be followed by the vendor’s project team.
An ICF team does just this. Consisting of in-house and newly recruited specialists with overlapping areas of project-specific and technical expertise, their pooled skills will ensure that future challenges are dealt with appropriately while minimising risk. Their communication and technological skills will ensure that they remained informed and able to positively influence the behaviours of all concerned, to guide the project through rocky waters to a successful conclusion.
Effective management means foresight, influence and the strength to wield it, and this should always be governed by you.
6. Comprehensive project team handover process
Once procurement, legal and commercial teams have done their ‘bit’ and the project is underway, the project delivery team will often take over. The common problem with this is that all the good will and collegial feeling built up in the initial stages doesn’t necessarily get passed on when the project changes hands.
One way of ensuring continuity is to develop a comprehensive handover process where all pertinent information (especially the background and context as to why certain key decisions were made) is passed on, though this is not done nearly as often as it should be. Then there is the better supplemental option of also integrating members from the earlier teams into the new project team so that familiar faces can smooth the transition. In addition, involving your ICF team in these aforementioned early stages eliminates many of the issues associated with a handover, as their presence will persist throughout the entirety of the relationship, so that nothing is lost.
Knowing what you want to achieve and why is critical. Articulating it so that both internal stakeholders and the members of your strategic supplier team, understand it too is even more so. Influence your strategic partners to achieve your goals, listen to the right people, minimise contractual ambiguity in favour of clear, informed, agreed and mutually beneficial contracts, keep overall control for critical-friend challenging your project partner in-house, and ensure that every opportunity for collaborative working is exposed and exploited.
In doing so, you’ll identify and resolve issues far sooner and unlock greater value, drive greater project performance over the life of the partnership and you’ll open the doors to innovations that will lead to true business transformation.