This weeks Highways Voices hears how highways and infrastructure organisations could unlock between 5 and 10% more value from their strategic partnerships by treating trust as an operational asset.
XTP founder Pieter Johnson tells discusses how contracts designed to encourage collaboration will not produce better results unless they are accompanied by openness, shared objectives and the right behaviour from those leading the partnerships.
His white paper, Trusted Partnerships: Unlocking the Value in Strategic Alliances, draws on research involving 48 strategic partnerships. More than three-quarters of respondents believed stronger trust could add at least 5% in value, while more than half estimated the potential gain at more than 10%.
Mr Johnson explains to interviewer Adrian Tatum that many partnerships are delivering their contractual requirements but could achieve considerably more.
“The contract forms are there, the procurement routes are all there, so we’ve got to see how can we maximise them and get the most out of it,” he says.
He argues that clients and suppliers should begin assessing each other’s behaviour before procurement formally starts, rather than concentrating solely on technical capability, products and price. This should include examining whether potential partners communicate openly, share common goals and have demonstrated that they can build trusted relationships with previous clients.
The podcast also considers the importance of vulnerability within partnerships. Mr Johnson says organisations are often reluctant to share financial pressures, emerging problems or innovative ideas because they fear this information could be used against them.
Mr Johnson also challenges the highways sector to stop allowing price alone to determine procurement decisions. The discussion covers payment performance, the balance of power and risk, the use of artificial intelligence in procurement and how international partnerships can bring new technologies and ideas into the UK.
Mr Johnson’s message to Government, procurement professionals and industry leaders is to “stop buying on price, share power and risk, and treat trust as an asset”.
Listen to the full podcast here:
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