Case Study – Internal Business Relationship

A German corporation with worldwide manufacturing, marketing and installation of industrial products was preparing a round of complex testing of a product jointly developed with their American regional company. Testing was to be performed in a new facility in Germany.

A period of six months to persuade clients of the product’s technological improvements made this round of testing critical. Complicating the situation was increasing friction between the Americans in product development and their colleagues in product testing in Germany, which had led to delays, increased internal transfer costs and a loss in the quality of test results.

The situation was analyzed via background interviews with management and engineering, a web-based survey, as well as a study of current processes. From the German perspective an internal imbalance existed between product development and testing. Testing was given unrealistic schedules. Test requests from the U.S. were often incomplete and/or submitted late.

American colleagues failed to provide adequate context information. Above all, little attention was given to the overall planning restraints of the test center. During testing important in-house rules were ignored. By attempting to micromanage the testing process the American colleagues bypassed established roles and responsibilities. Valuable recommendations from the testing department were rejected out of hand.

The product developers in the U.S. had a different perspective. Their German testing colleagues mistakenly perceived the business relationship as a partnership, rather than an internal client-supplier relationship. Not fully understanding their role as a service provider, the German colleagues were slow and bureaucratic, with internal rules appearing more important than the specific needs of the client.

Test center colleagues demanded far too detailed initial information before beginning test preparations. Once testing had begun, they proved inflexible regarding necessary changes. In short, the American colleagues saw themselves as the client. If their needs were not met regarding scheduling, budgets, and quality, they felt not only entitled, but obligated and empowered to search for an alternative external testing facility.

A three-day workshop with German and American participants from product development and testing — six managers, ten engineers — took place at the test center in Germany. On the key issues of transatlantic cooperation (decision making, testing processes and procedures, priorities-scheduling-budgeting, “value assurance”, test phase collaboration) the workshop participants focussed on three fundamental questions:

Where do we diverge in our fundamental approaches?
What problems, but also opportunities, are created by these divergences?
How do we both solve the problems and exploit the opportunities?

The respective viewpoints were understood and accepted on their own merits: the German perspective based on a partnership between company-internal departments, the American based on an internal client-supplier relationship. A common approach was developed, with the participants resolving issues of contention point for point: from test preparation to delivery of test results, including roles and responsibilities and issues of test-site etiquette.

An inter-departmental transatlantic project team was created to coordinate and control all tests. The German-American team was empowered to develop and implement a process-map for testing, defining all relevant processes, procedures and rules of cooperation during the upcoming phase of testing. Moreover, product development and testing agreed to fully integrate the other into their internal planning and decision making processes.

The agreements established in the workshop led not only to an immediate improvement in transatlantic cooperation during the critical testing preparation phase. The initial rounds of testing proceeded with neither organizational nor technical difficulties. In the end, the test series had reached its goals: successful tests, optimized technical and commercial use of the new test center, and a clear demonstration within the company of how cross-Atlantic collaboration can lead to results.

Two members from quality control — an American and a German — were invited as observers to the workshop, on the third day of which they discussed with the participants how to assess the impact of the workshop decisions at three, six, nine and twelve month intervals. The purpose was not to institutionalize a controlling mechanism, but to set up an informal scorecard. Should the measures meet expectations, similar measures would be recommended to other cross-Atlantic departments within the company.