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Queen's University IRC

    December 2012     

   Building Trust in Business Partnerships

    Jim Harrison and Gary T. Furlong, 2012

  Building Trust

 

If you ask anyone to name the most important elements of any long-term, satisfying relationship, trust is usually near the top of any list. This is certainly true for personal relationships, but it is also true for business relationships.

The ability to quickly establish and build trust is becoming even more important in today’s business environment, where partnerships and strategic alliances are common practice. Companies and organizations are strategically focusing more and more on their core competencies and high value activities. They are looking to partners - both external and internal - to contribute added value through complementary services, products, and expertise. Adding value from partners allows companies, business units, and specific departments to innovate and to differentiate themselves from their competitors. And the foundation of these successful partnerships is trust. In this article, we outline a method through which trust can be formed quickly and proactively, and sustained over time.

External and Internal Partnerships

So, first, what do we mean by "partnerships." They are everywhere - in your organization and ours - even though we don’t sometimes think of them as such. The obvious partnering initiatives include public joint ventures between two companies, mergers and acquisitions, construction projects involving multiple owners, architects, contractors, suppliers and trades, and distribution models that allow greater product and service reach through a broader set of distributors or resellers. These are partnerships with highly visible external partners. But there are other, less visible, external partnerships as well. These include relationships with suppliers, with legal or auditing counsel, with training companies or with IT experts. In the most successful organizations, these traditional buyer-supplier relationships are being run not as price-driven, pain-filled, win-lose procurement exercises, but rather as trust-based, win-win partnering relationships. This focus on partnership and trust is driven by the increasing need for speed, innovation, shared knowledge and investment on behalf of both parties, necessities in today’s market place if organizations are going to survive and flourish.

The same paradigm applies to "internal" partnerships as well. Closer and more flexible relationships are demanded by business units or government agencies in their relationships with all internal departments - with HR for faster, more relevant recruiting practices; with Finance for better predictive analysis and timely decision making data, and with IT for faster, value-added technologies, streamlined security, and implementation practices. Internal departments need to support each other to add value and to respond to the urgency placed on them by demanding consumers and a faster, dynamic marketplace. This is true in business; it is true in government; it is true in any organization that needs to do more with less to compete and survive.

Defining Trust

Participants in workshops and seminars we run universally agree: a foundation of trust makes both external and internal partnerships stronger and increases the chance of success. So we ask them: How important is trust? Very important. How long does it take to build trust? A long time. How long does it take to break trust? A single moment. The answers are uniform and - in a positive way - predictable. Then we ask: What is the definition of trust? You would think this would be an easy question to answer, given the importance of trust. But here the answers vary: honesty, integrity, doing what you say, starting what you finish, being trustworthy, being someone I can count on - all good answers, and all certainly capturing an element of trust, but still not nailing it down to a clear, working definition that points to a sustainable course of action. Then we ask: What do you do if you need to build trust quickly and sustain it over a long period of time? The answers tail off to silence. So two key questions: What is trust? How do we quickly establish trust? Yet, no clear answers. However, everyone agrees that when a partnership is formed, it must be formed in a way that establishes trust as rapidly as possible.

A Working Definition of Trust

So what is trust? We have developed a working definition that can be applied anywhere:

"Trust is the level of positive expectation we have of another person, when in a situation of risk."

Risk is the key element that drives almost everything related to trust. All relationships possess some degree of risk. This is true in our personal lives; if anything, it is even more acute in our business relationships, particularly in circumstances where we are critically dependent on partners - both external and interna - in order to succeed. The relationship between risk and trust is symbiotic; if risk is high, it challenges or diminishes my sense of trust with you. If I already trust you, I am willing to work faster and take greater risks.

To add even more complexity, in business partnerships we need trust to exist between individuals, as well as between entire departments or organizations. Often, we need it to be established very fast and sustained through numerous interactions and constant change. How do we achieve speed and sustainability? To understand how to do this, we need to break down trust into two distinct elements.

Two Kinds of Trust

When we commonly think of trust, we are thinking of the interpersonal relationship between two individuals. We call this personal trust. This is our willingness to trust an individual with whom we are working. It is the trust we think of that builds over time. For example, I assess your honesty, your integrity; I watch as you promise something and then you deliver (or not), and I gauge your intentions, your willingness to go the extra mile to help me or the team. From these experiences, my willingness to trust you either grows or erodes.

This trust is critical to the strength of our relationship and how willing I am to take on more - or less - risk in concert with you as an individual.

The problem with personal trust is that, while we desperately need it, we can’t build it proactively. We can’t make it happen just because we want it. It evolves situationally and slowly; but to be frank, in most current business environments, we don’t have the time to allow that to happen at a leisurely pace.

There is a second form of trust that we can focus on in the early stages of a relationship, one that we can move on proactively and quickly, and from which we can build a foundation of sustainable trust. This second form of trust we call procedural trust. It is where both parties initially place their trust in an agreed structure or a clear procedure that they execute together. It is the ability to create transparent, consistent, and verifiable steps - with clear checks and balances - that allow us to create the long-term, sustainable foundation upon which organizational trust and, eventually, personal trust can be built.

Procedural trust has evolved from the practice of procedural justice, in which defendants were given a defined process to have their story and facts clearly heard before a judgment would be passed. This concept has now been built into a broad range of societal structures, human resources practices, and project management disciplines. Procedural trust is grounded in the concept that if we have a clearly defined process in which we initially place our trust - we trust the process, not the individual - then trust can be quickly established.

From procedural trust - the trust in the process - personal trust can be established and the process can be extended to build upon that initial trust and sustain it into the future. The key benefit to establishing procedural trust is that it can, unlike personal trust, be done proactively, with a plan developed by and agreed on by both parties.

Building Trust in Partnering Relationships

When establishing, or in some cases repairing, business partnerships between internal or external partners, there is a clear process that can be agreed on at the start of the relationship that will align the objectives of the partnership, identify challenges and risks, and establish the ongoing processes that will build and sustain long-term trust.

The process to establish trust between business partners follows four clear steps:

  1. Alignment of Objectives and Interests
    In this critical first step, the objectives of the relationship and partnership are agreed between the senior leadership of the two parties.
     
  2. Identification of Issues and Challenges
    Once the objectives are aligned, the two parties identify all of the challenges, issues, and risks that they think or imagine will arise within the relationship. These issues are prioritized, assigned owners by the parties, and solved accordingly. The key here is that everyone’s issues are heard and addressed, in the calm of an adult discussion between senior leaders, not in the heat of a deadline on a loading dock or construction site between employees without sufficient information, resources, or decision making authority.
     
  3. Issue Resolution and Decision Making
    Ground rules, or working principles on how the group will interact, are then agreed upon, including how decisions or problems will be escalated. By defining and agreeing on a clear process for escalating and resolving difficult issues, trust grows in the partnership’s ability to work effectively together. This allows the partnering process to sustain trust and build a strong, long-term relationship.
     
  4. Regular Review of the Relationship
    As a final step in the partnering process, the parties establish a regular schedule to come back together to review the relationship, to recalibrate objectives and resources, to publically celebrate successes, and to ensure that trust is continually and consciously strengthened and sustained.
     

The partnering process is frequently used at the start of a new relationship - an outsourcing agreement, a merger, a construction project, or a joint venture product development. It can also be used to repair relationships that have gone off the rails. In these cases, while we can’t change history, we can start to write a new history from today, a chance to clean the slate and build a future of strong and sustainable trust.

In all businesses and public organizations, we are being asked to do more with less, to move faster to create and deliver value, and to work with a broader, more complex range of challenges, opportunities, issues, and partners. Organizations and individuals that are skilled at quickly and proactively building and sustaining trust will be a competitive step ahead of the market in meeting these challenges.

 

About the Authors

     

Jim Harrison

 

     

Jim Harrison

 

Jim Harrison
Jim Harrison is an international consultant focused on relationship management, senior level strategy, and business development skills for large organizations. He has a background in financial services and professional writing, and has more than 18 years experience in consulting, training, and development. He teaches in North America, Europe, the U.K., Australia, and Asia, and has facilitated training programs for Manulife, Clarica, Deutsche Bank, HSBC, and Bank of Nova Scotia. He designed and delivered a sales and negotiating program for Group Insurance Representatives that supported significant increases in business for a major group life insurance supplier.

In recent years, Jim has focused predominantly on helping senior sales executives understand, plan for, and build trusted advisor relationships with senior business executives. There are specific requirements of building relationships in the "C-Suite" and Jim has chosen to refine his knowledge in helping others to succeed in this realm.

Through his continuing work with Accenture, Agfa, Deutsche Bank, and IBM, Jim has developed the expertise and focused tools to help account teams land large dollar contracts and to build meaningful long-term relationships. Jim has also helped structure and deliver strategic partnering workshops with long-term clients.

Jim received his B.Sc. in Finance from Florida State University and Masters Degree in English from University of California, Irvine. In addition, Jim has won the Canadian Junior Golf Championship and the Ontario Amateur Golf Championship.

 

     

Laura Karabulut

 

     

Gary Furlong

 

Gary Furlong
Gary Furlong has extensive experience in mediation, mediation training, alternative dispute resolution, organizational facilitation, negotiation, and conflict resolution. Gary is past president of the ADR Institute of Ontario, is a Chartered Mediator (C. Med.) and holds his Master of Laws (ADR) from Osgoode Hall Law School. Gary is the author of The Conflict Resolution Toolbox, (John Wiley and Sons, 2005), and the co-author of The Construction Dispute Resolution Handbook, (Butterworths, 2004). Gary was awarded the McGowan Award of Excellence in ADR in 2005.

As a mediator, Gary has worked in the areas of commercial, personal injury, estates, construction, shareholder, insurance, wrongful dismissal, real estate, and workplace conflicts, and specializes in intervening in difficult organizational and workplace disputes. Gary was regularly called in to the court-annexed ADR Centre in Toronto for the first three years, and is now appointed a roster mediator, Ontario Mandatory Mediation Program, Toronto. Gary has mediated personal injury, insurance and long-term disability claims ranging from $30,000 to over $1 million dollars. Estates files include multi-party claims ranging in size from $200,000 to well over a million dollars. Contract and tort claim files have ranged from $10,000 to $2 million dollars. Gary was a regular mediator and fact-finder with the Education Relations Commission, and was also appointed a provincial facilitator and mediator with the Education Improvement Commission, assisting with the financial reorganization and amalgamation of school boards in Ontario. Gary has also been on the Law Society of Upper Canada's complaint mediation panel, and the Teachers College of Ontario mediation panel. Gary has conducted fact-finding and investigations for the past 6 years.

Gary has delivered ADR and conflict management training for judges from across the country through the National Judicial Institute, and for hundreds of lawyers through the Law Society of Upper Canada and law firms such as Gowlings, and Sims, Clement, Eastwood. In addition, Gary has trained RCMP officers, firefighters, and hundreds of front-line managers and employees for companies like Purolator Courier and Transport Canada, over 1000 by-law enforcement officers with most of the cities in the GTA, as well as numerous departments of the federal government, provincial government, and many municipalities. Gary has worked with the Queen's University Industrial Relations Department conducting research into employment models of dispute resolution in Canadian companies, and teaches Negotiation Skills at the Queen's University Industrial Relations Centre (IRC). Gary also spent 6 years as an organizational development consultant to both large and small corporations in Canada and the U.K.

Gary is a partnering facilitator to the construction industry, and has pioneered the use of partnering in unique organizational settings. Gary has mediated a number of construction matters, both construction design and contract issues, along with construction lien disputes. Gary has facilitated conflict systems design projects for numerous clients, including the Royal Bank of Canada. Gary is a principal with Agree Dispute Resolution, and is a graduate of Stanford University in California. He is distinguished fellow, International Academy of Mediators (IAM) and an Ontario Bar Association ADR Section past member - executive.

 

If you want to understand how Relationship Partnering can assist your organization, simply call Agree and provide the particulars by phone.

 
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