Business Agility requires partnerships crafted with flexibility and driven by customer value so both an organization and its partners are able to adapt in a coordinated and complementary manner, rather than a series of contractual transactions.
No company is an island. Vendors, distributors, retailers, suppliers; these ecosystem partners enable you to deliver products and services to your customers.
Thus, as with each of the domains, the agility of these partners limits your business agility. If it takes 3 months to get a change request actioned by a strategic vendor; if your distributor cannot react to market changes; if your retailers alienate your end customer; or if your suppliers cannot adapt quickly; you will be fundamentally limited in your market adaptability.
Addressing this means that you need to consider your ecosystem partners in your transformation. Develop partnerships from a basis of mutual respect. Design interfacing processes, such as procurement, contracts, change management, and communication, to enable agility in the relationship.
You also need to invest in developing partner organizations up and down the supply chain. Educate existing partners and encourage them to undertake their own transformations. And select new partners, not only on competence and price, but also adaptability.
Your goal is to ensure that your entire partner ecosystem enables business agility, rather than restricts it.
Adopt Agile Procurement
Agility with your external partners starts at the very beginning, i.e. during the selection process. Design your procurement processes to select partners who can quickly adapt to change whilst providing clarity on business outcomes. Adopting practices like Lean-Agile Procurement can bring transparency and clarity into the procurement process for all parties.
Develop Agile Contracts
In any complex environment, the standard fixed price/scope/time contract has never worked. Develop new contract forms with your partners to ensure they can gracefully handle ambiguity and change. Contract forms such as fixed price/variable scope, time & materials, and fixed price + fixed constraints (e.g. quality, ROI, defect resolution, MTTR, etc.) are more suited for strategic partners. Corresponding changes to how your legal and procurement teams work will make this effective.
Take the same care when onboarding partners as with onboarding new employees. Consider building a one or two-day onboarding programme to clearly articulate; basic logistics (e.g. how you get paid and who can help), your ways of working, why you chose to work that way, expectations of the partnership, and your organizational values and mission. This small upfront investment greatly improves your chances at both a positive outcome and a valuable long-term relationship.
We support different engagement and contract types (e.g. fixed price & variable scope) depending on the level of trust we have with a partner.
Our contracts and procurement processes require and support ambiguity, uncertainty, and agility from our suppliers.
We have integrated our supply chain partners into our strategic planning and budgeting processes.
We are able to build strategic partnerships based on shared business outcomes (e.g. power-by-the-hour or outcome-based contracts) with our trusted partners and suppliers.
We go beyond transactional engagements by actively developing ongoing relationships with critical partners.
Our critical partners share our goals and are actively invested in our mission, but remain governed by strict contracts.
The relationship with our critical partners is more important than the terms in the contract. We find ways to achieve our common goals together.
Work with critical partners is seamless, transparent, and integrated into our value stream. We make decisions with the entire ecosystem in mind, not just one party.