In an effort to improve their organizational effectiveness, many supply chain organizations are looking toward teamwork and collaboration, both internally and with external partners. They see the potential payoff of employees working together and sharing mutually beneficial information with other internal groups and with supply chain partners. Collaboration frequently comes up as a top priority, in the supply chain and beyond. However, collaboration is not something that organizations can simply adopt and be done with. A well-planned collaboration effort must be strategic and it takes work to adopt and sustain.
APQC’s research emphasizes the need for organizations to develop a culture of teamwork and collaboration before expanding the effort to include partners. For supply chain, this is particularly important as maintaining mutually beneficial relationships ensure processes are not interrupted. To create a culture of collaboration, supply chain organizations should identify the types of skills needed and clearly communicate to employees that team-focused and collaborative behaviors are a priority. They must also make collaboration part of every day tasks and ensure that collaborative behaviors are shown to be important by leadership. Once collaboration is firmly entrenched in the culture, an organization is well positioned to have successful collaborative relationships with suppliers and other business partners.
Employee skills support collaboration
In recent APQC research on employee skillsets needed for the future in the procurement field, survey respondents noted the top 10 skills needed. As shown in Figure 1, an overwhelming majority were soft skills such as communication, relationship building and being a team player—skills integral to collaboration.
Interestingly, the top skill noted by respondents was business ethics, which points to the need for supply chain employees to be “community-minded” rather than focused on personal benefit. A recent Texas A&M University study on ethics in supply chain emphasizes this point. Participants were given a scenario in which they were the director of supply management at an organization needing to save money when selecting a supplier. In the scenario, they were faced with a situation in which a highly motivated potential supplier asked for information from sealed bids provided by other potential suppliers so that it could ultimately provide the lowest bid and win the contract.
Study participants were then asked to choose a course of action, with each option following ethical guidelines to varying degrees. Although responses varied based on factors such as gender and country of residence, overall the participants were more likely to follow ethical guidelines when consequences for their actions grew more severe than for others. For example, respondents were more likely to behave ethically when faced with the possibility that hiring a dishonest supplier would double the rate of product failure.
Organizational culture can be a strong influence on employees’ ethical behavior. In another study by Texas A&M, individuals repeatedly exposed to ethics training by their employers exhibited more ethical behavior. By emphasizing ethics to employees through exercises, videos and discussions, organizations can make valuing the greater good a central part of their culture.
Top down support
For an organization’s culture to emphasize collaboration, it must be deemed important by senior leadership. That support can be hard to come by. An APQC study on collaboration and knowledge sharing revealed that senior leaders are some of the hardest employees to engage in these behaviors (see Figure 2). Conversely, newcomers to an organization and junior employees are some of the easiest to engage.
As with most new initiatives, whether or not they are in leadership, employees need convincing that their efforts are worthwhile. Leadership must be made aware of how teamwork and collaboration can lead to benefits within the business, as well as how collaboration with external partners can lead to further benefits. Leaders can become engaged in collaboration efforts by having a say in the focus of these efforts. Organizations can create steering committees that include members of leadership. Those committees can then take ownership of the organization’s collaboration effort.
To ensure a successful effort, leadership should also make sure that measures across the organization are aligned. At its core, internal collaboration involves cooperation among departments. If measures among departments are not aligned, or if they create competition among groups, employees will not be motivated to work with other groups. Leadership needs to be united in communicating the importance of collaboration. Mixed messages from management can thwart efforts to have employees collaborate with those of other groups.
To further emphasize collaboration and sharing knowledge, organizations can align employee performance evaluations and goal setting with their collaboration efforts. As shown in Figure 3, about half of organizations require employee participation in knowledge sharing as part of a specific business process. Nearly the same amount include participation measures as part of individual performance goals.
Fewer organizations mandate employee participation as part of company policies or tie participation to requirements for promotions and new opportunities. Organizations seem to be on the right track by making collaboration and sharing relevant to employees by tying it to their work flow versus making collaboration something outside or above their work flow. This gives employees a clear indicator of what effective collaboration looks like.
Collaboration structure for employees
To maximize employee collaboration and knowledge sharing, supply chain organizations must create structure around these efforts. Two primary areas of focus should be employee time and ease of use. APQC recommends that organizations set aside time for all employees to collaborate and create new knowledge; they should also encourage employees who are new to the company to share their experiences and lessons learned from previous jobs. As part of this, supply chain organizations should regularly communicate to employees how sharing knowledge benefits the entire company.
From a technical standpoint, organizations should also identify which platforms they will use to share information and provide employees with examples of when to use each. To ensure that conversations not tied to work do not overtake collaboration platforms, organizations should clearly communicate to employees where non-work conversations should occur. Most importantly, organizations must closely work with IT teams to ensure that collaboration platforms are easy for employees to use and integrate into their regular workflows. Platforms that do not meet these criteria will quickly be abandoned by employees.
A key factor in encouraging supply chain employees to use collaboration platforms is to establish employee trust of the information. Organizations can ensure this by identifying and designating employees within the organization to act as subject matter experts. These employees would have enough experience and expertise within certain areas that they could review and approve information submitted by employees. Subject matter experts can also answer questions posed by other employees so that accurate information is disseminated throughout the organization. Within the collaboration platform, organizations should ensure that vetted information is clearly marked so that employees can be assured that it is both reviewed and approved.
Collaboration in practice
Intel is a company that has put collaboration into practice. The technology leader has a clear process for knowledge sharing incorporated into its product development and project management process. Through regular events called retrospectives, employees reflect on how well completed phases of a particular project worked, with an eye towards documenting areas for improvement. During these formal events, project staff share their perspectives on what worked so that the current team and other project teams can reinforce those actions in subsequent projects. They also share information on what did not work and make recommendations on what can be done differently. All findings are documented and stored in a central repository so that employees can easily reference and implement practices that work well. Intel’s process includes a step to ensure reuse of the information that is captured.
Supply chain organizations can learn from the successes of Intel’s retrospectives and continuous improvement. Although implemented in formal projects, retrospectives do not need to be tied to such a formal structure, although the format of the retrospectives themselves should be structured to ensure efficient identification of what worked and what did not, as well as efficient documentation and dissemination of findings.
APQC spoke with another organization that focuses on developing employee skills and capabilities as a way of furthering collaboration in the supply chain. In this organization, the procurement group is responsible for a variety of tasks, which makes it challenging to find staff members who can do every step well. Instead, the organization focuses on hiring employees with certain qualities—desire, natural curiosity and passion for the procurement profession—with the idea that more tactical or technical skills—such as analytics, negotiation and contract review—can be developed in employees over time.
The organization’s head of procurement believes that hiring staff members with desired soft skills benefits the company overall because of their desire to improve themselves and the way the organization operates to get the best outcomes. To his employees, he says: “’You need to look out for yourself, but not at the expense of the others.’ If you do that, even if you’re the best procurement guy on the planet, I don’t want you on my team.” As an extension of this, employees recognize that collaboration and partnership play large roles in achieving the desired outcomes. The head of procurement regularly conveys to organizational leadership the benefit provided by the procurement group and the strategic value of collaboration.
Start from the ground up
For collaboration efforts within the supply chain to succeed, organizations must develop a culture that promotes collaboration. Creating the culture requires work, including deliberate choices about how and when employees will collaborate. It also involves selecting employees who are more inclined to seek improvement of their own skills as well as the development of relationships with others to create win-win situations. Further, employees should ideally have a team perspective that allows them to make ethical decisions that benefit the greater good.
Adjusting business goals, processes and IT structures to encourage collaboration is a key step to building an internal culture that supports collaboration. This not only communicates to employees that collaboration is a priority, but also makes it easy for them to incorporate it into their normal workflow. With a culture and structure in place that supports collaboration, organizations can then extend their efforts to their relationships with key suppliers and business partners, leading to results that benefit all involved.
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