An insider’s guide to powerful partnerships
By Rodger Manning, CPP APMP
Successful partnerships between Defence primes and Australian SMEs are central to delivering across the Commonwealth’s five strategic objectives within the 2018 Defence Industrial Capability Plan. Interestingly, just like our personal relationships, the pillars supporting the strength and success of these partnerships are often founded early on.
The old adage that people work with people they know, like and trust stands equally true in the complex world of Defence. With this in mind, it’s helpful to reflect on human nature and what behaviours contributed to the cementing of bonds during the early stages of our life partner relationships.
Drawing on this analogy, coupled with our position of observing the early days of hundreds of relationships between tender partners, we offer the following advice to SMEs and primes alike.
How SMEs can better engage with large companies
1. Be in it for the right reasons
The good news is that primes want and encourage engagement with SMEs – their doors are open. However, it’s important that SMEs establish a relationship with primes for the right reasons – first and foremost that they have strong, relevant capabilities that are of benefit to the prime and Defence.
A strategic intent to diversify into Defence is sound, but if the primary driver is simply trying to find an easy way to grow business, then Defence is likely not the answer.
2. Get noticed, but don’t make conversations all about you
Getting noticed starts with understanding what’s important for the primes you are engaging with.
A common trait we observe is that SMEs often revert to a comfort zone of talking about themselves in broad and general terms. The focus is on themselves, not their potential client. Capability statements masquerading as quad charts are symptomatic of this approach.
If you need support to understand what is important, ask questions, listen and pursue meaningful engagement with organisations such as AIDN and CDIC.
3. Be responsive but patient
Being responsive demonstrates that you value the relationship and will be a partner they can trust. If you are requested to provide information or a proposal during a tender open period, make sure you provide this when asked – or even sooner if you can. Preparing Defence tenders is an incredibly busy and demanding process and we regularly observe the frustration and impact of waiting on inputs from industry partners.
On the flip side, please be patient. Primes are large companies and typically have complex governance and due diligence requirements. They are often not set up to make quick decisions – but delays don’t necessarily mean ‘no’.
4. Share and be open
SMEs have specialist skills, knowledge and experience that are of incredible value. Share expertise and ideas relevant to the opportunity in hand. One of the benefits Commonwealth policy seeks to unlock from SME engagement in Defence projects is greater innovation. A collaborative mindset from the outset can make this a reality. We understand that protecting IP and know-how may be front of mind, but open and fearless discussions protected by confidentiality agreements help found strong and trusted relationships.
It’s also important to realise that opportunities for SMEs within major projects can exist at multiple levels. So, if a prime introduces you to their partners or another member of their supply chain, this is not a rejection – they just want to help you build a relationship at the right level for your business.
How large companies can better engage with SMEs
1. Be open and approachable
Judging by the level of industry engagement at project-based events, this is an area where it feels that large companies have really listened. In contrast, events that consist of a briefing and short question and answer session, followed by an invitation to register interest in an online portal smacks of a compliance task designed solely to ‘tick the industry engagement box’.
Initial industry engagement can be strengthened through attention to the smaller details.
For example; selecting sincere and welcoming presenters, providing opportunity for one-on-ones with senior representatives, being precise about what you want from industry and providing clear guidance on your processes for pre-qualification and selection. Consider personal points of contact rather than a generic email address.
2. Be considerate
SMEs want your business – but don’t take undue advantage of that. Instead, be considerate and act in a way that promotes a genuine partnership rather than a transactional relationship.
In the early days, this may mean not seeking to pass inappropriate conditions and risk onto SMEs. Provide reasonable timescales for them to respond to your requests. Remember that the people you are dealing with often have multiple day jobs. And offer reasonable payment terms, certainly no more than 30 days.
3. Make time to understand them
A genuine partnership is one where both parties have a strong understanding of each other. Make time to get to know their business, their people, their goals.
In turn, this will encourage SMEs to be more open and strategic in their conversations with you, serving as a great catalyst for innovation. Importantly, remember that their benefits help build your competitive advantage. Accordingly, knowing what working for you means for them will help crystallise and quantify specific economic benefits for your AIC strategies.
4. Your other relationships matter
Your track record counts – delivering on previous commitments builds trust and credibility in the eyes of prospective suppliers. Developing such a reputation will ensure that the best SMEs in Australia will want to work with you.
It’s also very likely you have relationships across a much broader cross-section of Australian industry than SMEs, so be generous and look for opportunities to make beneficial connections on behalf of others. Be proactive in joining these dots and making the introductions.
Two sides to every partnership
Over many years, we’ve had the privilege of watching the formation of many successful tendering relationships between primes and SMEs.
And without doubt, as it is with human relationships, the strongest and most meaningful occur when each partner pauses to consider the perspective of the other.
Whether a prime or SME, the application of this simple piece of advice will result in you forging powerful partnerships for you, Defence and Australian industry.