Nested Agreements

Kevin O'Gorman

October 21, 2020, 11:33:21 PM

How do agreements become efficient and effective enough to impact performance in a global company? It starts with leadership.

Situation
A high-tech, multinational had already shaped its multi-billion dollar global supply chain into a formidable advantage. Now they needed to lower costs by 15% (again) while maintaining quality, time-to-market, and not gutting vital processes. Operationally, they needed to streamline processes, reduce costs, improve efficiencies, and save money. As a global player, they had to build a shared mindset, align varied visions, agree on priorities and methods, incorporate needs, and leverage disparate definitions of success.

Approach
We conducted a series of interviews about what was working, what was not working, what was possible, and what was chronic, intractable, and insurmountable. The picture that emerged was one of disciplined, transactional, operations. Vendor relations and customer relations were highly valued and, overall, working. Yet, this was occurring at the expense of high-quality, internal colleague relationships. An overused organizational strength took for granted a foundation that was silently eroding. This was leading to disjointed communication and frustrations. Although this had left customers and vendors mostly untouched, it was only through isolated acts of heroism. Confusion, burnout, and growing resentments were trending toward misalignment.

We decided to approach the internal situation by extending their externally facing values inward. We posed a series of questions: What was the essence and form of their values, internally and externally? Was there a false assumption of scarcity? Had they put their internal and external worlds on opposite ends of a seesaw? Perhaps, the metaphor was not one of opposites, but one of nested agreements? We worked with them on creating global agreements about which agreements nest inside other agreements.

Result
As they came to appreciate they could live their values from the inside out, they opened up about functional and cross-functional challenges made new agreements and achieved an additional 15% cost reduction through improved efficiencies.