The Last Essay on Partnership

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The Last Essay on Partnership

by Robert L. Fitzpatrick
NAGASA Strategic Advisor

Ever since the term "Partnership" was introduced to the graphic arts dealer community about eight years ago, I have been writing and speaking about it. In so doing, I have gained a unique education and expertise in manufacturer/dealer relations. With nearly a decade of description, discussion and distinction on Partnership, this will be my final essay on the subject of Partnership as a theory, an ideal, and management philosophy.

The industry has finally moved to a new era in which some manufacturers and dealers are in fact engaging in Partnership. They have made a fundamental break from past thinking and policy. They are taking significant actions within their companies to implement Partnership. It is not an easy process. Like any important new venture, it includes breakthroughs, successes, and failures. There is a learning curve.

The point is, however, that, after this essay, discussion must move on to how Partnership is working. The spotlight must leave behind those portions of the industry where no significant reinvention is taking place, where Partnership is still only a public relations concept, and where no discernible change can be recognized. The discussion must proceed to a new level in order to assist dealers and manufacturers who need to recognize where Partnership is reality and where it is talk. Like so many other aspects of American business and American culture, we are so cluttered with meaningless talk, highly sophisticated PR and advertising, professional spin doctors, and over-saturation of words and images, the distinctions between fact and fiction can be easily lost.

Either Partnership is a viable business concept, or it is not. Some companies have concluded that it is a critical new philosophy that must be incorporated into every aspect of their operations. The assertion of this essay and of articles that I have written in THE EAGLE and elsewhere is that Partnership is a mandatory business response to a radically changing industry.

In sorting through the muddle of theory and words, I have spent much of the last eight years writing about what Partnership is not. This was necessary because, even in the new world of images, words still have enormous power over our lives. When they are misused, people can be terribly misled, especially in business. When a word is applied to one thing when something else quite different is taking place, not only do errors occur, but communication for the future is destroyed. People no longer listen. They stop believing. Eventually relationships and trust end.

In graphic arts, Partnership became for a time the most misused, and abused term in the industry. In the first place, a dealer/manufacturer relationship is not in the legal sense a Partnership at all. It is a collaborative relationship between two separate and independent entities. Partnership in business normally refers to a single business entity that includes two participants. So "Partnership" was, and remains today, an inexact term.

But inexactness was never the problem. It was fundamental misuse that was doing the damage. In too many cases, the term Partnership was used to mean only one thing-more sales. It was part of an old philosophy that ignores relationship and goes directly to the final product-sales-and in as short a time as possible. In dealer offices across the country, manufacturer sales managers officially announced, "We're Partners now!" When the dealers asked what this meant, they were told they could expect sales to increase by 10% a year from now on. In truth, many of the manufacturer sales reps themselves did not know what was really meant by the word. They, even before the dealers, realized that the term was only a euphemistic sales directive.

Dealers have lived with this thinking for several generations. When they sensed that this new term, Partnership, only meant "give us more sales," many of them simply stopped listening Now, what was wrong with using the new word, Partnership, to mean the very old idea of "give us more sales?" After all, advertising and public relations continuously invent new ways of saying the same old things? Well, actually, it would have been perfectly all right, to use Partnership only in the rhetorical, not realistic, sense, except for one predominating fact. The industry had profoundly changed.

New global competition, overcapacity, new digital technology, diminished product differentiation, new and stricter environmental regulation, smaller profit margins-these fundamental changes in business require fundamental changes in how to do business. Partnership, like Total Quality Management, has become a survival necessity for these reasons:

In the new industry environment frequent, candid and two-way communication is absolutely necessary. The life cycle of products is shrinking. The life cycles of information and market conditions are even shorter. Bulletins, traditional advisory committees, and an occasional sales booster meeting are insufficient in today's market. Partnership is necessary to provide a means for a continuous two-way exchange of critical business and market information matched to today's business realities.

The increased competition and the smaller profit margins necessitate manufacturers and dealers to eliminate all redundancies in their operations. Neither dealer nor manufacturer can afford to waste resources, capital or personnel on any part of its operation that could more efficiently be done by the other. To accomplish this elimination of redundancies requires close collaboration between dealer and manufacturer. Partnership is therefore the necessary means for accomplishing this mandatory restructuring of operations.

Several manufacturers have recently invested the time personnel and energy to set up on-going dealer/manufacturer groups to address every phase of their businesses together. AGFA calls them Vision in Progress Teams. Fuji Photo calls them Process Improvement Teams. These types of structures are costly and time-consuming to design and organize.

Yet they fulfill the need today for implementing Partnership.

Their return on investment is extraordinary.

The new types of collaborative groups are a total break from that past thinking and experience. First of all, they are in fact teams. They include dealers and top managers of the manufacturers. The Teams are ongoing, meeting several times a year. Written reports and surveys communicate the vision and actions of the teams to the full dealer network and manufacturer's sales organization.

As I mentioned, for much of the last eight years I have written and spoken about what Partnership is not. Now that we are gaining some experience with it we can concentrate on what Partnership is. There are some basic ingredients I have found be the critical components of authentic and workable partnering relations. These include:

• Distributor participation in goal setting and policy making
• The Distributor is viewed by the manufacturer as an "equal"
• Collaborative selling
• Establishment of mutual, long term and short term goals
• Direct Communication: Beyond Advisory Boards and Line Committees
• Sharing of information and expertise
• Mutual Candor, Loyalty, Empowerment

To position themselves for the future, we have all seen companies make seemingly the right structural changes in their organizations only to discover that in fact nothing has changed. The same old inherent problems limiting their growth and vision persist. When this is realized, more restructuring is ordered. In this vicious circle, top managers are driven off, middle managers flee to the security of competitors, and field staff are left confused and demoralized. The folly of this experience is that results were sought only in structure, not in process. The preoccupation was with things, not people.

Partnership works like this also. Partnership is a day to day process. It is not just an off the shelf program or agenda. The process requires four qualities. If any one of the four are absent, Partnership activity becomes an empty shell, an exercise that makes no significant difference. These elements cannot be created or designed in the structure. They are literally brought to the table by the participants. When these factors are present in a properly structured program, the extraordinary benefits of Partnership can be realized. They include:

Major manufacturers can design programs, organize conferences, publish newsletters and have all the very best of intentions. Dealers can reduce lines, and develop close friendships with individual manufacturer sales managers. Those actions alone will not make Partnership. Partnership is created over time by each of the participants investing in trust, vision, ownership and accountability. The process looks something like this:

1. Telling the truth about the current culture

• Telling the truth about the current culture
• Acknowledging what works and what doesn't
• Saying what is never said, yet always believed

2. OWNERSHIP

• Taking "ownership" of how it is now
• Giving up blame
• Discovering power within current circumstances
• Respecting the grip that the past has over the present
• Acknowledging the certainty of uncertainty

3. VISION

• Designing the future
• Expressing hopes, values, needs
• Setting "impossible" goals

4. ACCOUNTABILITY

• Making promises
• Establishing "mile markers"
• New commitments and new expectations

Imagine how much would be achieved if the truth were literally told between dealers and manufacturers, and if blame were precluded and full ownership assumed for all current conditions! What could be accomplished if accountability replaced intimidation and evasiveness?

And, conversely, consider how much productivity and profits are lost because the truth is not told, blame and intimidation are constantly present, and mistrust and even sabotage pervades the distribution chain.

Without Partnership, no exciting goals can be imagined. With Partnership "impossible" goals can be envisioned and attained. The power of Partnership multiples capabilities. Without it, dealers stay in a perpetual holding pattern, guarding current positions, never daring to expose themselves to risk. With untrustworthy business associates, no prudent businessperson ventures too far from home base.

The benefits and advantages of transforming the old relationships that have characterized dealer sales are enormous. Manufacturers who are committed to long term futures in the graphic arts industry are now in a race to win the trust and loyalty of the industry's key dealers. Companies who have never worked with graphic arts dealers are now studying the channel and its fundamental relationship problems. They see that the dealers are hungry for reliable business partners. A properly structured program with a partnership philosophy will attract the industry's best and brightest dealers, notwithstanding their long time sales of traditional suppliers' products.

The initiative to develop Partnership must necessarily come from the manufacturer, but the power to make it a success or failure rests fully in the hands of the dealers. Most dealers maintain a doubtful and canny posture. Twenty-five years of industry experience in which Partnership has not been even a concept, and a system of multiple dealerships that diminishes loyalty and commitment do not easily wash away. Even when sincere overtures are made, many dealers hear the new words, but see only old faces. They hear the new ideas but continue to think old thoughts. No matter what is presented, they see what they have always seen.

To assure you of the value of Partnership, I wish I could offer a guarantee. I cannot. No one can. Beware of anyone who does. There are risks and liabilities. What is clear, however, is that old thinking and old ways of doing business have reached a dead-end. A new way must be found.

To step out of the old system into the new, requires literally adopting new vision and a new way of thinking. See the illustrations on the next page for "Seeing A New Way."

A small illustration makes the point. You are asked to solve a small riddle. Draw four continuous, connected straight lines through the nine dots without lifting your pencil from the paper.

Traditional thinking will fail to solve this riddle by restricting itself inside an imaginary "box." The solution requires that we break out of the mental box we normally draw around the dots. The solution inquires that we break out of the mental box we normally draw around the dots.

There is no box. We are free to draw a line outside the perimeter. To do so requires going outside our usual frame of reference. Engaging in a Partnering relationship will require that kind of nontraditional thinking.