The benefits of collaboration are widely recognized by researchers and practitioners alike. However, some bad practices can sometimes challenge co-innovation efforts with strategic suppliers and limit the beneficial effects of the partnership.
By Hugues Poissonnier (Grenoble Ecole de Management), Oihab Allal-Chérif (NEOMA Business School) and Marie-Anne Le Dain (Grenoble INP-UGA)
Vertical cooperation between buyers and suppliers supports the creation of crisis-resistant innovation ecosystems. Cooperation, horizontal collaboration between competitors, enables economic, social and environmental value to be developed. These cooperative practices therefore develop based on shared values, complementary skills and resources, and converging economic interests.
When the common desire is to create lasting value through co-innovation, the dominant nature and control obsession of buyers often prevails. Sometimes they express an unsustainable level of demands on suppliers without respecting their own commitments. Through paradoxically aggressive or lax behavior, buyers may unwittingly sabotage their own supplier integration and development efforts. Our research therefore focused on the key success factors of buyer-supplier collaboration in the context of innovation. We mobilize Herzberg’s two-factor theory to demonstrate the key role of respect and sharing in this collaborative relationship.
Transposing Herzberg’s “two factor” theory.
In the 1950s, psychologist Frederick Herzberg developed the “two-factor” theory, according to which employees’ work motivation is the result of both their satisfaction and the absence of dissatisfaction. Satisfaction in itself is not enough for him, because an employee can be both very satisfied in terms of performance and also very dissatisfied for socio-economic reasons, for example, very satisfied with his mission at work and very dissatisfied with his salary. Since one does not compensate for the other, it seems necessary not only to maximize the reasons for satisfaction, but also to minimize the sources of dissatisfaction.
Herzberg’s two-factor theory presented by Alain Thiry.
Herzberg provides keys to understanding that are both simple and effective as he distinguishes between “driving factors” for increasing satisfaction and “hygiene factors” for reducing and possibly eliminating dissatisfaction. Long forgotten, then rediscovered in the 1980s, this theory inspired managers eager to develop the motivation—and thus the commitment and performance—of employees in their teams.
To do this, it seems necessary to provide these employees with the means of satisfaction through recognition, autonomy, empowerment, training and career management, and the means to reduce their dissatisfaction with compensation, suitable and adequate work environment, leadership, status, benefits. , guarantees and rules.
The two-factor theory is also used in marketing to explain a consumer’s motivation to purchase a product or service. We consider it important to transpose this theory into the context of buyer-supplier cooperation, more specifically to co-innovate. We seek to identify the drivers and hygiene factors that buyers can act on to motivate their strategic suppliers to partner with them and consider them as their “preferred customers”.
Driving factors and hygiene factors of buyer-supplier cooperation
Our study is the result of a long period of research and reflection, which allowed us to suggest in a 2017 article for The Conversation some examples of good cooperation that can be compared to drivers and hygiene factors. Since then, we have spoken to dozens of practitioners and organized focus groups to identify and more precisely characterize these drivers and hygiene factors to improve the quality of collaboration, innovate and stimulate motivation.
The drivers we have been able to identify are sharing:
- Vision, values, interests and goals, that is, a form of strategic alignment;
- costs, resources, skills and risks, leading to a display of solidarity and loyalty from a tactical perspective;
- Profits, opportunities, achievements, good reputation, all these victories are to be celebrated together;
- Constant, interactive, transparent communication based on trust resulting in strong integration;
- Efforts and sacrifices, with sacrifices on both sides in favor of creating common and lasting value.
Hygiene factors are expressed more in terms of respect:
- Partners who must have a balanced and harmonious relationship without trying to manipulate or dominate;
- Contracts with special emphasis on supplier payment terms;
- Obligations that go beyond contracts and make the parties involved true business partners;
- From a collective that develops its own identity and that takes precedence over the exclusive interests of each actor;
- Contributions from all to be acknowledged and appreciated.
Emphasizing these five subjects of sharing and five subjects of respect leads us to propose a “5P and 5R model” of good cooperation practices between buyers and suppliers. Some of these practices have already been adopted by companies such as Tefal, owned by the Seb group, which delegates certain engineers to its strategic suppliers to help them improve their skills. Sharing the costs associated with this sponsorship of skills corresponds to the driving factor.
Respecting the interests of suppliers can take the form of the supplier relations and responsible purchasing label, which is the result of a joint effort of the commercial intermediary and CNA (National Purchasing Council) since 2010 and supported by public authorities.
10 commitments of the Charter for Supplier Relations and Responsible Procurement (RFAR).
Examples of companies that show respect and therefore take hygiene factors into account include Nestlé, which pays many of its suppliers in cash, and Safran, which tries to smooth its purchases throughout the year. These multinational companies are thus trying to reduce the dissatisfaction of their suppliers by better respecting their needs in the face of financial risks.
Prioritizing the 5Ps and 5Rs
According to the results of our study, driving factors, i.e. 5Ps, and hygiene factors, i.e. 5Rs, can be grouped into categories that combine sharing and respect according to their importance to the success of buyer-supplier collaboration. These categories are shown in the figure below.
5R and 5P of successful cooperation between buyer and supplier.
The most important are the strategic elements that appear in orange. The mutual respect of partners and the alignment of their vision and values are decisive and can quickly become fatal for cooperation if they are not sufficiently taken into account.
Second-order yellow factors appear essential at a more tactical level, with continued respect for contracts and ongoing sharing of communications and efforts. Then in descending order of importance come elements in green, blue and gray. Driving factors and hygiene factors seem to intertwine and complement each other.
This model provides a global vision of the drivers and hygiene factors that are critical to the success of buyer-supplier collaboration in the context of innovation. An additional result is the predominant importance of hygiene factors, i.e. different forms of respect, in times of crisis or tension. Further research will allow us to explore this point better.