Transcript Slide 1

Compatibility and Trust® (CaT)
Assessment
Topics
• About the Research
• Logistics of the Survey
• Sample Survey Results
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About the Researchers
• The Compatibility and Trust Assessment (CaT)
was developed by Jerry Ledlow Ph.D. and Karl
Manrodt Ph.D. to measure the strength of
business relationships
• Based on research
– Supports Dr. Oliver Williamson’s assertion that style
matters
• Seeks to show buyers and suppliers where they
have gaps in order to help foster better a
stronger wonder relationship
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©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission
The CaT Assessment Identifies Each Parties Style
Muscular
Styles
Benign
Styles
Competitive
Avoidance
Empathetic
Adaptive
Vested
Credible
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©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission
We Then Map Each Parties Approach…
More
Aligned
Value Seeking
Value Building
Supplier
Relationship
Dynamics
Value Tipping
Buyer
Value Fading
Value Holding
Less
Aligned
Less Aligned
Compatibility
Alignment
More Aligned
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©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission
…And Look for Alignment
Misalignment: Increased transaction cost,
smaller solution/agreement set of options
Misalignment
Alignment: Decreased transaction cost,
larger solution/agreement set of options
Alignment
Firm A
Firm B
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©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission
Five Dimensions of Compatibility and Trust
• Trust: Performance to promise and meeting commitments is the
foundation of trust. Without performance, trust cannot exist.
• Innovation: Strong and trusting relationships allow the parties to share
risks and rewards, investing in each other’s capabilities and collaborating to
achieve common goals.
• Communication: The open and timely sharing of all information that
is relevant to a partner’s decision-making ability.
• Team Orientation: Both sides of a relationship believe in the
relationship. Efforts are made to view decisions from the partner’s
perspective to mitigate opportunism and promote collaboration.
• Focus: There is common purpose and direction.
When the five dimensions of compatibility and trust are
cultivated, relationships can prosper due to greater
collaboration and better performance.
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The Structure of the Assessment
• The assessment is conducted using a 360 degree “twoworld view” where:
– The buying company provides responses about their own
organization, and their perspective of the service provider
– The service provider provides responses about their own
organization, and their perspective of buying company
• We ask participants to rank statements related to the
relationship on a scale from “not at all” to “always”
• In addition to the questions, we ask for a bit of
demographic data which describes the individuals role in
the Buying Company/ Service Provider relationship to
help us compile the results
• The survey is typically anonymous – but can be set up to
identify individuals for coaching purposes
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©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission
Topics
• About the Research
• Logistics of the Survey
• Sample Survey Results
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The Web Based Trust Survey
• Assessments are conducted using Qualtrics - a
confidential internet based survey service
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–
–
–
We create a web link to the assessment for each company
It takes about 15 minutes to complete
The link to the survey is typically kept open for 2 weeks
Individual responses are kept confidential
• Buyer-Supplier teams receive a unique link that
allows us to pair their data and create a 360
degree view of the relationship
©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission
More is Better
• We recommend broad participation by both companies,
including individuals with varying responsibilities at
various levels (leadership, management, operations)
– Multi-level responses will make for better results
– The assessment format allows for a reasonably large number of
people to take the survey
• The more wide-ranging the responses the better we are
able to capture the rhythm of the relationship between
the parties.
• We typically see between 7 and 50 responses from both
buyers and suppliers.
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Topics
• About the Research
• Logistics of the Survey
• Sample Survey Results
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Strategic Sourcing Climate Assessment
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Vested Deal Readiness Index By Dimension
The Vested Deal Readiness Index by dimension scores each
dimension considering the differences in scores between the parties.
Vested
Readiness
Index
0.64 ± 0.08
Companies are ready for Vested when they have a solid relationship as
indicated by a Vested index over 0.70. The relationship should be improved
before moving to a Vested Agreement if the index is below 0.70.
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©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission
Visualizing the Scores – Average Score
Looking at the average scores indicates areas the parties need
to improve together, in order to have a Vested relationship.
The combined
relationship
scores show that
the parties should
work on
improving…
Focus, Team
Orientation,
Communication
and Innovation.
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©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission
Scoring by Dimensions
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©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission
Scores by 360 Degree View
The total compatibility and trust score is measured across the four views.
Differences in total score need to be investigated by the parties, and the
relationship improved.
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©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission
Visualizing the Scores – All Views
Scoring shows where the strengths and weaknesses lie in the
relationship.
Two world view
is based on each
company
performing a self
assessment and
assessing their
partner.
— Company
— Company
— Company Perception of Service Provider — Company Perception of Service Provider
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©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission
Visualizing the Scores – Small Gaps
In a good relationship the views of each party show little gap in
scoring across all 5 dimensions of compatibility and trust.
When the parties’
views align. The level
of trust is improved
and the potential of
the relationship
enhanced.
Little Gap
In Views
— Company
— Service Provider Perception of Company
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©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission
Visualizing the Scores – Large Gaps
When the views of each party show a large gap in scoring across the 5
dimensions of compatibility and trust the relationship needs work.
Regardless of
the score it is
important that
the parties’ views
align.
Gaps show
issues with
perception that
erode trust and
impact
communication
and cooperation.
Large
Gaps
— Service Provider
— Company Perception of Service Provider
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©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission
Visualizing the Scores – Self Views
Understanding how the parties view themselves is an important
step in driving improvement.
The Buyer ranked
itself low in
Focus, Team
Orientation and
Communication
Both companies
rank themselves
high in Trust
The Supplier
ranked itself fairly
high across all
dimensions.
— Company
— Service Provider
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©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission
Using the Results to Focus Improvement
• The Compatibility and Trust Assessment helps
the parties to open a dialog so that they can
improve their relationship
– Addressing gaps in how each party views the other
– Addressing low scores across the 5 dimensions of
compatibility and trust
– Ensuring the relationship is mature enough to
progress to a Vested agreement
• A strong relationship is needed for a successful
Vested journey
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Contact Us to Learn More or Get Started
Want to learn more
about the CaT
Assessment?
Email Kate Vitasek,
lead faculty and
researcher at
[email protected]
Kate Vitasek
Vested Lead Faculty/Researcher
University of Tennessee,
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Appendix:
Example Tendencies of Each Style
Tendencies of Avoidance Style
• When an issue is trivial or more important issues are
pressing
• When you perceive no chance of satisfying your needs
• When potential disruption outweighs the benefits of
resolution
• When tempers are high and time is needed to let people
cool down and regain perspective
• When gathering information supersedes immediate
decision
• When the relationship could be damaging to the
organization and is not critical
• When partnering or contracting seems rushed or pushed
as a result of other issues; short term strategy to buy
time
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©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission
Tendencies of Empathetic Style
• When issues are more important to others than
to you; to satisfy others and maintain
cooperation
• To build social capital for later issues.
• To minimize loss when you are outmatched and
lack any competitive advantage
• When harmony and stability are especially
important; when you are building up a weaker
partner in the market
• To allow subordinates to develop by learning
from their mistakes
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©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission
Tendencies of Competitive Style
• When quick, decisive action is vital to the
organization (e.g., emergency situations such as
a disaster or terrorism incident or accident)
• On important issues where unpopular actions
need implementing (e.g., cost cutting, enforcing
unpopular rules, discipline)
• On issues vital to company welfare and survival
when you know you're in a state of advantage
• Against people who take advantage of
noncompetitive behavior
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©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission
Tendencies of Adaptive Styles
• When goals are important, but not worth the effort or
potential disruption of competing but worth a more
collaborative approach
• When opponents with equal power are committed to
mutually exclusive goals; you adapt to the contract /
partnership situation and create the most
advantageous position
• To achieve temporary settlements to complex issues
• To arrive at expedient solutions under time pressure
• As a backup when a Vested or Competitive style is
unsuccessful
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©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission
Tendencies of Vested Style
• Feel a better solution can be achieved through problem-based
collaboration
• Focus on solving problems, enhancing benefits, not on
accommodating differing views
• Flexible, understanding that solutions have positive &
negative aspects
• Ability to understand other parties issues
• Problems are looked at objectively, not personally
• A solid knowledgeable about the relationship and transparent
view of cost structure to help drive problem solving
• Understanding the need to occasionally “save face”
• Celebrate successful outcomes openly
• Find innovative solutions when both sets of concerns are
important
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©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission