Compatibility and Trust ® (CaT) Assessment. About the Research Logistics of the Survey Sample...

Compatibility and Trust® (CaT) Assessment

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• About the Research• Logistics of the Survey• Sample Survey Results

Topics

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• The Compatibility and Trust Assessment (CaT) was developed by Jerry Ledlow Ph.D. and Karl Manrodt Ph.D. to measure the strength of business relationships

• Based on research – Supports Dr. Oliver Williamson’s assertion that style

matters

• Seeks to show buyers and suppliers where they have gaps in order to help foster better a stronger wonder relationship

About the Researchers

©2011 Jerry Ledlow Ph.D. and Karl Manrodt Ph.D.- Used with permission

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Avoidance

Empathetic

Competitive

Adaptive

Vested

BenignStyles

MuscularStyles

Credible

The CaT Assessment Identifies Each Parties Style

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Value Building

Value Fading

Less Aligned More Aligned

More Aligned

Less Aligned

Compatibility Alignment

Relationship Dynamics

Value Holding

Value Seeking

Value TippingBuyer

Supplier

We Then Map Each Parties Approach…

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Misalignment

…And Look for Alignment

Alignment

Misalignment: Increased transaction cost, smaller solution/agreement set of options

Alignment: Decreased transaction cost, larger solution/agreement set of options

Firm A

Firm B


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• Trust: Performance to promise and meeting commitments is the foundation of trust. Without performance, trust cannot exist.

• Innovation: Strong and trusting relationships allow the parties to share risks and rewards, investing in each other’s capabilities and collaborating to achieve common goals.

• Communication: The open and timely sharing of all information that is relevant to a partner’s decision-making ability.

• Team Orientation: Both sides of a relationship believe in the relationship. Efforts are made to view decisions from the partner’s perspective to mitigate opportunism and promote collaboration.

• Focus: There is common purpose and direction.

Five Dimensions of Compatibility and Trust

When the five dimensions of compatibility and trust are cultivated, relationships can prosper due to greater collaboration and better performance.

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• The assessment is conducted using a 360 degree “two-world view” where:– The buying company provides responses about their own

organization, and their perspective of the service provider – The service provider provides responses about their own

organization, and their perspective of buying company

• We ask participants to rank statements related to the relationship on a scale from “not at all” to “always”

• In addition to the questions, we ask for a bit of demographic data which describes the individuals role in the Buying Company/ Service Provider relationship to help us compile the results

• The survey is typically anonymous – but can be set up to identify individuals for coaching purposes

The Structure of the Assessment


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Topics

• Assessments are conducted using Qualtrics - a confidential internet based survey service– We create a web link to the assessment for each company– It takes about 15 minutes to complete– The link to the survey is typically kept open for 2 weeks– Individual responses are kept confidential

• Buyer-Supplier teams receive a unique link that allows us to pair their data and create a 360 degree view of the relationship

The Web Based Trust Survey


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• We recommend broad participation by both companies, including individuals with varying responsibilities at various levels (leadership, management, operations)– Multi-level responses will make for better results– The assessment format allows for a reasonably large number of

people to take the survey

• The more wide-ranging the responses the better we are able to capture the rhythm of the relationship between the parties.

• We typically see between 7 and 50 responses from both buyers and suppliers.

More is Better

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Topics

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Strategic Sourcing Climate Assessment

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Vested Deal Readiness Index By Dimension


The Vested Deal Readiness Index by dimension scores each dimension considering the differences in scores between the parties.

Companies are ready for Vested when they have a solid relationship as indicated by a Vested index over 0.70. The relationship should be improved before moving to a Vested Agreement if the index is below 0.70.

Vested Readiness

Index0.64 ± 0.08

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Visualizing the Scores – Average Score

The combined relationship scores show that the parties should work on improving…

Focus, Team Orientation, Communication and Innovation.

Looking at the average scores indicates areas the parties need to improve together, in order to have a Vested relationship.


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Scoring by Dimensions


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Scores by 360 Degree View


The total compatibility and trust score is measured across the four views. Differences in total score need to be investigated by the parties, and the relationship improved.

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Visualizing the Scores – All Views

Scoring shows where the strengths and weaknesses lie in the relationship.

Two world view is based on each company performing a self assessment and assessing their partner.


— Company— Company Perception of Service Provider

— Company— Company Perception of Service Provider

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Visualizing the Scores – Small Gaps

Little Gap In Views

In a good relationship the views of each party show little gap in scoring across all 5 dimensions of compatibility and trust.

When the parties’ views align. The level of trust is improved and the potential of the relationship enhanced.


— Company— Service Provider Perception of Company

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Visualizing the Scores – Large Gaps

Large Gaps

When the views of each party show a large gap in scoring across the 5 dimensions of compatibility and trust the relationship needs work.

Regardless of the score it is important that the parties’ views align.

Gaps show issues with perception that erode trust and impact communication and cooperation.


— Service Provider— Company Perception of Service Provider

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Visualizing the Scores – Self Views

Understanding how the parties view themselves is an important step in driving improvement.

Both companies rank themselves high in Trust

The Buyer ranked itself low in Focus, Team Orientation and Communication

The Supplier ranked itself fairly high across all dimensions.


— Company— Service Provider

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• The Compatibility and Trust Assessment helps the parties to open a dialog so that they can improve their relationship– Addressing gaps in how each party views the other– Addressing low scores across the 5 dimensions of

compatibility and trust– Ensuring the relationship is mature enough to

progress to a Vested agreement

• A strong relationship is needed for a successful Vested journey

Using the Results to Focus Improvement

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Contact Us to Learn More or Get Started

Want to learn more about the CaT Assessment?

Email Kate Vitasek, lead faculty and researcher at [email protected]

Kate VitasekVested Lead Faculty/ResearcherUniversity of Tennessee,

mailto:[email protected]

Appendix: Example Tendencies of Each Style

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• When an issue is trivial or more important issues are pressing

• When you perceive no chance of satisfying your needs• When potential disruption outweighs the benefits of

resolution• When tempers are high and time is needed to let people

cool down and regain perspective• When gathering information supersedes immediate

decision• When the relationship could be damaging to the

organization and is not critical• When partnering or contracting seems rushed or pushed

as a result of other issues; short term strategy to buy time

Tendencies of Avoidance Style


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• When issues are more important to others than to you; to satisfy others and maintain cooperation

• To build social capital for later issues. • To minimize loss when you are outmatched and

lack any competitive advantage• When harmony and stability are especially

important; when you are building up a weaker partner in the market

• To allow subordinates to develop by learning from their mistakes

Tendencies of Empathetic Style


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• When quick, decisive action is vital to the organization (e.g., emergency situations such as a disaster or terrorism incident or accident)

• On important issues where unpopular actions need implementing (e.g., cost cutting, enforcing unpopular rules, discipline)

• On issues vital to company welfare and survival when you know you're in a state of advantage

• Against people who take advantage of noncompetitive behavior

Tendencies of Competitive Style


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• When goals are important, but not worth the effort or potential disruption of competing but worth a more collaborative approach

• When opponents with equal power are committed to mutually exclusive goals; you adapt to the contract / partnership situation and create the most advantageous position

• To achieve temporary settlements to complex issues• To arrive at expedient solutions under time pressure • As a backup when a Vested or Competitive style is

unsuccessful

Tendencies of Adaptive Styles


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Tendencies of Vested Style


• Feel a better solution can be achieved through problem-based collaboration

• Focus on solving problems, enhancing benefits, not on accommodating differing views

• Flexible, understanding that solutions have positive & negative aspects

• Ability to understand other parties issues • Problems are looked at objectively, not personally • A solid knowledgeable about the relationship and transparent

view of cost structure to help drive problem solving • Understanding the need to occasionally “save face” • Celebrate successful outcomes openly • Find innovative solutions when both sets of concerns are

important

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