Soundview Executive Book Summary, "FINDING ALLIES, BUILDING ALLIANCES: 8 Elements that Bring - and Keep - People Together"

by Mike Leavitt and Rich McKeown

Subject Area: Leadership

THE SUMMARY IN BRIEF

The challenges facing your organization extend far beyond your employees and your business. From the competitors within your industry to the regulators outside, solving large issues in today's complex world requires cooperation among diverse stakeholders. Solutions to even the most complicated problems are attainable for leaders who learn how to turn competitors into collaborators.

Finding Allies, Building Alliances is a guide for anyone tasked with fostering and maintaining an effective, productive and collaborative venture. The first step is to carefully choose a network of participants that will become a powerful alliance. With the right team in place, a framework of eight elements will help your group work together for the mutual benefit of all parties.

Mike Leavitt and Rich McKeown base this framework on their distinguished work building collaborative networks both in government and in the private sector. Their unique and proven methodology will not only generate lasting solutions for any business issue but also boost competitiveness and resilience in all sectors.

Whether you're launching a new partnership or rehabilitating one already in progress, Finding Allies, Building Alliances will help you find workable solutions to even the most complex problems.

IN THIS SUMMARY, YOU WILL LEARN:

The benefits and key elements of a value alliance.
The differences between conveners and leaders.
The importance of finding representatives of substance.
How to brand your alliance as a "northbound train."
How to recognize and use collaborative intelligence.

INTRODUCTION
Today, competing global economies engage in contests to produce the best value -- the best product or service at the lowest cost. The old models -- huge, bureaucratic and singular -- are increasingly disadvantaged, as they are unable to provide the value, speed and innovation people need. Collaborative alliances or networks, however, can do so. The best of them open new frontiers of productivity, and perhaps even more important, they're able to solve challenging problems that single entities cannot crack. A diverse alliance, well led and well managed, can bring resources to bear on a problem that no organization can match.

Technology makes collaboration feasible, connecting diverse organizations and individuals around the world. The sociology of collaboration, though, is the tricky part of the equation. Connecting people, unlike connecting networks, is much more art than science. Assembling a diverse group of individuals and organizations, facilitating their work together, and sustaining it long enough to get the job done is an ambitious goal -- but it is a more achievable goal if eight key elements are present.

A common pain: A shared problem that motivates people and groups to work together in ways that could otherwise seem counterintuitive.
A convener of stature: A respected and influential presence who can bring people to the table and, when necessary, keep them there.
Representatives of substance: A group of collaborative participants who bring the right mix of experience and expertise for legitimacy, along with the authority to make decisions.
Committed leaders: Individuals who possess the skill, creativity, dedication and tenacity to move an alliance forward even when it hits the inevitable rough patches.
A clearly defined purpose: A driving idea that keeps people on task rather than being sidetracked by complexity, ambiguity, and other alternatives or distractions.
A formal charter: A set of established rules that create stability and help resolve differences and avoid stalemates.
The northbound train: An intuitive confidence that an alliance will get to its destination and achieve something of unique value and that those who aren't on board will be disadvantaged.
A common information base: A shared pool of information that keeps everyone in the loop and avoids divisive secrets and opaqueness.

Creating or joining a value alliance should be every leader's goal. To achieve this goal, though, you need to understand what a value alliance is and how it can confer competitive advantage on its members.

THE COLLABORATIVE FOUNDATION: WHAT IT IS AND WHY IT'S ESSENTIAL TODAY

Any organization seeking to increase the efficiency of its problem-solving efforts needs to understand the foundational concept of a value alliance. A value alliance is a group of participants with aligned interests pursuing an outcome with value for each of them. It is a formally organized entity following a process that has been deliberately designed to achieve a collective advantage. In such an alliance, the pursuit of value is the purpose, and alliance is the platform. Collaboration is the means.

While value alliances can be formed in pursuit of joint opportunity, they most often coalesce in response to a complex but common problem. Once groups get past the initial challenge of dealing with the tough issues, they begin to realize that they're not just eliminating a negative; they're also capitalizing on a positive. In collaborative terms, this simply means that when organizations come together to solve a complex problem, they may well discover that it is an opportunity in disguise.

It turns out that even bitter competitors can work together and achieve a goal that benefits all participants. Five key traits exist in every value alliance. Collaborative efforts often lack one or more of these traits, and their absence hampers the group's effectiveness from its inception. Therefore, before embarking on any formal collaboration, make sure these traits are in place:

Multiple interests. While multiple interests can create tension in a value alliance, they also produce creative conflict along with a range of resources and perspectives.
Self interest. Self-interest is what drives participants to work long and hard and, with multiple parties, to come up with solutions.
An incremental surrender of independence. From a psychological perspective, a shift from independence to mutual dependence is necessary, or participants will engage in power politics that will destroy the alliance.
A free-standing governance process. Executives operate with no strings attached (to their other companies). The executive committee makes decisions on its own and not in consultation with the participants' other employers.
Value that continues. It doesn't matter whether the value alliance is temporary or permanent. Its benefits are ongoing. If it solves one problem, the value of that solution continues long after the value alliance dissolves. And permanent value alliances provide a series of solutions year after year.

The Value of a Value Alliance Today

Since the 1990s, the world has experienced a confluence of new economic forces. In this environment, people and organizations no longer have the luxury of inefficiency. No one can afford to operate slowly or at a financial disadvantage globally. With these new financial parameters, efficiency has become a matter of survival.

The problems facing organizations today have become so complex that it's unrealistic to expect any single company -- even one as large and dynamic as General Electric, Wal- Mart or IBM -- to solve them on its own. When affected parties collaboratively gang up on complex problems, value alliances produce superior results for at least four reasons:

Multiple perspectives provide a more complete picture of a problem, creating more options, synergies and solutions.
Trust produces efficiency.
Shared investment and reduced litigation help limit financial risk.
Speed improves when agreed-upon standards reduce friction.

A COMMON PAIN

When people are motivated by their own problems, they often discover that they can find solutions to them by responding to the interests of others. Value alliances, therefore, exist at the intersection of self-interest and common interest. Typically, individuals become collaborators when they realize that they cannot solve a problem on their own.

While a collaboration can seek to capture an opportunity, success is most likely when the motivator for an alliance is shared pain that requires mutual action to bring about relief. Pain is the catalyst that helps people overcome their natural distrust of outsiders.

Three Types of Motivation

Common pain drives people to collaborative groups for three reasons:

Fear. The calculation or feeling that the odds are too high that something unacceptable will take place.
Greed. The calculation that people will make more by collaborating with others than by going it alone.
Touch the hand of greatness. This phrase is used to suggest that people are motivated by being part of noble and influential undertakings.

All three of these factors may be active in the formation of any value alliance, but fear is the primary catalyst. In the business world, little motivation exists to form a value alliance when profits are high and the status quo seems likely to maintain itself. When change strikes, however, leaders feel a motivating and intuitive anxiety about growing problems or missed opportunities.

The Common Pain Index

Measuring the pain felt by essential collaborators is a litmus test of how committed the key parties will be to a shared effort. The more intense and widespread the pain, the more firm the commitment. The Common Pain Index can help you gauge pain in your organization as well as in prospective collaborators.

Assign yourself a numerical value between 1 and 10 for each of the following factors (10 being the highest pain), and then average the total:

Significance of the problem. What is the impact of the problem on an enterprise's success? A problem must cause significant pain for an enterprise, or its people will not give up the independence and control that collaboration requires.
Dependence on others. A problem is not particularly painful if you believe you can solve it through your own resources. Even if the pain is significant, you are going to be reluctant to cede control to others to solve it if you are confident you can handle it on your own. Leaders of enterprise need compelling reasons to cooperate with others.
Relative influence. Influence is the trickiest factor in that you must assess not only the importance of your own involvement to the collaboration but that of others as well. Not all collaborators are equal. If they won't come to the table, then the pain level could be too low.

Score each participant on a scale of 1 to 10. A score of 8 to 10 indicates intense common pain; four to 7 suggests significant pain; three and below implies tolerable pain. Look at the scores as a whole, and make a determination of whether you believe this proposed alliance passes the common pain test -- and be sure to factor your own score into the mix.

A CONVENER OF STATURE

At its core, a value alliance requires a convening power: someone with the stature to bring together a group of independent parties and have them work in an aligned way to create something of value. While common pain may provide the motivation for various groups to participate in a collaboration, they still need a convener of stature to capitalize on that motivation, providing credibility and cohesion.

What Makes a Convener of Stature?

Conveners of stature can have three forms: an individual, an organization, or a combination of individuals and organizations.

Combinations are sometimes necessary to secure participation from a critical mass of groups that a single convener couldn't secure alone. For instance, in his work on the Clinton Health Access Initiative, President Clinton co-convened various efforts in Africa with the administrators of local hospital districts because their stature had greater resonance in those remote areas.

At times, organizations are more effective conveners than individuals. A variety of organizational types -- a company, a trade group, a community-based entity, a think tank -- can use organizational structure and reputation to provide convening power to solve complex problems. For instance, a local PTA convenes leaders from various parts of the community to combat the growing problem of gang violence.

In some instances, multiple organizations can act as conveners. A few insurance companies, two hospitals, a large medical clinic, a long-term care facility and a local community health organization all helped convene a value alliance that established a more efficient way to manage patient care in their community.

Seven Essential Qualities

Conveners may have very different personalities and leadership styles and may be either individuals or organizations. Nonetheless, the most effective ones share seven traits:

Trusted brand. Prospective conveners, whether individuals or organizations, come to the task with a personal brand -- a reputation that defines expectations of potential participants. For successful conveners, this brand must include fairness - - the reputation for being even-handed and honest in their dealings with employees, the community, competitors and others.
Relevant reach. When conveners recognize intuitively or through investigation that their influence is too limited to get the value alliance going on their own, they may wish to partner with another convener (an individual or organization) to fill in the gaps in their influence.
Adequate independence. Those who come to a collaboration with a solution that benefits their own company far more than other collaborators will not be viewed as credible. Similarly, those who are seen as being beholden to special interests or as having a reputation for favoring one group over another will lack the independent stature necessary to be effective conveners.
Diplomatic skill. Because the main function of conveners is to bring the right parties to the table, they must be proficient in the art of diplomacy. Perhaps most important of all, conveners must gain contingent agreements among separate parties to join the collaborative entity and then bring them together into a functional whole.
Instinct for stage setting. A sense of stage management also comes in handy for conveners in need of a dramatic demonstration of the importance of the alliance. Sometimes using a prestigious setting to make an invitation does the job.
Astute perception. Whether by intuition, instinct or a learned skill, conveners need to be perceptive of what motivates people to participate in an alliance of people or entities.
Ability to apply pressure. The convener of a value alliance sometimes needs to skillfully apply action-motivating pressure to clarify and create the reality of the common pain strong enough to make collaboration an attractive alternative.

Five Responsibilities of a Convener

Convening a group of people to create value collectively is an act of leadership. Conveners must complete the following tasks:

Define the problem and consequences of inaction contrasted with what the value alliance aspires to accomplish.
Organize a structure that furnishes the alliance with people, perspectives and an orderly method of operation.
Create a system of accountability.
Mold a culture of productivity.
Recognize good performance and respond to poor behavior.

REPRESENTATIVES OF SUBSTANCE

The top priority for conveners is identifying the right people and securing their participation in a value alliance. Finding the right ensemble of people -- individuals with talents that blend well -- is essential. We refer to participants in a value alliance as representatives of substance. As a group, they need to possess the collective influence in the marketplace of ideas to bring about a solution to a shared problem. We look for participants who possess at least one and ideally all three varieties of substance: authoritative, cognitive and reputational.

People with authoritative substance possess the legal capacity to make or influence decisions on behalf of their organizations. Cognitive substance involves special knowledge that is sometimes needed to understand the implications of certain alliance issues. This may include scientific understanding or a working knowledge of process. Reputational substance suggests those for whom respect is more important than likeability or collaborative intelligence. Such representatives often hold strong views that may be controversial or unique.

Observing the Representatives in Action

Sometimes substance can be an illusion. You assume a given individual possesses expertise, then discover that you're wrong. You figure that an organization has many resources that it can lend to a collaborative effort and discover that those resources are already stretched tight.
Observation can play a critical role in reconfiguring the group you recruit for collaboration. For this reason, holding a preliminary meeting of representatives can provide insights that will help you determine if you need to add or subtract members to achieve the right collective substance.
Warning signs to watch for during early meetings include negativity, key functions that aren't being covered, or participants who aren't fully invested in the mission.

COMMITTED LEADERSHIP

Indecisiveness often accompanies collaborative problem solving, and value alliances need clearly designated and committed leaders who will push, pull or cajole progress through the muddle.

Be aware that leadership does not emerge naturally within a collaborative framework. One of two scenarios generally occurs. In the first, no one steps up and takes charge; participants limit their involvement to attending meetings and carrying out definable tasks. In the second, most if not all representatives compete for control of the alliance.

The typical scenario comes closer to the first one, where people want to be in charge during meetings, but their commitment isn't necessarily strong enough to keep them involved and energized between sessions, or when the collaboration encounters roadblocks, or when their regular jobs demand their attention.

In some ways, committed leadership is even more important in value alliances than in established hierarchical organizations. As a new entity, an alliance lacks a history, culture and decision-making structure to facilitate implementation. More important, a new network is generally a collaboration among equals. Lacking a clear pecking order, networks need leaders to step forward and facilitate the decision-making process, and they require leaders who display a flexibility that may not be needed in more traditional corporate structures.

Committed leaders often need to wear a number of hats, use their influence to keep the collaboration together (at least until a problem is solved), and work very, very hard.

The Consensus Question

A value alliance is a powerful instrument for the same reason it is a fragile one -- voluntary participation. If participants ever feel their best interest is served by leaving, they can and will leave. If at any point the consensus tips too far in one direction, a critical mass of participants will withdraw, and the value alliance will quickly die. Yet if committed leaders can consistently achieve consensus, they will move the alliance forward. Finding consensus is an art form that leaders must master.

Think about the collaborative environment as different from the traditional organizational one, and recognize that the role of leader changes somewhat in this environment as they try to stimulate discussion and ensure that all have been heard, rather than making decisions.

A CLEARLY DEFINED PURPOSE

Without a clear, well-defined purpose, collaborations fail or drift into unproductive and endless discussions. More specifically, the collaborations experience "purpose creep" -- an inexorable broadening of scope that eventually makes it impossible to relieve the common pain that drew the group together in the first place or that creates lethally low morale as the collaboration struggles with overly ambitious and varied goals. Without a clearly articulated and written purpose (which will then be incorporated in the formal charter), each representative of substance may define the purpose differently. Unless the real purpose is articulated, memorialized and ratified by the participants, they will all shape it with bias toward their own parochial interests.

To use purpose so that a collaboration becomes a value alliance, you need a guide. Here are seven steps that will help you develop a purpose in a collaborative setting:

Begin with a problem-solving, pain-mitigating mindset.
Frame problems and pain judiciously.
Match purpose to representatives' capabilities.
Create the purpose through discussion and consensus (rather than brainstorming and politicking).
Be flexible in the type of purpose statement you create.
Put the purpose in writing and in participants' consciousness.
Have a process in place to revise or reformulate the purpose.

A FORMAL CHARTER

If participants lack common expectations about how the alliance will go about its business, they are unlikely to accomplish anything. Hence the need for a written charter. A formal charter confers official status on the group and also creates the structure necessary for productivity.
A prerequisite to writing the formal charter is developing a sufficient degree of camaraderie and purpose. Until participants relieve the tension that naturally builds at the beginning of the process, conveners, leaders and representatives of substance will find it difficult to accept a charter.

Creating a formal charter gives participants an opportunity to vent their self-interest and move forward with the greater work of the collaboration. Perhaps as much as anything else, creating and signing a formal charter provides a moral buy-in. The formal charter cements the purpose, creating a moral commitment. Charters function like a combination of bylaws and operating plan.

Here are the matters a charter must address: who the members will be, who the leaders will be or how they will be chosen, how meetings will be called, how decisions will be made, how to make financial arrangements, what time frames are relevant, who is responsible for what tasks, how members share information, what level of confidentiality is acceptable, and how to amend the charter.

THE NORTHBOUND TRAIN

People want to invest their time, money and reputation in things that will make a difference. The phrase "northbound train" is shorthand for "Decisions that matter to me are going to be made, and I need to be there. The train is headed north, and I want a seat on it."

Every value alliance has a brand in the community of interest it serves. That brand is shaped by the degree to which people believe the alliance is a northbound train, likely to reach an important destination. At the same time, conveners and committed leaders need to recognize when that brand is being diminished in any way. What can stall, even kill momentum? In short, failure to meet expectations. Sometimes, participants can point to a particular metric -- a beta test that failed, for instance. In other situations, it's less tangible -- a waning of enthusiasm from both the leaders and participants.

Whatever causes this perceived stall in momentum, it robs the collaboration of energy and sense of mission, and it often spells the beginning of the end if the northbound perception isn't restored.

You can monitor your progress toward creating a northbound train through tangible and intangible means. From a tangible standpoint, assess and determine that you're receiving the resources necessary for the alliance to solve the problem it faces - resources that range from money to equipment to facilities. If your resource levels are at least adequate and at best abundant over a sustained period, then it's likely that the alliance has momentum on its side. Less tangibly, there's a clear sense of purpose and optimism surrounding the alliance. This sense of a northbound train is a hallmark of a value alliance, and it's what can sustain the collaboration over the rough patches and provide the momentum to implement its problem-solving plan.

DEFINING COMMON GROUND

Defining common ground, the eighth and final element of a value alliance, is often a predictor of success. To function effectively, the parties need to develop trust in each other and the processes that govern them. Achieving trust requires an unusual degree of transparency as the parties determine the underlying assumptions, sources of information and standards upon which they will rely. Effective collaboration requires that these be part of a common information base, permitting everyone the chance to operate with the same information.

When a convener and committed leader identify common linchpin issues involving assumptions, standards, and sources and resolve them early, the chances of alliance success increase dramatically. Among other advantages, such early resolution is a strong indication that participants are willing to work collaboratively to solve problems.

Mitigating Disagreement

When an alliance cannot reach consensus or near consensus on a critical assumption, source or standard, the leader must find a way to move the alliance forward. When disagreement exists over assumptions, sources or standards, the momentum diminishes. If this lack of commonality isn't addressed, the alliance will probably topple.

Here are some techniques to regain momentum in the face of disagreement:

Operate on a non-consensus majority. In the absence of consensus or near consensus, the leader can simply move forward (rather than stay mired in momentum-killing disagreement). Acknowledge the objection of dissenters, making it clear to them that the alliance can revisit the issue as new ideas or options come on the table.
Allow the convener or another trusted third party to decide. In situations where the alliance is divided among multiple options, the leader can propose that the convener be asked to make a decision, thus enabling the work to go forward.
Put together a blended decision. Sometimes it is possible to integrate input from differing participants to achieve acceptable assumptions, standards and sources.
Operate in a range. This means that you regain momentum by agreeing to a range of acceptable standards with an understanding that a more precise decision will have to be made in the future.
Hold a focused session to reengineer the problem. Sometimes, representatives disagree about an assumption, standard or source because of misunderstanding or bias. Through a facilitated discussion, people can view the problem differently and understand it better, or they can recognize how their unconscious bias is causing them to resist agreement on commonalities.
Strike a grand bargain. Here, the leader's strategy is to foster agreement by finding a way to reposition an assumption, standard or source so that it makes concessions to both sides in a dispute. When each side gets something they want, it is easier for them to accept something they initially didn't want.

COLLABORATIVE INTELLIGENCE

Not everyone has a natural aptitude or appetite for collaborative problem solving. Though effective collaboration requires a skill that can be learned and improved, some people are naturally better at collaboration than others.

Alliance success is threatened when the wrong people -- those lacking collaborative intelligence (CI) -- participate. CI, the ability to work productively together for a common goal, is a critical ingredient for successful value alliances. If an alliance possesses a sufficiently high level of CI, it can overcome participants' natural resistance to ceding control to an independent entity, and it can facilitate productive interactions among diverse individuals and organizations.

It's not just the capacity of one individual that matters, but the collective CI of the group. Invariably, a diverse group will possess representatives with varying degrees of CI. Therefore, your assessment of CI needs to focus on the whole rather than the parts. You need to look at the collective CI of the group and determine if it's sufficient to solve the complex problem the group has been convened to address.

This factor is key to determining if you should become involved in building or joining an alliance. Increasingly, the world is organizing itself into collaborative networks as a means of achieving competitiveness. In the future, success will be defined by the collaborative alliances you form or join. Participation in an alliance is an investment decision because it allocates your resources, including time, money and people. Not every alliance is worth your time and effort, so you need to be astute in your assessment.

What Does Collective Collaborative Intelligence Look Like?

In environments where high CI exists, people react differently to common work situations. For instance, when low-CI work groups face a crisis, failure or serious problem, people tend to react with cynicism, negativity and blaming. In a high-CI group, the typical reaction is increased productivity. This group understands that the solution to the problem resides in applying their collective knowledge and skills to help each other work toward a solution, and that means that problems or setbacks catalyze a greater output of energy and effort. Another characteristic of collectively high CI is that people share ideas and information all along the way, not just at the end. Doing so helps the group work more productively and with less friction.

Low-CI people hoard information for a number of reasons. If they're in a group with competitors, they fear what their competitors will do with the information they share.
Information hoarding often prevents the group from functioning effectively.

An effective collaborative group works smoothly in the face of tension between self- interest and the interest of the group. Don't assume that when you see a gathering of high-CI individuals you're viewing an altruistic, self-sacrificing group. What's distinctive is that they are sufficiently solution-oriented that they overcome their reluctance to share information, ideas and resources with outsiders. They reach across the aisle and initiate discussions, volunteer assistance and listen receptively.

ALLIANCE ENTERPRISES

Value alliances are created to solve problems, so logic suggests that when a problem is solved, the need for the value alliance is gone. In some instances, the value alliance dissolves even when the problem isn't completely solved but the common pain has eased sufficiently. In other instances, it ends when the problem has changed in scope and type and requires a new value alliance. And in still other situations, the collaboration closes up shop because the problem has proved too intractable for participants to resolve.

Some value alliances, however, put down roots. We call these long-term arrangements alliance enterprises. People or organizations band together to ease the common pain, then recognize that the new network is better than any of them at solving a range of present and emerging problems.

Three characteristics differentiate permanent alliances from temporary ones: legal status, business model and self-perpetuation corporate governance. These characteristics don't necessarily make alliance enterprises better than value alliances, but they do make them better suited to certain groups in certain situations.

A Time for Great Collaborations

The opportunities to collaborate are numerous and multiplying, but capitalizing on them requires reliance on a structured and disciplined methodology. Collaboration is a skill or competency that can be improved with study, practice and experience. Current business environments dictate that now is the time when honing this skill is essential. Good collaboration is not a casual undertaking. It requires effort, leadership, structure, process and commitment.

The Authors

Mike Leavitt served as governor of Utah for three terms and then as secretary of Health and Human Services and administrator of the Environmental Protection Agency in the cabinet of President George W. Bush. A seasoned diplomat, he has led U.S. delegations to more than 50 countries, conducting negotiations on matters related to health, the environment and trade.

Rich McKeown is cofounder, president and CEO of Leavitt Partners, which advises clients in the health care and food safety sectors. Before serving as chief of staff during Leavitt's terms as governor of Utah, administrator of the EPA and secretary of HHS, McKeown was an educator, a lawyer and a mediator.