Crisis: An Opportunity for Collaboration?

Uncategorized May 10, 2020

‘The Chinese use two brush strokes to write the word ‘Crisis’. One brush stroke stands for danger; the other of opportunity. In a crisis, beware of the danger: but recognise the opportunity.’

John F. Kennedy [1] 

This quote from a pre-campaign speech by Senator John Kennedy whilst widely recognised today as an incorrect interpretation of the Chinese characters is nonetheless as pertinent a metaphor to our time of Covid-19 crisis as it was sixty-one years ago in 1959.

Crises are not a prerequisite for innovation or positive change but as Kennedy challenged his audience that day in 1959, they are an opportunity for Leaders to grasp the moment and present to people a compelling vision that will change mindsets.

Changing mindset is challenging, for humans’ will process the same situation in different ways. Primarily, these fall into two categories: those that are positive or those that are negative.

Unfortunately, it appears that in the current Covid 19 crisis too many business leaders have fallen into the latter category by reverting to natural human loss aversion behaviours that are negative in nature through the raising of disputes with suppliers and their taking to the fine print in contract clauses.

The beliefs behind this loss aversion and adversarial behaviour are those of the ‘win-lose’ mindset – a short-sighted approach that invariably leads to conflict and non-value activities that generate further costs. Ultimately, the outcome is a further crisis of ‘lose-lose’ where no parties benefit and crucially, relationships are broken.

The alternative on the other hand, and the key ‘opportunity’ in this crisis (as well as look to avoid a further crisis), is based in ‘win-win’ beliefs where the challenges created by the crisis can be best solved not by conflict but by people choosing to collaborate together.

A collaborative approach would not only work in jointly problem-solving issues between parties but also as well as avoiding disputes. More significantly this would be the foundations of building effective and efficient ways of working in the future around shared, not singular, benefits.

The ‘opportunity’ here sounds simple, and indeed is logical, but regrettably the human aversion to loss and survival is far more powerful than our desire to gain, for this requires many leaders to change their mindsets; the existing, and often limiting, beliefs that fit their pre-existing views through which the door to bias opens.

Biases lead to perceptual distortions, inaccurate judgements, illogical interpretations, and irrationality. For example, past experiences between businesses or across a sector can lead to ‘Confirmation Bias’ by one party or more through their interpreting, focusing upon, or remembering information in a way that supports their beliefs and biases that totally undermines the potential for collaboration.

The outcome is that of low trust, or even one of mistrust, where relationships exists purely in ‘transactional trust’; trust only in the contract and the terms and clauses therein. When things go wrong it is around these terms and clauses that people take positions.

The ‘opportunity’ is to look to establish collaborative relationships. Here the contract that exists is put aside in the interest of mutual, not singular, benefit with all of the parties aiming to mutually benefit through the building, and maintenance, of ‘relationship trust’; a trust that now exists in and between the people, not the contract.

The prize here is the potential for low margin contracting and supply chains where the adversarial relationships of the past are eradicated. This requires bold Leaders with firm beliefs about ‘win-win’ relationships who look to build collaborative working and a ‘new world’ where high quality relationships leads to preferred ‘partner’ status where relationships are more important to success than low-cost tendering .

The evidence to support that collaborative contracting is proving to be more effective is growing. In terms of performance those adopting a developed collaborative approach show an average improvement average of 15% – but importantly they are more productive by up to 8-9%, show cost savings of 7-10%; and crucially bottom line profit margin percentiles increasing.[2]

The problem with ‘opportunity’ of any human nature and collaboration is no different,  is that it requires substantive change, patience, and discipline by everyone involved in changing what they believe and in whom they trust.

Humans can change their beliefs and trust can be built, or even rebuilt, but this takes commitment, time, discipline, and patience. Unfortunately, this is not understood or practiced with only the slightest blip sending any collaborative venture quickly into reverse through bias re-emerging.  

For example, some data, information, or a problem arises that strengthens a person’s prior beliefs that quickly questions trust and promotes past adversarial behaviours that singly or jointly undermine collaboration. This is not known as the ‘Backfire Effect’ for nothing and is an immediate collaboration killer and too often the reason many collaborative ‘opportunities’ in the past have failed.

Recognising the importance of trust, beliefs, and bias is one thing but acting decisively through bold Leadership is vital if the ‘opportunity’ for collaboration is to move forward from talk to reality.

 


[1] Papers of John K Kennedy: Pre-Presidential Papers. Senate Files, Series 12: Speeches and the Press, Box 902. Folder: ‘United Negro College Fund, Indianapolis, Indiana, 12th April, 1959.’

[2] McKinsey & Company (2020) Collaborative Contracting: Moving from Pilot to Scale-up’

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