Breaking Through The Great Wall Of China: Taking Business Relationships To The Next Level

Everywhere you look today there seems to be a great deal of discussion regarding the importance of managing relationships. The focus on how key stakeholders interact with one another and its impact on achieving improved outcomes in areas such as complex contracting is nothing new. At least not from the standpoint of recognizing the need to collaborate, communicate and cooperatively work together towards achieving a mutual goal.

What is different, however, is how these important relationships are structured is no longer driven by circumstantial factors. The I-35 bridge project in Minnesota about which I have talked previously is just one example of the way that external forces such as an immediate need used to be the impetus for “one-off” relationship success. Unfortunately, after addressing the immediate need, the approach to stakeholder interaction would revert to the familiar and largely ineffective adversarial model in which the usual outcome did not replicate the former’s success.

With the new approach, in which standardization through the establishment of ISO 44001 has led to the transformation of complex business relationship scalability beyond having the right factors come together at the right time, we have laid the foundation for client success regardless of present circumstances or contractual arrangements. This scalability as I call it – which enables an established model or framework to be universally applied to realize consistent outcomes is the reason why my work on the ISO 44001 two years ago was so important. It is also why the recent ISO T286 meetings in Shenzhen, China were very successful.

Breaking Through The Relational Wall

Two very important things came out of the China meetings. First, we finalized 44002 – a guide to implementing 44001 requirements which will be going for a vote before the ISO community.

Second, the ISO committee reached an agreement regarding the development of a special guide (44003) to help Micro, Small and Medium Enterprises (MSMEs) to collaborate more effectively. ISO 44003 will also provide larger firms with a roadmap to improve their engagement with MSMEs. The introduction of this guide is very exciting for me at the personal level as I believe this will be a game-changer in how MSMEs contribute to innovation and economic activity. It will also be a catalyst for fundamental change in public sector procurement.

Through the introduction of these guides, the ISO standard creates a solid foundation for building strong and productive business relationships that will consistently deliver desired outcomes regardless of the industry sector and organization structure or size. In other words, we are now in the position through the two ISO documents to break through the barrier or wall of relational scalability and in the process establish for the first time a truly universal standard for relationship management and success.

In early 2019 we will be presenting a series of webinars providing the framework for the two guides, and how organizations can utilize them to achieve success in all major projects or initiatives. We look forward to having you join us, and will provide you with the registration links for the first in the series in an upcoming post.

A Personal Invitation

For those who are new to my network, whether you are trying to unlock the power of collaboration in your existing relationships, or attempting to enable your digital strategy or collaborative project delivery, we can help you to establish the systematic model in your organization and relationships.

Become A Member of The ISO 44001 Mirror Committee

The Canadian ISO 44001 Mirror committee is looking to expand its current membership including a vice role. For those who are interested in participating, please send me your CV and indicate for which stakeholder group you either represent or advocate.

November 20th Post



ISO 44001: Creating The “New”​ Standard For Business Relationships

Over the past few months there has been, with increasing frequency, the publication of many articles written on the emergence or re-emergence of the relational approach to complex business relationships.

Whether it is a true renaissance or not, remains to be seen. After all, the importance of relationships in business, and for that matter, in everyday life is not a “new” concept.

However, what is new, is that for the first time there is a means by which you can quantify and evaluate the effectiveness of your relationships.

ISO 44001 Standard: Moving From Intent To Actualization

In today’s increasingly diverse marketplace, the complexity of doing business demands more than just a simple intent to collaborate. It requires both a commitment and a solid understanding of the changing dynamics in how government and industry do business, and the critical role that relationships play in achieving successful outcomes.

To this end, and to address the complexities of public-public and public-private business arrangements, several collaborative models and corresponding frameworks have emerged over the past decade. The primary objective of these new models was to move beyond the transactional architecture and mindset that has limited collaboration effectiveness.

While this demonstrated a recognition and intent to become relational, a clearly defined framework through which such relationships could actually be structured, implemented, and measured for effectiveness on an ongoing basis, was not available.

ISO 44001, presents a real and meaningful opportunity for organizations to both contribute and share best practice methodologies in the areas of collaboration and relationship management.

Originally established in 2013, the ISO/PC 286 Collaborative business relationship management framework, was proposed by the British Standards Institution in the United Kingdom – otherwise referred to as “BSI-UK” based on the success of the BS 11000 model in the UK and Europe. ISO 11000 which has been renamed to ISO 44001 was approved for publication on December 6, 2016.

With an established and globally recognized standard such as the ISO 44001, a continuity of understanding and progressive insight will ultimately create a truer and more enduring framework that will serve as the standard for relationship management.

New Standard Inevitability

The International Organization for Standardization (ISO) is an international organizations that was founded on February 23rd, 1947. Focused on promotion worldwide proprietary, industrial and commercial standards, ISO was one of the first organizations that was granted general consultative status by the United nations Economic and social Council.

Needless to say, ISO certification carries a great deal of influence around the globe in terms of certifying that an organization’s management system, manufacturing process, service and documentation procedure meet all the requirements for standardization and quality assurance.

In this context, the introduction of the ISO 44001 standard was inevitable. The reason is relatively straight forward; relationships and relationship management – especially when it comes to managing complex contracts, requires more than an enforcement of legal terms and conditions. It requires true collaboration and transparency between all stakeholders, which prior to the establishment of the ISO 44001 standard, were merely reflections of the desire to work together.


Upcoming ISO 44001 Related Seminars and Workshops

Strategic Relationships Solutions Inc., in partnership with the Centre for Executive Leadership, Telfer School of Management, and the Institute for Collaborative Working (ICW) is pleased to offer a seminar on Relationships Management and Relational Contracting in Ottawa on May 23-25 and Toronto on June 14-16, 2017.

For more information and registration please see course outline for details or contact us directly at


Building High-Performance Business Relationships

Achieving sustainable performance on large-scale programs and projects requires that both existing and potential partners establish proactive, flexible, and collaborative relationships.

The KPMG-SRS Centre for Strategic Relationships and Contract Management is pleased to offer:

An Executive seminar on Relationship Management, Relational Contracting, and Collaborative Working in Ottawa on October 24-26 at the KPMG Offices located at 150 Elgin Street.

This Seminar will provide attendees with a systematic model for managing complex relationships. As they progress through the program, they will gain the knowledge and skills to effectively plan, source, establish and maintain relationships that will deliver exceptional performance. It will provide them with the tools to shift organizational mindset and to create a culture of collaboration and trust.

We recommend this three-day training program for Public & Private Sector Executives, Relationship Managers, Service Delivery Managers, Vendor Relationship Managers, Procurement Managers, Business, and IT Managers, as well as Senior Project Managers involved in any significant Outsourcing, Public-Private Partnership or Shared Service.

Download Course Outline or (copy and paste URL;

You can register online here, or (copy and paste URL; or if you would like to discuss the content of the seminar in greater detail, please call me at (613-290-5921), Jean-Francois Seguin (613-212-2818) or contact us at


Andy Akrouche

KPMG-SRS Centre for Strategic Relationships and Relational Contracting

The Defense spending problem and the need for finding the balance between contractual imperatives and relational execution

Whether in recent headlines or within the confines of inner circle discussions talking about Defense procurement and the challenges the Canadian government has been facing in getting it right is a hot topic.

A series of recent articles including one by the CBC titled “After years of missteps, Canadian Military officials hope procurement now on track” provides just one of many examples of the ongoing interest in how the Government spends taxpayer money for defense purposes.

The CBC article attributes many of the problems associated with the purchase of new aircraft, naval ships, and other equipment to poor planning, red tape, and internal bickering. While these challenges are still notable, the CBC also reported that there is a general belief within the Government that they “have learned their lessons” and are on track toward an improved procurement practice.

In this post, I would like to examine what I believe are the causes of the problem, including why I have concluded that the DND is still in the very early stages of the needed transformation to a more efficient and effective process.

Ironically, when it comes to acquisitions within a complex environment, red tape is necessary to; ensure that the proper checks and balances are in place, provide optimum value for money, and to ultimately protect the interests of Canadians while ensuring that we are all pulling in the same direction. Although there is no argument that adequate planning is needed, there should also be a clear understanding that no amount of planning can create certainty in the long term.

Fortunately, the procurement challenges we are discussing here are not unique to Canada. Even though there are many variables, some of which are not as clear cut as they may initially appear, the “real” problem is rooted in the underlying business model, and management framework relating to the acquisition of military equipment and in-service support functions. The creation of the original model occurred during a time when there was no internet when things moved at a snail’s speed. The process then was laborious and intricate. Unfortunately, this older model has not been updated to accommodate today’s fast paced information driven business environment.

Residing in the following three critical areas, the disconnect between the way “we have always done things” and how they now need to be done today is at the heart of the problems we are facing with procurement and complex project or program management:

Transactional Mindset – most troubled acquisitions are usually complex, have a high degree of variability and have many unknowns that require significant collaboration among diverse stakeholder groups to resolve them. By continuing to structure such arrangements as static and rigid transactions or deals that don’t respond well to change or collaboration perpetuates the challenges while limiting the ability to resolve issues. This Artificial Transactional Mindset (ATM) which is the practice of attempting to create certainty in a business arrangement where certainty does not or cannot exist is a seemingly indigenous component of most performance based contracts in the public sector.

Oversight models of management– while there is a requirement for overseeing complex acquisitions, without meaningful insight, such “oversight” is almost always superficial leading to wrong conclusions and failed outcomes. The “oversight without insight” approach operates on the assumption that once a contract is signed all that needs to be done to achieve the desired result is monitor the relationship through the establishment of an army of watch dogs and governance systems to hold a vendor’s feet to the fire.

Adversarial mindset – complex acquisitions such as the ones referenced in the CBC article require the parties involved to work together to resolve problems as they arise. The level of collaboration needed to achieve optimum outcomes increases with the complexity of the acquisition, particularly as it relates to future sourced contracts in which neither the buyer nor the supplier has any previous experience. However, the way we source or establish those arrangements ( transactions ) and the way we manage them (compliance based oversight model) have created an adversarial mindset and an environment where trust cannot flourish. Such an environment is counterproductive to working together to achieve common objectives.

So what is the solution to these as well as other acquisition-related challenges?

If we have learned anything in the last 20 years, we learned that the solution has little to do with reducing red tape, increasing levels of planning or centralizing accountability under one government entity.

The answer lies in what we refer to as the Relational Business Model (RBM™).

RBM™ is an adaptive business model which enables the achievement of optimum outcomes by addressing the root problem. It is a business model that strikes the required balance between contractual imperatives and relational execution.

The Relational Business Model™ consists of three components:

Relational Contracting – an industry engagement and an open and transparent partner selection methodology that achieves ongoing alignment of stakeholder strategies, capabilities, and competencies with overarching program objectives. Relational Contracting recognizes that the entire agreement is not complete in that it will be influenced and affected by the relation of the parties and the changing political, economic and technological conditions that will arise over the life of the agreement. Therefore having the flexibility to evolve and adapt to these changing conditions while maintaining stakeholder alignment is essential.

Relationship Management – managing stakeholder engagement and communications means elevating communications from one-to-one conversations to a system of coordinated interactions encompassing decisions making, delivery management and oversight processes.

Collaborative Working – having the systems, disciplines, and competencies needed to facilitate collaboration within working teams.

This Relational Business Model is now supported by ISO 44001, a standard for collaborative business relationship management. The RBM™ operationalizes ISO 44001 and puts it into practice.

So how do we make the transition?

Although they have only just started marching down this road, there are certain pockets within the Government and more specifically the DND who have recognized the urgent need to make the transition to the relational model and as such, have taken measures to begin the transition. However promising, we are still talking about a change in culture and mindset. Alternatively, to put it another way systems and processes are easy to adjust or modify, but changing the culture and mindset within any organization – public or otherwise, is a slow process and requires incremental introduction and considerable training.

On the subject of training, the article I referred to earlier in this post mentions that DND is considering adding 300 people to the ADM MAT organization. While this is a sound strategy, they should also consider hiring individuals who are free of the old adversarial mindset and see collaboration and achieving joint objectives as the right way to go. In short, the DND must ensure that they are not indoctrinating newcomers in the old way of doing things.

Getting Beyond Crisis Triggers As the Foundation For Successful Relationships

Do not get me wrong, there are of course steps that can and must be taken to evolve the relationship between stakeholders, from the concept stage through to the execution and outcome stage.

One example is the Staircase of Relationships presented by Malcolm Morley in his June 9th, 2016 blog post of the same name.

But here is the thing . . . building successful relationships is not simply a matter of following a recipe in a cookbook, or following Ikea-like instructions to assemble a piece of furniture.

If it were that simple, then everyone would be doing it. The high rate of complex relationship failures speaks to the inadequacy of the simple plan approach.

Based on my experience over the past 20 plus years in developing my relational model framework – including the core Relationship Charter – I have found that success begins with a desire to work together.

This means that I have had to learn how to facilitate a “WE” mentality or mindset based upon understanding key external triggers. In other words, understanding the triggers that get people beyond an us against them attitude, to a WE mindset. This is the key to relationship success.

Think of it like diet and exercise. People know that eating right and working out 2 to 3 times a week is good for them. However, it usually doesn’t lead to a sustainable change in behavior until something major happens, such as a heart attack.

It seems that only when it gets to a critical or a crisis stage that people are willing to take proactive measures to change. In the case of relationships, this means moving towards greater collaboration and cooperation.

Take the I-35 Bridge collapse in Minnesota.

I talked about this at length in previous posts.

When the tragedy struck, the state and its suppliers put aside all standard procedures and rolled up their sleeves and worked together to achieve a solution.

The end result was a bridge that was built in record time at considerable cost savings.

Unfortunately, and in the absence of a crisis, with the next bridge project, the state reverted to its old ways. They subsequently ran into the same old problems that have traditionally infected the relationships between key stakeholders in the public sector.

The question is why? If it worked so well for the I-35 project, why wasn’t the same approach adopted for all future projects?

In short, do we only work well together when faced with a crisis? Is getting to WE impossible outside of the framework of dire circumstances?

This brings us back to my original point in today’s post.

Relationship models that do not take into account the above variables of human nature, and thus enforce compliance to a set of executable criteria alone, will not achieve success.

There has to be a desire to work together.

pulling same direction4

In my next post, I will tell you how to create that desire within the framework of my relational model in the absence of a crisis trigger.

In the meantime, and if you want to get a truly in-depth understanding of how to create the desire to work together outside of a crisis scenario, here is the link to my book Relationships First: The New Relationship Paradigm In Contracting.

Why scrap shipbuilding strategy? Improved outcomes starts with open communications and transparency

“That project was awarded to the Seaspan’s Vancouver Shipyard. The briefing assigned no blame but suggested there were improvements the B.C.-based shipbuilder could make . . . “Vancouver Shipyards needed to find skilled staff, establish capability to increase design work and learn how to use new facilities,” the briefing material said.” – CBC News, November 25th, 2015

As I read the above excerpt from a recent newspaper article in which it was reported that costs related to the national shipbuilding procurement strategy (NSPS) had “ballooned” by the billions of dollars, it would be reasonable to wonder what happened?

Was there a breakdown in communication, or a lack of understanding relating to what was and was not actually possible, that led to the project coming in at 181 percent over budget?

Simply put, in formulating its “procurement strategy” through which partners such as Seaspan were engaged, were the government and its industry partners too eager to make a move in a particular direction? Did they make key decisions before they had a true handle on either the scope of the project, or its eventual cost?

Once again, and coming in at 181 percent over expected budget, one could be excused for thinking that this was the case. To a certain degree – at least in relation to the last paragraph, this would be a fair conclusion.

But does it bring us any closer to a real understanding of why it happened, and more importantly, how we can prevent it from happening again in the future?

In this regard, I would like to refer to an Ottawa Citizen article by former ADM MAT Alan Williams.

According to Williams, the government should scrap its plan – in fact the entire NSPS strategy, in favor of a return to the way things had been done in the past. Specifically, utilize DND personnel to write the statements of requirements that will achieve the needed balance between effectively describing the military’s needs while, enabling the private sector to bid a fixed or certain price.

While Williams’ approach may at first glance, seem reasonable, there are some problematic gaps in terms of what he is recommending.

To start – and this should come as no surprise to anyone who has read my blog or, attended my seminars, it is virtually impossible to reliably establish a set requirement without taking into account that both our needs and/or the product or service offering of the vendor will inevitably evolve over time.

Beta Versus VHS

Think about what I am saying from the standpoint of an everyday situation.

Many of you will likely remember when both Beta and VHS first came out.

They were clearly different formats that were not interchangeable. This meant that when you chose one over the other, you were in reality locked in to that choice.

However, and before making your final decision of which technology to buy, you likely did some research into the differences between the two, in an effort to determine which format would best suit your needs both now and in the future. In short, you made your decision based upon the best information that was available at that time.

Shipbuilding Options

What happened to everyone who chose Beta?

In choosing Beta, did you make a bad decision? Did you make a mistake?

Perhaps you can take solace in the fact that even VHS was eventually replaced by newer and more advanced technology.

The point is this; wouldn’t it have made sense to pursue a certain course of action today, while keeping your options open for the future relative to any unforeseen changes in the market?

For example, what if you purchased your Beta system from the vendor, with the understanding that you could trade in the unit and exchange your library of movies at a future date, and do so at a preferred price?

I realize that this is an overly simplistic example, but it does effectively illustrate my point regarding the problems with locking in both the buyer and vendor into a set course of action. Particularly when it involves complex technologies and long term contracts that can span years and even decades.

Now I do not want you to misinterpret by position regarding the Williams suggestion as an indication that I am fully supportive of the NSPS approach. It clearly has its shortcomings. This being said, I do believe that the NSPS strategy has its strong points, and is therefore good for Canada.

For example, it does facilitate government intervention with regard to creating a sustainable supply chain. The NSPS strategy also stimulates economic activity and opportunities, that would otherwise have been missed under the transactional model that Williams is proposing.

What this means is that rather than trying to tighten specifications and hold vendor feet to the proverbial flame, we need to work towards creating a more consultative and collaborative engagement mechanism between government and private industry.

Once again, this is something that is not possible under the ever elusive certainty model that Williams is proposing.

While Williams and perhaps even the Central Agencies want us to think that they operate in a world of absolutes in which there is a high degree of certainty in costs and outcomes, nothing can be further from the truth. The fact is, there is no such thing as absolutes – especially when it comes to building new aircraft, new warships or for that matter any complex acquisitions for which either new supply chains must be established or, an economic activity created.

Now at this point, some might be inclined to point to LCC analysis models as a solution to the problem. While there is no doubt that LCC analysis will enable management to understand the total cost of ownership, it is not a cost prediction tool.

A more reasonable approach to addressing budget overruns is to accept the fact that with complex initiatives, absolutes do not exist until after the fact. It is the immutable 20-20 hindsight rule of the procurement world.

Within this context, it would make far more sense to openly say that we do not know what the exact cost and benefit will be at this time however, it would be reasonable to establish a target of say $30 billion in cost, and $50 billion in potential benefits.

As we progress further through the process we are, at set time intervals, committed to establishing a communication and reporting discipline involving all stakeholders. It is at these points of open engagement that we will be able to gain more certainty regarding costs as well as the related economic and industrial benefits. In short, the present information vacuum that exists between project announcement and the revelation of a 181 percent budget overrun will be eliminated, and with it the shock leading to a futile exercise in finger pointing, and what went wrong lamentations.

What I am really talking about is managing a collaborative process as opposed to executing an adversarial transaction.

If the government really wants to achieve a different outcome, then they have to move beyond the adversarial matrix of a transactional orientation in which the buyer’s role is limited to project monitoring and contract enforcement.

Shipbuilding transparency2

This means that they will have to adopt a radically different yet undeniably proven mindset, that is based on a collaborative approach that drives ongoing alignment with project goals, and open communication.

The real question this raises is whether or not TBS, PSPC, IC and Program owners are ready to become relational in their thinking and approach.

Understanding The (New) Role of Relationships In Achieving Business Success

A recent international conference brought together senior buying executives, vendors and lawyers from around the world, to discuss solutions to the high rate of initiative failures. According to one study, more than 70% of all business arrangements fail to deliver the expected results.

What were the two key conclusions that came out of the conference in terms of reversing this trend? Building and managing strong relationships is essential to achieving desired outcomes for all stakeholders.

I would personally like to extend to you and your colleagues, an invitation to attend my Fall seminar on November 25th and 26th, 2015 on Relational Contracting and Strategic Relationships Management.

Held at the Courtyard Marriott in Downtown Toronto, this highly interactive and engaging 2-day seminar will equip participants with the know-how and skills to:

  • Gain a total system understanding of collaborative business relationships with an emphasis on outcome realization and change management;
  • Plan, source, establish, manage and participate in high performing collaborative business relationships;
  • Improve the performance of current arrangements such as MOUs, Agreements and Contracts; and
  • Establish the relationships & vendor management organization, and build its capacity to create a culture of collaboration and trust.

Discussions will cover two important classes of relationships:

  • Client-Vendor Relationships such as operations management arrangements, Alternative Service Delivery (ASD), Public-Private Partnerships (PPP), Commissioning, Outsourcing, Futuresourcing™, Major Capital Projects, and In Service Support (ISS) contracts; and
  • Intra-Public Sector Relationships such as Shared Services arrangements, Program Owner-Provider relationships, Transfer Payments and Intra-Municipal Agreements.

Please feel free to contact me with any questions you may have.

See you in Toronto!

Andy Akrouche