Quality Progress - September 2017 - 50

Innovation Imperative
of information transferred over a
period of time.
It is far too easy to lay out
generic principles in the early
stages of relationship building.
The principles must be specific.
Avoid words like "review," "appropriate," "frequent" or "necessary."
The decision-making process
in each organization must be
understood by each partner. At
what level are decisions made?
What are the steps in the decision-making process? What are
the key decisions that are likely
to be taken as the project moves
forward?
There must be nonfinancial
leading indicators for alliances.
Obsession with short-term
financials will kill the relationship.
Using process measures such as
number of opportunities, number
of solutions and "speed of bug
elimination," for instance, will
drive progress.
An alliance is normally formed
because each party brings an
asset-whether it is market, intellectual property or technology.
Recognize that the other partner
will not understand your market
nuances if that is what you bring
to the table. If the other partner
brings technology, you must take
time to understand that.
These are only the first steps.
Differences in culture are also
a big issue. What might at first
be seen as "attention to detail"
can rapidly become "slow and
bureaucratic." A behavior that at
first is seen as a fast response can
soon be seen as reckless.
In my own work with the
International Organization for
Standardization, I interact with
people from cultures across
the world. Europeans often
seem to want to debate forever,
while sometimes it seems North

50 QP

Americans race on with thoughtless abandon. East Asians seem to
be inscrutable, and people wonder
what they are thinking. Taking time
to form working relationships in
our meetings is a critical part of our
work.
Agree how information will be
shared and how problems are
shared. Agree on approaches
for both of these, as well as for
normal work activity. Problems
may well arise from within your
own organization, and you have
a responsibility to address them
internally when that happens.

Managing your alliances

So having arrived at an alliance,
there is still risk that must be
managed. Chances are that if you
have a new product or service, you
have at least one new supplier or
subcontractor, and they may not be
conventional. It may be software or
knowledge the supplier or subcontractor is supplying. All your other
suppliers can keep their promises,
but if this one fails, you fail. Always
assess your supplier.
If you have four key suppliers
with three of them at 90% probability of delivering, and the fourth
at 40% probability, the combined
probability of your supply base
coming together for you is only 0.9
x 0.9 x 0.9 x 0.4 = 29%. You certainly wouldn't move forward with
an internal risk at that level without
serious mitigation.
The lesson? You may well find it

September 2017 ❘ qualityprogress.com

better to pursue a new product or
service with high internal risk that
you can manage, and mitigate a low
external risk that you don't have to
manage.
I don't need to say too much
about risk mitigation. It has become
a well-established practice. To offer
a few examples, you may find a
single source supplier that is slow
delivering, so you manage this
by holding inventory. You may be
unsure about key competencies,
and you invest in additional competency development.
On the other hand, do not invest
in soft budgeting. Just about
every risk mitigation costs money.
Experience shows that tight
budgeting drives resourcefulness.
The one resource that is irreplaceable is time, so plan carefully and
thoroughly.
Remember to partner with your
suppliers. Don't just buy from them.
The performance measure for
purchasing is normally price. The
measure should be value. What are
the suppliers' new offerings that
will help you beat the competition?
What is the knowledge and support
you are getting from your suppliers? 
REFERENCES
1. IBM, "Capitalizing on Complexity:
Insights From the Global Chief
Executive Officer Study," report, 2010,
http://tinyurl.com/ibm-2010-ceo-study.
2. James Moore, The Death of
Competition: Leadership and Strategy
in the Age of Business Ecosystem,
HarperBusiness, 1996.

Peter Merrill is president of Quest Management Inc., an innovation
consultancy based in Burlington, Ontario. Merrill is the author of
several ASQ Quality Press books, including Innovation Never Stops
(2015), Do It Right the Second Time, second edition (2009), and
Innovation Generation (2008). He is a member of ASQ, previous
chair of the ASQ Innovation Division and current chair of the ASQ
Innovation Think Tank.


http://www.tinyurl.com/ibm-2010-ceo-study http://www.qualityprogress.com

Table of Contents for the Digital Edition of Quality Progress - September 2017

Seen and Heard
Progress Report
Mr. Pareto Head
Career Coach
Expert Answers
Field Notes
Data Disruption
The Deal With Big Data
Better Intelligence
A Study in Measurement
Innovation Imperative
Statistics Spotlight
Standard Issues
ASQ's 2017 Quality Resource Guide
Marketplace
Footnotes
Back to Basics
Quality Progress - September 2017 - Intro
Quality Progress - September 2017 - cover1
Quality Progress - September 2017 - cover2
Quality Progress - September 2017 - 1
Quality Progress - September 2017 - 2
Quality Progress - September 2017 - 3
Quality Progress - September 2017 - 4
Quality Progress - September 2017 - 5
Quality Progress - September 2017 - Seen and Heard
Quality Progress - September 2017 - 7
Quality Progress - September 2017 - Progress Report
Quality Progress - September 2017 - 9
Quality Progress - September 2017 - Mr. Pareto Head
Quality Progress - September 2017 - 11
Quality Progress - September 2017 - Career Coach
Quality Progress - September 2017 - 13
Quality Progress - September 2017 - 14
Quality Progress - September 2017 - Expert Answers
Quality Progress - September 2017 - Field Notes
Quality Progress - September 2017 - 17
Quality Progress - September 2017 - 18
Quality Progress - September 2017 - 19
Quality Progress - September 2017 - Data Disruption
Quality Progress - September 2017 - 21
Quality Progress - September 2017 - 22
Quality Progress - September 2017 - 23
Quality Progress - September 2017 - 24
Quality Progress - September 2017 - 25
Quality Progress - September 2017 - The Deal With Big Data
Quality Progress - September 2017 - 27
Quality Progress - September 2017 - 28
Quality Progress - September 2017 - 29
Quality Progress - September 2017 - 30
Quality Progress - September 2017 - 31
Quality Progress - September 2017 - 32
Quality Progress - September 2017 - 33
Quality Progress - September 2017 - Better Intelligence
Quality Progress - September 2017 - 35
Quality Progress - September 2017 - 36
Quality Progress - September 2017 - 37
Quality Progress - September 2017 - 38
Quality Progress - September 2017 - 39
Quality Progress - September 2017 - 40
Quality Progress - September 2017 - 41
Quality Progress - September 2017 - A Study in Measurement
Quality Progress - September 2017 - 43
Quality Progress - September 2017 - 44
Quality Progress - September 2017 - 45
Quality Progress - September 2017 - 46
Quality Progress - September 2017 - 47
Quality Progress - September 2017 - Innovation Imperative
Quality Progress - September 2017 - 49
Quality Progress - September 2017 - 50
Quality Progress - September 2017 - Statistics Spotlight
Quality Progress - September 2017 - 52
Quality Progress - September 2017 - 53
Quality Progress - September 2017 - Standard Issues
Quality Progress - September 2017 - 55
Quality Progress - September 2017 - 56
Quality Progress - September 2017 - 57
Quality Progress - September 2017 - ASQ's 2017 Quality Resource Guide
Quality Progress - September 2017 - 59
Quality Progress - September 2017 - 60
Quality Progress - September 2017 - 61
Quality Progress - September 2017 - 62
Quality Progress - September 2017 - 63
Quality Progress - September 2017 - 64
Quality Progress - September 2017 - 65
Quality Progress - September 2017 - 66
Quality Progress - September 2017 - 67
Quality Progress - September 2017 - Marketplace
Quality Progress - September 2017 - 69
Quality Progress - September 2017 - Footnotes
Quality Progress - September 2017 - 71
Quality Progress - September 2017 - Back to Basics
Quality Progress - September 2017 - cover3
Quality Progress - September 2017 - cover4
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