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What is quality management? I have a simple and straightforward answer to this question. Quality management means meeting the requirements of all parties who have an interest in your business – interested parties who have invested in your business, your customers, business partners and regulators.
ISO standards are the result of best practices that ISO member states bring together in one place to help others learn from their experience and avoid reinventing the wheel. It is not devoted to quality management in the manufacturing sector, as many assume. ISO's role is to manage knowledge through the flow of best practices already undertaken by its member states. These best practices are available in all sectors, including what I will discuss in this article: collaborative business relationships, or ISO 44001.
Related: How to harness the strategic power of collaboration in your business
What is ISO 44001?
ISO 44001 is based on best practices that serve as a basis for training cooperative business relationshipsif you are an entrepreneur, an SME or a public sector and government agency. However, as I said, you should see it as a baseline, and no doubt it should be adapted to the context of your business.
ISO 44001 is a management system. The word “system” should be emphasized here. What is a management system or a systematic approach to management? I have another simple and straightforward answer: A systematic approach to management means acting according to predetermined processes. In other words, when you have a system implemented in your business, it doesn't matter who, what or when – everyone must follow predefined processes at all times. You may ask, “What about specific situations?” Even in specific situations, people will follow predetermined processes designed for those particular scenarios.
The result of the application of ISO 44001 requirements standards is a series of processes that must be followed in the formation of a cooperative relationship, such as a joint venture – from determining which operations are best performed together with other businesses to a controlled exit from the partnership.
How to start a business partnership
Now, I want to give knowledge about starting cooperative business relations in accordance with the requirements standard ISO 44001, but in a completely simplified way. Of course, a full understanding of the standard would require several books, let alone an article.
Identify and define value-added opportunities
In the first step, you need to define and define the value-added opportunities that can be achieved through collaborative work. Collaborative work means identifying capacities and skills that can complement each other. Sometimes, you have capacities that need to be enabled by a collaborative partner who can use their skills by leveraging your capacities. In another scenario, you may have abilities that require additional capacities beyond your own to be fully utilized. When you determine your unused capacity or skills, you will be able to determine the scope of work that can add value if executed in a collaborative relationship. This defines BORDERS of your collaborative work.
Why do you need to define boundaries for the work to be done collaboratively? The point is that you enter into collaborative work when you have a goal that is beyond your capacities and abilities. It is essential that you first use your skills based on your capacity to maintain your stamina. Then, if you find unused capacity or skills that need to be filled by others to create value, you can define the scope of joint work outside of your stable operations. Be careful that collaborative work does not interfere with your stable operations. Your stable operations should not be affected by potential failure of your collaborative efforts.
Related: Most Business Partnerships Fail – 5 Hacks to Make Sure Yours Stays Intact
Define your goals and how you plan to achieve them
Next, what are the defined work objectives that can be accomplished in a collaborative relationship and what is your plan to achieve them? You are focusing on a specific product (goods or services) that is beyond your current skills or capacity and requires complementary relationships to be realized. The target of your collaborative work is this product. You need to plan for a business that brings your established product as a result. This plan demonstrates all business requirements and clearly shows your contribution and commitment based on your unused capacities or skills. It also describes what must be contributed by others through a collaborative business relationship to complement yours and create value.
When it becomes clear what you want to achieve and what capacities or skills you have that will enable your business case, then you will be able to identify the criteria that your collaborative partner needs to fulfill in order to complement you.
Prepare for negotiations
Then, you will enter the negotiations with potential collaborative partners that match your defined criteria. The business leaders you are negotiating with must have the same level of understanding as you do about what is going to happen. You are driven by your ideas to enter into a new business venture because your ideas reflect your decision-making drivers. Being well prepared for negotiations means understanding the decision-making drivers of your potential partners.
or good relations it is one that creates value for all stakeholders based on what “value” means to them. So do plenty of homework to understand what “value” means to your potential partners.
Determine risk ownership
As you determine what each party will contribute and take away from the relationship, you must clearly define risk ownership. Risk must be distributed among the collaborative partners based on their responsibilities, which are determined by the capacities or skills they contribute to the relationship.
Exit strategy
Finally, you need a clear exit strategy for the disengagement phase. Collaborative relationships should have a predetermined end time based on the objectives the collaborative work will achieve. Most importantly, there should be a predefined series of exit triggers in case of one unsuccessful work experience or unfulfilled expectations of cooperating parties. In any case, whether termination is due to successful completion or failure, all parties must clearly know who owns what. Everything from tangible or intangible assets to liabilities should have a default owner based on the business case and risk ownership.