Strategic Partnerships:

Building Trust

Building Trust Between Organizations

The Core Element of Partnership in Today's Rapidly Changing Knowledge Economy

Vadim Kotelnikov personal logo Vadim Kotelnikov

Founder, Ten3 Business e-Coach Inspiration and Innovation Unlimited!

"Trust is at the heart of today's knowledge economy." ~ Jordan D. Lewis 

Trusting Business Partnerships

Key Benefits

  • Confidence: Trust creates confidence between partners that actions taken will serve both parties' interests.

  • Strategic Alignment: Trust creates the probability that a firm will understand it's partner's actual strategic intent as it participate in alliance.

  • Predictability: Once strategic intents are aligned, it is easier for a firm to predict the actions its partner will take as it encounters different situations requiring decisions to be made that will affect the alliance.

  • Synergy: The companies or teams within a company - can share their know-how to achieve synergy results that exceed the sum or the parts.

  • Mutual Creativity: Trust frees partners to respond together to the unexpected, which is essential for mutual creativity.

  • Improved Performance: Trust fosters enthusiasm, ensuring the best performance from everyone.

Strategic Business Partnerships

8 Conditions for Trust Between Organizations

10 Key Features of Effective Partnerships

Getting People Issues Right in Mergers and Acquisitions

Strategic Alliances

Joint Ventures

Case Studies

Progroup's Various Sources of Knowledge

AT&T: Developing New Credit Card Service

Joint Engineering Design by Ford and ABB

Trust Between Organizations Defined

Mutual trust is a shared belief that you can depend on each other to achieve a common purpose. In a strategic partnership or a strategic alliance, "where your purpose is to get results that exceed what a transaction can do, mutual trust also means you can depend on each other to adapt as necessary. That involves more than keeping promises, because it entails changes that can't be planned in advance."1

Enhanced Emphasis on Trust in the New Economy

Trust both between individuals and organizations is at the core of and delivers significant benefits in today's complex and rapidly changing knowledge economy.

New Economy: Key Features

It is one of the most efficient mechanisms for governing innovative business partnerships. With trust as a foundation, the companies or teams within a company can share their know-how to achieve synergy results that exceed the sum or the parts.

"When both parties are known to be trustworthy, an expectation of loyal behavior exist for the parties as a cooperative arrangement is formed. Because of this expectation, firms are able to allocate fewer resources to monitor and control the alliance. In contrast, greater amounts of resources are required to monitor and control an alliance formed with a firm whose previous behavior suggests it can't be trusted."3

All-Encompassing Effort

Trust is not a matter of blind faith. Your must construct it step by step. Further, building trust between organizations is all-encompassing. It involves your people, corporate culture, politics, practices, priorities, and structures.

Inspiring Culture: 5 Elements

Interpersonal Relationships

Interpersonal relationships are a critical element of trust between organizations. They make the connection. Business partnerships lives through people this is how all the parts come together. "Deep trust the essential ingredient for creating the most value and solving the toughest problems grows as interpersonal relationships strengthen."1

Trust as Competitive Advantage

Trustworthy firms have competitive advantage when it comes to forming and using cooperative strategies. "One reason for this is that it is impossible to specify all operational aspects of a cooperative arrangement in a formal contract. Confidence that its partner can be trusted reduces the firm's concern about the inability to control or influence each operational aspect of an alliance through a contractual agreement."3... More

SMART Business Architect (Ten3 Mini-course)

 

References:

  1. Trusted Partners, Jordan D. Lewis

  2. "Harvard Business Review on Mergers and Acquisitions", Harvard Business School Press

  3. Strategic Management: Competitiveness and Globalization, Edition 4, Thomson Learning