Whether it’s Leicester City’s triumph in this year’s Premier League, the Cleveland Cavaliers come from behind victory in the recent NBA finals or your own procurement team, great teams all have one thing in common, they are working towards shared goals.
Working together with people from within your organisation can be a challenge in itself, but when you decide to take the bold step and start working collaboratively with your supply base, a new set of challenges arises.
How can two businesses with different balance sheets and potentially different objectives start to collaborate in a manner that will enable each of them to be successful in their own right? We deal with this topic in some depth in our Supplier Collaboration Whitepaper, but today I want to introduce the concept of a Statement of Intent and it’s role in collaborative supplier governance.
The Statement of Intent
The Statement of Intent is a jointly developed document, agreed upon by those that will form the relationship governance team. The document, which should be developed at the start of collaborative supplier relationship, sets out the strategic objectives and desired outcomes of the relationship that will ensue. It spells out the strategic direction and objectives of what both parties hope to achieve and provides a fantastic reference point of team members to reflect back on when tough decisions regarding the relationship need to be made. Think of it kind of like constitution for your supplier relationship.
A Structured Approach.
A well written Statement of Intent should be comprised of the following components.
- A Shared Vision Statement and Strategic Objectives;
- A set of Guiding Principles that govern the relationship. (Loyalty, Reciprocity, Autonomy, Honesty, Integrity, Equity)
- A proceeding set of Intended Behaviours that follow the governing principles and aid in delivering on the Shared Vision.
We’ll be addressing each of these in more detail in blogs over the coming weeks, but you can find out more right now by downloading our free Governance Whitepaper.
Getting It Done.
Every relationship is unique, so it’s true that there can be no one-size-fits-all approach to creating a Statement of Intent. That being said, you’ll find some broad guidelines below that should be applied when creating your Statement of Intent. Doing so will ensure that your commercial relationships will remain successful, reliable and sustainable well into the future.
- Develop the statement jointly.
- Laser in and document how the relationship will be mutually beneficial. This is achieved by agreeing on a common approach to value.
- Look around you. Understand the space that you’re working in. The nature of the current relationship, the market in which you operate and the people within the team, must all be closely understood before creating a Statement of Intent.
- Begin with the end in mind. Think long term aspirational goals. What would best practice look like in this space?
For more information on each of these components, or to start developing your own Statement of Intent today, download our free whitepaper on Governance in collaborative supplier relationships by clicking the link below.