Helping Companies Collaborate

Denis Kearney

13th October 2005

Istanbul

Topics CoveredTopics Covered

• Overview of SMEexcel projectOverview of SMEexcel project

• Survey of user needsSurvey of user needs

• Assessing Organisational Readiness – Assessing Organisational Readiness – the Synergy / Maturity modelthe Synergy / Maturity model

• Collaborative ProcessCollaborative Process

• Next StepsNext Steps

• SummarySummary

What is SMEexcel?What is SMEexcel?

ProblemProblem

How to encourage How to encourage SMESMEss to embrace to embrace

collaboration as a key collaboration as a key tool for tool for

competitivenesscompetitiveness

Review Organisation Goals

Identify Strategic Assets

Develop Individual Competencies

Learn ‘How to Collaborate’

Develop Group Competencies

Manage Collaboration

Implement Business Processes

Sustain the Partnership

Identify Opportunities

Seek out RFQs

Deliver Order-winning Proposals

Manage Customer Expectations

Within the

Network

In theMarketplace

Within Each

CompanyNew Business New Business

Through Through CollaborationCollaboration

SMEexcel ConceptSMEexcel Concept

ExampleExample

Organisation Relationships

Interacts with

Goes to

Prepares / agreesSupport delivery of

Implements, complies with & uses

VECollaboration NetworkNetworkProductor serviceProduct

or service

......

StandardsStandards

ICT platformICT platform

ProceduresProcedures

Enterprise(legal entity)Enterprise

(legal entity)

CustomerCustomer

Participates inLeadsInitiates

Coordinates

co-delivery of

Shares,

collaborates using

PartnershipPartnership

Dissemination Manager

CME

Development Manager

CSM

Validation ManagerTusiad

Research Manager

SNS

Pilot TestingSmiths

Localisation Manager

IMIK/OTI

Exploitation / Accreditation

NITL

SME User GroupElectronics Scotland

SME User GroupPolish Welding Chamber

SME User GroupBEYSA

SME User GroupsSNS / Tsunami

Catalyst Enterprise Ireland

Catalyst Society for Strategic Management, Innovation and Entrepreneurship

Catalyst Shannon Development

Pilot TestingLitho

Pilot TestingSercom

Pilot TestingFarel

Pilot TestingMotgum

Catalyst Scottish Enterprise

Project Manager

SNS

Dissemination Focus

ITI

Survey of User NeedsSurvey of User Needs

SMEexcel SurveySMEexcel Survey

• Carried out over 5 countries – Carried out over 5 countries – Ireland, Scotland, Poland, Turkey and Ireland, Scotland, Poland, Turkey and the Czech Republicthe Czech Republic

• Follow up Focus Expert Group Follow up Focus Expert Group assessment in Irelandassessment in Ireland

How Important are Networks to How Important are Networks to you?you?

Importance of Networks

50%

23%

14%10%

3%

0%

10%

20%

30%

40%

50%

60%

Peer Collaboration Formal Cluster Supply ChainNetwork

Industry Network Chamber ofCommerce

25% 65%

Survey Findings –Survey Findings –What makes you more What makes you more

CompetitiveCompetitive

Importance to Competitiveness

21%

19%

13%

14%

11%

9%

7%5%

Delivery Reliability & Customer Service

Cost reduction

Increasing Product Quality

Operational Performance

Reducing Time To Market (TTM)

More Product Innovation

Improving Serviceability & Field Support

Styling, Design, Image & Branding

Barriers to SuccessBarriers to Success

Barriers to Success

17%

14%

11%

10%10%

8%

8%

7%

5%

5%5%

Not enough customers

Margins too tight

Not enough new products coming on stream

Shortage of Capital

Shrinking or Stagnating Markets

Lack of suitable partners for collaboration

Lack of formal strategic plan

Cannot support a broader customer base

Shortage of Skills

Shortage of Technology

Lack of Infrastructure[1]

Why would you collaborate?Why would you collaborate?

Why Collaborate?

22%

15%

13%12%

12%

11%

8%8%

Access New Markets

Improve overall capability bycombining competencies

Critical Mass to qualify for largecustomers

Benchmark / learn from partners

Access Technology

Network with Peers

Avoid Internal investment

Share development costs

What do you want from others?What do you want from others?

Desirable Complimentary Competencies

17%

12%

10%

10%10%

9%

9%

9%

9%6%

Market Knowledge / Sales Force

Management of Collaboration

Access to Finance

Systems – IT skills

Critical Technologies

Research, Design and Development(products or processes)

Logistics Management / FieldSupport

Efficient Production Capacity

Critical Skills

Summary of Survey FindingsSummary of Survey Findings

• Marketing and particularly Sales, are the priority of most Marketing and particularly Sales, are the priority of most SMEsSMEs

• ““What’s in it for me?” – must see early returnWhat’s in it for me?” – must see early return• ““Show me where it was done”Show me where it was done”

• Collaboration is important for companies that want to growCollaboration is important for companies that want to grow• Prefer Market Pull rather than Network PushPrefer Market Pull rather than Network Push• Trust and IP are important issuesTrust and IP are important issues

• SMEs tend not to strategise, particularly in the marketing SMEs tend not to strategise, particularly in the marketing arenaarena

• Individual skills training not a priority. Business Capability Individual skills training not a priority. Business Capability skills for the organisation areskills for the organisation are

• The jargon is a turn-off – keep it simpleThe jargon is a turn-off – keep it simple

Are you Ready to Are you Ready to Collaborate?Collaborate?

Synergy Model – Maturity ScaleSynergy Model – Maturity Scale

Optimising (5) Fully competent and able to

demonstrate leadership

Standardised (4) Well understood. Good

competency and application

Defined (3) Some understanding. Basic

capability to apply

Embryonic (2) Basic Understanding of

requirements Not able to apply

Initial (1) Unpredictable or Does not

exist

CommercialSynergy

StrategicSynergy

CulturalSynergy

Operational Synergy

Maturity AssessmentMaturity Assessment Maturity Level

Synergy Level 1

Initial Level 2

Embryonic Level 3 Defined

Level 4 Standardised

Level 5 Optimised

Strategic No strategic awareness Informal strategy generally internal to the Owner / Manager

Limited visibility within organisation

Documented strategy Communicated throughout

organisation

Strategy document derived from rigorous and multi-level debate within and external to the organisation

Strong ownership throughout the organisation for implementation

Impacted by collaborative partners

Operational Short term planning Heroic efforts to deliver

results No or ad-hoc

measurements Unpredictable delivery

performance

Basic operational management systems in place

Rudimentary tracking Documented

procedures

Strong process & project management

Integration and prioritisation among projects / initiatives

Clearly defined internal business processes

Continuous operational improvement in terms of cost, quality and time

Highly predictable Strong skills base

Cultural Hero culture Employees seen as inter-

changeable production units

Top-down decision making No or poor-performing

teams

Some team activity Strong personnel

management systems Some level of trust Top-down

communications

Functional teams responsible for operational and improvement targets

Good communications Good level of trust

Employees viewed as assets

Decision-making devolved to the most appropriate level

Cross-functional team work Self-driven employees Pervasive trust

Commercial Defensive regarding quality of assets

No appreciation of risk management

No knowledge of how to protect intellectual property

Poor access to finance

Some understanding of value of assets

Understands risk management

Interested in IP Reasonable financial

position

Understands clearly the value of core assets and competencies

Structured risk management approach

Structured IP management Good financial position

In addition, appreciates fully the overall value of the combined partner assets

Demonstrated leadership

Systematic continuous improvement

Driven by breakthrough goals and identification / development of new business opportunities

Crawl before you Walk!Crawl before you Walk! Maturity Level

Level 1 Initial

Level 2 Embryonic

Level 3 Defined

Level 4 Standardised

Level 5 Optimised

Collaborator Features

Unreliable as a collaborative partner

May be unable to fulfil commitments

Use only as a sub-contractor

Collaborative follower

Requires strong direction and management

Control systems must be rigid

Characterised by strengths in one or two areas

Collaborative partner Responsible for own activities

and controls Contributes substantial

benefits to partnership Characterised by substantial

key competencies

Collaborative leader Drives overall

development of collaboration

Develops key competencies

Collaborative leader and ground-breaker

Failure Low-level collaboration – needs tight control

One-off informal cooperation

Experienced collaborators working on ‘bet the company’ projects with like-minded organisations

Optimised collaborative ventures focused on breakthrough results for the overall partnership

Collaboration Features

Highly optimised collaborative ventures focused on breakthrough results for both the partnership and each partner

Building on prior learning, these organisations continuously develop new methods for collaborating which deliver a competitive return.

The SMEexcel Collaborative The SMEexcel Collaborative ProcessProcess

The Collaboration Process

IDENTIFICATION

FORMATION

IMPLEMENTATION

EVALUATION

Gate 2

Gate 3

Gate 4

Gate 5

ATTRACTION

Gate 1

Company A Company B Company C

Interested inCollaboration

Driver for Collaboration(Market opportunity,Product Opportunity,

etc.)

Sort out basicConsortium

Building Issues

DetermineIndividual

Competencies andNeeds

Determine OverallCompetencies and

Gap

OtherCompetencies

Needed?

Source additionalCompanies

Integrate NewMembers (ifnecessary)

Set up Structureand Responsibilities

Set up BusinessPlan,

Targets/Metrics,Information Systems

Set up ManagementSystems

Manage the CollaborativeProject

Repeat

Audit the Process

Review Performance andAdjust as necessary

Y

N

Y

N

Elements of AttractionElements of Attraction

Awareness

Cost Benefit Analysis

Case Studies

Checklist for AttractionChecklist for Attraction• Do you understand the potential benefits of Do you understand the potential benefits of

collaboration to your organisationcollaboration to your organisation• Do you understand the commitments that have to be Do you understand the commitments that have to be

made and the costs involved in collaboratingmade and the costs involved in collaborating• Do you understand the time / duration of a ventureDo you understand the time / duration of a venture• Do you understand any IP and other issues involvedDo you understand any IP and other issues involved• Are you aware of how it may impact the ‘way things are Are you aware of how it may impact the ‘way things are

done around here’ – i.e. sovereignty, decision making done around here’ – i.e. sovereignty, decision making etc.etc.

• Do intermediaries understand how to encourage client Do intermediaries understand how to encourage client companies to collaboratecompanies to collaborate

• Do intermediaries understand how to support Do intermediaries understand how to support collaboration among client companiescollaboration among client companies

Elements of IdentificationElements of Identification

Partners strengths and weaknesses

What new-value the collaboration is going to create

Each partners needs / objectives / motivation for collaborating

What value each partner will contribute

Are other partners needed

The collective know-how of an organization that gives it a competitive advantage. This know-how is a result of learning that is driven by business strategy

and built through a process of continuous improvement and enhancement that may span a

decade or longer. (Grady, Successful Software Process Improvement)

• Are you Good (very good) at it?

• Is it Difficult for others to Replicate / Imitate / Copy?

• Is it Valued (highly) by the Customer?

An area of specialised expertise that is the result of harmonising

complex streams of technology and work activity

(Prahalad &Hamel, Havard Business Review)

Core CompetencyCore Competency

Honda - engine design and manufacture• lawn mowers• cars• trucks• snow blowers Example

Competencies

Capabilities Competencies Core CompetenciesWhat we can do What we are really What is difficult to

good at doing replicate

E.g. CSM

• Supply chain management• ISO9000• EFQM• Six sigma• Kaizen• MRP/ERP• Strategy development• Performance measurement• Product development• Innovation• IT Strategy• BPR• Benchmarking• SPC• Collaborative enterprise dev.• Change management

• Supply chain management• MRP/ERP• Strategy development• Performance measurement• BPR• Benchmarking• Six sigma• Collaborative enterprise dev.• Change management

• Strategy development• Performance measurement• Collaborative enterprise dev.• Change management

E.g. CSM

• Supply chain management• ISO9000• EFQM• Six sigma• Kaizen• MRP/ERP• Strategy development• Performance measurement• Product development• Innovation• IT Strategy• BPR• Benchmarking• SPC• Collaborative enterprise dev.• Change management

• Supply chain management• MRP/ERP• Strategy development• Performance measurement• BPR• Benchmarking• Six sigma• Collaborative enterprise dev.• Change management

• Strategy development• Performance measurement• Collaborative enterprise dev.• Change management

Opportunities!Opportunities!What Opportunities?What Opportunities?

Ansoff Growth matrix

Business Opportunities

L

HL

H

RISK

Revenue /Year €,000 (steady state)

• Assess the identified ‘Opportunities’ in relation to Risk and Gain. • Use circles of different diameter to signify the projected investment to realise

each opportunity.• Risk = Likelihood of occurrence X Impact X Ability to take advantage

Assessment of Opportunities

RISK

GAIN

Do it yourself

High

Low

High

RISK/BENEFITS ANALYSIS

Don’tdo it

Is it worth it?

Low

Collaborate

Checklist for IdentificationChecklist for Identification

• Has a company or group of companies identified Has a company or group of companies identified a potential business opportunity for a potential business opportunity for collaboration?collaboration?

• Have individual members of the group assessed Have individual members of the group assessed their readiness for collaboration?their readiness for collaboration?

• Has each member identified how the Has each member identified how the collaboration will benefit him or her?collaboration will benefit him or her?

• Is a facilitator needed to assist the group in the Is a facilitator needed to assist the group in the next stages? If so has a facilitator been invited to next stages? If so has a facilitator been invited to join the group?join the group?

Formation StageFormation Stage

Elements of FormationElements of Formation

Confidentiality / NDA

Project Management Methodology

Stakeholder Analysis

Business Plan

Risk Analysis

IPR Agreement

Collaboration Agreement

Integration between partners• Info Systems• Health & Safety• Environmental Mgmt• Quality Mgmt• Financial Systems

Collaborative Partnership2008

Business AmbitionsObjs for Customers Objs for Capabilities Objs for Technology Objs for Employees

Projects for Customers Projects for Capabilities Projects for Technology Projects for Employees

Owner:

Owner:

Owner:

Owner:

Owner:

Project Cu1

Project Cu2

Project Cu3

Project Ca1

Project Ca2

Project Ca3

Project T1

Project T2

Project T3

Project E1

Project E2

Project E3

Portal House Partnership2008

Business Ambitions• 1 m€ revenues within 3

years

• 60% of revenue to be generated in new sectors (medical devices?)

Objs for Customers

• To provide full turnkey solutions within 6 months

Objs for Capabilities

• Clean room assembly

Objs for Technology

• To develop an integrated IT management system by end of 2006

Objs for Employees

• To double the return per employee by 2006

Projects for Customers Projects for Capabilities Projects for Technology Projects for Employees

Innovative Culture

Market Focussed

Collaborative Management

Controls and Procedures

Continuous Improvement Env

Implement Innovation Culture

Owner: F. Keohane

Client Management Process

Owner: ???

Web-based Project Management process

Owner: ???

ISO9000 procedures generation / management

Owner: ???

Implement Lean / 6 Sigma culture

Owner: F. Keohane

Project Cu1

Project Cu2

Project Cu3

Project Ca1

Project Ca2

Project Ca3

Project T1

Project T2

Project T3

Project E1

Project E2

Project E3

To be the world’s best at providing niche customer focused design and

prototyping support services to industry in the Electronics and

Medical sectors. We will provide Innovative solutions utilising our

technical and business competencies in a collaborative environment.

Checklist for FormationChecklist for Formation

• Business plan including metrics and targets signed offBusiness plan including metrics and targets signed off

• Benefits to each partner estimated Benefits to each partner estimated

• Reward and recognition arrangements for people agreedReward and recognition arrangements for people agreed

• Management structure, accountabilities, review Management structure, accountabilities, review mechanisms and conditions for termination in placemechanisms and conditions for termination in place

• Systems for sharing information / allocating resourcesSystems for sharing information / allocating resources

• Overall control policy agreedOverall control policy agreed

• IPR implications (if any) knownIPR implications (if any) known

• Auditing process agreed for the initial stagesAuditing process agreed for the initial stages

• Financial arrangements between partners – investment, Financial arrangements between partners – investment, bank accounts, invoicing, spending authorisation etc.bank accounts, invoicing, spending authorisation etc.

Elements of ImplementationElements of Implementation

Monitoring & Control Processes

Performance Metrics

Resource Coordination

Business Process Management

Checklist for Checklist for ImplementationImplementation

• Performance metrics agreed and implementedPerformance metrics agreed and implemented

• Resources from partners integratedResources from partners integrated

• Information systems from partners integrated Information systems from partners integrated

• Collaboration review mechanism in place and Collaboration review mechanism in place and functioningfunctioning

• A decision-making process established and functioningA decision-making process established and functioning

• Targets being achieved and any shortfalls being Targets being achieved and any shortfalls being addressedaddressed

• Effective leadershipEffective leadership

• Is each partner achieving benefits from the Is each partner achieving benefits from the collaboration? collaboration?

Next StepsNext Steps

Next StepsNext Steps

• Test the SMEexcel methodsTest the SMEexcel methods

• Develop On-line support toolsDevelop On-line support tools

• Localise for Turkey, Poland and the Czech Localise for Turkey, Poland and the Czech RepublicRepublic

• Launch the final methodologyLaunch the final methodology

• License the methodology throughout License the methodology throughout EuropeEurope

SummarySummary

• Overviewed SMEexcel projectOverviewed SMEexcel project

• Describer the results of our SurveyDescriber the results of our Survey

• Described the Synergy / Maturity Described the Synergy / Maturity modelmodel

• Outlined the steps in the Outlined the steps in the Collaborative ProcessCollaborative Process

Thank YouThank You

Denis Kearney

Supply Network Shannon

13th October 2005