Growing together (part 2)

10th September 2019 |   Phil Styrlund and James Robertson

Following up on our previous article in last issue of IJST, we continue the discussion on how to best work with your strategic customers to help create joint solutions for growth.

What do the best do differently to create joint solutions? Leading companies that excel at collaboratively creating value with their customers are not trying to do a thousand things well. With clear purpose, and through deliberate practice, they focus on developing the critical capabilities that enable an iterative, flexible process, agile execution, and continuous learning.

While there is no universal template or guaranteed recipe for success, based on the Summit Group’s research, benchmarking, and our work with some of the world’s top companies, we’ve distilled what the best do differently to the ten “greatest hits” – or distinctive capabilities – aligned with, and enabling, the collaborative value creation framework (see Figure 1).

Insight and business alignment:

1. Engage and envision with “lighthouse” customers.
2. Proactive insights, and absolute clarity on what matters most.
3. Bold collaboration and joint planning for “Vision to Value” roadmap.
4. Expand relationships: higher, wider, deeper, proactive dialogue.ⁱ
5. Prioritize mutual opportunities.

Create joint solutions:

6. Leverage enterprise capabilities – beyond the product.
7. “Mirror” how the customer wants to do business – forming joint action teams.

Communicate value and drive execution:

8. Ensure relevance and elevate the customer’s value proposition. Test concepts early, and fail fast and at the lowest cost.
9. Demonstrably grow the financials and articulate differentiating value.
10. Joint scorecard. Align incentives. Measure and communicate results. Learn and adjust, adjust, adjust.

These “next practices” enable leading companies to discover, understand, and validate the customer’s key value drivers – a deep understanding of which maximizes the potential for co-creating value, ensures efficient resource allocation, elevates relationships, differentiates how you show up, and counters competition. An underlying and recurring theme in every successful value co-creation initiative we’ve been privileged to be a part of over the past 26 years is “trust-based collaboration”. What can we learn from this insight?

When deciding whom to collaborate with, leading companies go beyond traditional criteria to assess prospects for strategic business partnerships,ⁱⁱ and look closely at the attributes and behaviours of low, or highly collaborative organizations. Along with the openness to innovate, and being seen as a reference in the industry, these indicators of trustbased collaboration guide us to engage with customers with whom we are most likely to succeed, and avoid the pain, costs, and ramifications of failed attempts and, potentially damaged relationships.

Trust is earned and based on the one party’s confidence in the other’s capability, transparency, and commitment to consistently deliver and do what they say.ⁱⁱⁱ

Figure 2 contrasts attributes we’ve observed that indicate an organization’s capacity to build and sustain trust-based collaborative relationships, or not. Those organizations demonstrating the least collaborative behaviors may be good customers, but they may not be the best candidates for cocreating solutions.

A framework and operating system for creating joint solutions

In this section, we bring you the “how” – a pragmatic, proven operating framework, principles, and tools for creating joint solutions with your strategic customers.

There’s no “silver bullet” or prescriptive process that gets you from a to z. Rather the iterative, agile application of a structured, yet flexible approach that provides freedom in a framework has proven to enable effective execution and to accelerate results. This proposed value co-creation approach is validated in real-world application and based on the experience of leading companies across industries. Theory does not pay the bills.

The operating framework (Figure 3) we propose for creating joint solutions has three phases:

1. Accelerate insight and business alignment
2. Create joint solutions
3. Communicate value and drive execution.

In the complex business-to-business environment of strategic account management, where no two co-creation opportunities are likely to follow the same path, a prescriptive, robotic, linear process will not accommodate the variability, adaptation, and creativity required for success. Rather the creating joint solutions framework provides structure to our thinking, secures focus on what matters most, stimulates creativity, and guides our iterative action towards the outcomes we seek – allowing for the dexterity, agility, and flexibility required to navigate the multifaceted dynamics of two (or more) organizations seeking to collaboratively co-create value.

Companies adapt and integrate this framework into their organization’s culture and way-of-working, to differentiate how they engage and drive growth with their customers. The collaborative co-creation journey becomes an important part of their overall value proposition, creating an exceptional customer experience, and vital to competitiveness.

Let’s walk through each phase to understand what works: the mindset, skill set, as well as the core principles and tools required to create joint solutions with strategic customers.

Tip: It’s hard to move forward if either company believes the other has not earned the right to collaborate in creating joint solutions. Build credibility and ensure the essentials of your business are running well – “be brilliant in the basics” to ensure that there are no lurking transactional, quality, or supply-chain issues getting in the way.

Tip: The more you can see, the more, potentially, you can bring. Successful value creation requires a new mindset that enables collaborators to see things differently, for example through the lens of the customer’s customer, and to avoid “product glaucoma” by expanding the aperture for discovery beyond the product and past the immediate, current scope of business.

Phase 01: Accelerate insight and business alignment

In this phase (Figure 4) the company and customer:

• Establish mutual intent and guiding principles^iv to collaborate, beyond the transactional relationship, in the discovery and evaluation of opportunities to create new sources of value.
• Accelerate and deepen insights in to their value-chain drivers – thinking outside-in, and looking beyond the product/service to identify major Careabouts^TM (issues, opportunities, unmet needs, and pain points impacting their business ecosystem), and avoid “product glaucoma”.
• Listen louder to the voice of the customer’s customer.^v
• Engage in dialogue with relevant stakeholders beyond traditional contact points to extend and validate insights.
• Mutually prioritize what matters most – aligning on opportunities and initiatives that are likely to have the greatest impact on end-user value, and on each organization’s business, considering feasibility and competitive differentiation.

At the outcome of this phase, both organizations have identified big CareaboutsTM and prioritized joint opportunities to co-create mutual value. During this phase, leading practitioners reorder their thinking: starting with their customer’s customer to understand why they select one product, service, or solution over another – and to determine what they seek and care about most.

We hope this overview of the framework helps provide some guidance as you work with your own strategic customers in helping them to grow their businesses.

i Etymology of dialogue is defined as “a discussion between two or more people or groups, especially one directed toward exploration of a particular subject or resolution of a problem”. Source: http://www.oxforddictionaries.com/us/definition/american_english/dialogue.
ii Reference ASAP – Association of Strategic Alliance Partnerships.
iii Suggested reading: The Speed of Trust, Stephen Covey; The Trust Edge, David Horsager.
iv May also be referred to as “rules of engagement”, charter, or “intent to collaborate”.

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