Managing coalitions: Do they ever work?
18th May 2010
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Stephen Walker discusses new political coalition and asks, do too many cooks always spoil the broth?
You had to have been in an isolation tank (or not in Europe) to avoid hearing the outcome of the UK’s General Election. The media has ramped up discussions and tried to reinforce public interest in the latest speculation. This is what they do best, combining desk research and informed speculation. In the hope public interest translates to higher revenues!
The spectacle of shuttle negotiations, Lib-Con, Lib-Lab and Lib-Con again finally, would be familiar to any organisation attempting to negotiate an agreement between two (or more) parties.
The Cameron-Clegg negotiation produced an agreed vision for the UK for the next five years. The leadership role, which you expect to be filled by the Prime Minister, is vested in this joint vision. The vision promises the future and its followers believe in that vision.
Do joint ventures work?
Politics is a zero sum game. There are winners and losers. It is not usually the same in business or the NFP sectors. Joint ventures distribute their largesse according to the agreement, the memorandum of understanding. Joint ventures allow a combination of abilities and resources to be put together to the benefit of the joint parties. The situation is much less clear in politics: The Lib-Con coalition has to satisfy its publics, jointly and separately.
Politics is naturally the art of compromise. The art of getting a broad enough manifesto that can hold together while appealing to the majority of voters. But a coalition is a beast with two heads. Each head has to serve two masters, the grand agreed vision and the voters. There will be stresses and strains as events unfold. The media will magnify any sign of disagreement. We can only hope that coalition doesn’t become a shorthand for “can’t make up our minds what to do” in its dealings with the world community.
Joint ventures with a single board do not suffer in this way. However Hydra-headed organisations, matrix managed, can suffer from confusion of leadership. For example organisations that are intimately entwined will always find reasons to be at loggerheads. The rail operating companies and Railtrack being an example that often appears in the press.
In politics there is an expectation that things will change on day one. It doesn’t of course. The ship of state makes the Jahre Viking, the largest oil tanker in the world, look like a rowing boat. The momentum of the state is difficult enough but the working of the steering controls is imprecise too! The larger the course correction the greater the danger we end up on the rocks. This is a difficult time for the UK and many other countries. Greece springs to mind immediately. Companies and other organisations have much better feedback on their “course corrections”. This is a good definition of management. Leadership says lets go to X, a route is planned and the managers carry out course corrections en route.
Our coalition government has decided on the destination – the Lib-Con agreement. They have decided on who is at the controls and what the initial heading should be. I am old enough to remember Harold MacMillan, the UK’s Prime Minister from 1957 to 1963. He was asked what could blow the ship of state off course; his reply was simply "Events, dear boy. Events."
Events will present unpredictable challenges to the Lib-Con agreement and therefore unpredictable responses. Organisations suffer from unpredictable events too no matter how much scenario planning takes place. I am sure BP has a well-developed crisis management plan. Tony Hayward, chief executive, is the public face of BP dealing with the media in a calm responsive way. BP is suffering from events for sure.
Their “coalition” comprises Transocean who own the Deepwater Horizon rig and Haliburton whose cement casing failed contributing to the oil’s escape. Not to mention the other safety mechanism that failed to prevent this oil spillage. One thing is for sure, whatever common cause the organisations operating on the Deepwater Horizon thought they had, they have different goals now. The stress of an unexpected event has shattered the common vision and common cause.
The lawyers will be arguing over the toxic mess long after the damaged environment has recovered. The nicely crafted working arrangements have been shattered. Suddenly the organisations involved do not have coherent goals, the vision is lost. BP is not a small company - if you compare its turnover with a country’s GDP, it would come with Hong Kong and Switzerland in the ranking.
There are lessons to be learned here. Realistically there will always be more scenarios than you have scenario plans. An unexpected event will land in your lap sooner or later and the shared vision you thought you had with your joint partners will be tested. What can be done to keep the partnership together? This hinges on the significant difference between a Supplier and a Partner. Partnership status is recognition of a symbiotic relationship between the partners. Each party benefits – it is not a zero sum again.
Too many cooks?
As each partner needs the other to achieve its own goals it has an interest in the survival of the others. This needs to lead to a broader focus on performance: The desire to maintain the partnership instead of maximising short term partner returns; the desire to look to the long term value and excellent performance of the partnership.
This apocryphal story sums it up well. A good contract can be settled on a handshake. Only if a contract is inequitable does it need to be written. Why else would a party to the contract wish to deny it? What are the odds on the Lib-Con coalition lasting the five year term?