Collaboration Learning Resources 2

4.0 Stage 1: Scoping your collaboration

Introduction

In the current funding climate for community service organisations, there is a lot of pressure to collaborate.

The introduction of the National Disability Insurance Scheme (NDIS), Aged Care “packaging” and Youth Services “recommissioning” are part of governments’ responses to the twin pressures on them to provide for more integrated personalised services and where possible, at cheaper or at least steady cost.

There is no doubt that individual care packages are a welcome change for many service users who want more choice in the providers they access. It’s also true that such arrangements are likely to be more responsive to individual needs.

For not-for-profit organisations that have traditionally been block funded by governments to provide specified community services, these changes are a challenge, since in future they will need to have service users choose to access their services from among a range of providers, if they are to secure their finances. Governments may still offer service agreements but this type of funding will be available for a limited range of services providers and be much less common in the future.

Just what the future holds for community services providers is not yet clear. The NDIS is being rolled out and the models of assessment, funding packages and service delivery are being trialled and rolled out in different States and Territories at different rates. What does seem clear is that governments around Australia are keen to reduce the numbers of organisations with whom they wish to contract for the delivery of funded services. This does not necessarily mean fewer service providers, but it almost certainly does mean fewer “lead agencies” with who governments deal directly.

All of the rhetoric is around encouraging service providers to work together so as to reduce duplication, obtain economies of scale and to build capacity by sharing resources and “know-how”.

Strategic assessment

In any strategic assessment about the future of an existing service provider organisation in the new “customer-directed-care” government funding environment, a careful assessment of the strengths, weaknesses, threats and opportunities of the organisation is essential.

Strengths

Very honest and well informed answers to the following questions will help to build a picture of the likely future directions of the organisation:

• What is the organisation really good at?
• On what basis do we assess we are good at it?
• What are our current services – will they be relevant in the new environment?
• What are our “unit costs” for each type of service?
• Are those costs competitive?
• In what areas can we deliver those services at that cost?
• Are there any ways of reducing those costs, without effecting quality?
• What are our “indirect costs” per unit of service delivery?
• Are there any ways of reducing those costs?
• Could our “back office” services remain competitive with services expansion?
• Are there any technologies that could reduce costs per unit of service delivery?
• What do we do that others are better at than us?
• Can we significantly improve our performance of these activities?
• Which other organisations do these things better than us?

Weaknesses or threats

The following questions are designed to have the organisation address those aspects of their activities that likely to be weaknesses or threats in the new environment:

Area of operations

• What is the economically sustainable area of coverage of our services? Is our area of operations too small on our own?
• Who else provides services in the same or much the same area?
• Which larger organisations provide the same service types in the adjacent areas?

Access to capital

• How sustainable is your organisation?
• How much untied financial reserves do you have?
• Who are the “big players” in the region?
• What is known of the intentions of the “big players”?

Relationships with government

• Are you actively engaged in consultations with the relevant government funding agencies?

Strengths and opportunities

The following questions may assist organisations to identify those characteristics of their organisation that are likely to improve their competitiveness in the new government funding environment:

• What is it about your organisation that would make it attractive to government funders?
• Does your organisation have the organisational capacity and expertise to become a “lead agency” for the delivery of a range of services in the region in which you operate?
• Does your organisation have a leadership team that is ready to explore all options for new relationships, both with the government officials and with the other providers with a view to finding new ways of providing integrated services?
• Do you already have working relationships with other similar agencies?
• Have you negotiated suitable agreements for working together in the event of winning a joint tender/contract?
• Is your organisation “contract ready”?
• Are you well informed about government timetables for offers and tenders?
• Do you have the specifications of the service types that are likely to be approved?
• Do you know the government’s selection criteria?
• Do you have your unit costs already worked out?
• Do you know who else in your region may be submitting?
• Does your organisation have all the appropriate track-record, accreditations and other qualities that the funding agencies will be looking for?
• Do you have quality systems in place?
• Do your services staff have appropriate qualifications?
• Do you have suitable risk management processes in place?

The answers to these question and other similar questions are likely to assist the organisation’s governing body and management team to make realistic assessments of the courses of action open to them in order to make a successful transition to the new government funding environment.

4.1 Assessing Potential for Collaboration

Organisational self-assessment

To assess the potential for collaboration, an organisation must review and reflect on its management and operations as well as conduct a thorough assessment of the benefits and risks of any proposed collaborative venture.

Before collaborating with other organisations, an organisation must have a clear picture of its capacity and a documented and formally endorsed statement of its priorities and aims. This is usually presented in a business plan format which details the organisation's vision, purpose, services, human and financial resources and time frames for achieving outcomes.

The business planning process should also provide an analysis of the organisation's key assets, such as databases, technology, systems, people, and funding, and of its operating environment, internal processes and external relationships. This enables the organisation to see where it might overlap with other services, identify any gaps in its capacity to meet client needs, and how improved links and collaboration with others might assist.

Where an organisation has already developed a business plan, it is important to review this in the context of a proposed collaborative venture, and to check that:

• the proposed venture fits within the aims and business of the organisation, and
• the organisation has the resources and capability to take on the venture.

Once an organisation has developed or reviewed its business plan, or used some other method to assess its capacity, it can then assess the potential of any proposed collaboration. A business case for collaboration can provide a useful framework for this process.

Collaboration assessment: the business case

Preparing a business case is a way of thoroughly examining the specific details of a proposed collaborative structure or venture, assessing whether the proposal is viable, and enabling the organisation to make an informed decision about whether to proceed.

Preparing a business case involves assessing:

• how well the project or venture will fit with the purpose of the organisation
• how likely it is to be successful and achieve its objectives
• the costs and benefits of the proposed venture
• the risks and likely impact of the project or venture on the organisation
• the partner/s and the likely partnership benefits
• fit with the organisation's purpose. It is critical that there is a strong alignment between the organisation's aims, the potential partner/s' objectives, the project outcomes and client benefits to be achieved through the collaboration.

Likelihood of success 

Assessment needs to be done in conjunction with the assessments of costs, benefits and risks. It needs to be informed by the input of key stakeholders, people with specific expertise relevant to the project, organisations that have attempted similar projects or ventures and background research on relevant areas.

Costs and benefits 

This will include:

• details of project costs, including human, capital, recurrent financial, risk and legal costs
• estimates of project benefits, such as service improvements, client benefits, operational efficiencies, increased competitiveness and market share, improved reputation and community engagement, reduced governance and compliance risk

Risk assessment 

It is essential to make a detailed and critical evaluation of the potential risks associated with a proposed collaborative activity before negotiating any agreements with other organisations. Time, money and energy spent in assessing the likelihood and impact of potential risks of a project can make the difference between an innovative and successful project and an expensive failure. For more information visit the Collaboration Risk Assessment section.

Partners

It is also important to assess the attributes and suitability of potential partners as part of assessing the potential benefits of a collaborative venture. Suitable partners will be ones that demonstrate:

• aspirations for their organisation and for the collaborative venture that are compatible with your organisation's
• organisational cultures that are complementary to your organisation's
• complementary services, activities, client groups and client outcomes
• something to contribute and something valuable to gain from the collaboration
• capacity for a similar level of investment to make the collaboration work, and
• transparent processes that will form a basis for reciprocal trust and accountability.

Ongoing commitment to the partnership is also necessary to ensure the benefits outweigh the costs and that collaborative effort delivers improved outcomes for clients.

4.2 Building Collaborative Capacity

Although we often think of collaborative efforts as discrete activities, the reality is that participants are part of a broader system of organisations and/or groups. This system operates very differently from the way collaborative efforts need to operate. Therefore the organisations and/or groups in this broader system will have to make adjustments to accommodate the operations of collaborative networks, such as:

• establishing flexible recruitment and hiring processes that encourage cross-boundary working
• changing organisational norms and culture to support collaboration, in particular gearing reward systems toward collaboration
• including the requirement for collaborative behaviour in job descriptions, setting goals related to cross-boundary work, and acknowledging those who exhibit collaborative behaviours
• introducing arrangements that facilitate the work of the collaboration, for example, open access to funding and resource supports
• developing accountability and reporting regimes that reflect shared effort and responsibility, including performance indicators for collaborative behaviour and actions, the formation of shared revenue streams and establishing agreed reporting criteria.

These system-wide changes will be needed to legitimise and sustain the efforts of individuals working in collaborative networks. Formation of collaboration necessitates changes within and among participating organisations including:

• shifting emphasis from completing tasks to building and nurturing the relationships needed to facilitate joint work
• altering the structure and operation of the participating groups to reflect collaborative ideas 
• encouraging shared decision making.

Finally, it should be remembered that any collaboration is as complex as the issues that it deals with; there is no one-size-fits-all model. Instead, successful collaboration rests on the ability of members and administrators to be aware of the key elements of collaboration provided here as a basis for responses that best fit their problem context.

4.3 Need Identification

Evidence indicates that community organisations collaborate to:

Create or modify service delivery

Example

• A new shared service.
• Enhanced or united client service activities.
• Combined specialist and generalist service delivery.
• Combined parts of the service delivery continuum, for example prevention, early intervention and support services.
• New approaches to working with clients, for example add outreach to existing centre-based work.

Maximise resources

Example

• Co-location of service outlets.
• Shared infrastructure such as shared vehicles or information technology.
• Shared business processes such as payroll, bookkeeping.
• Shared functions such as service reception and administration support.
• Shared data, information, ideas or strategy through a research or evaluation collaboration.
• Shared training and professional development activities.

Develop policy at organisational or community levels

Example

• Collaborative policy development and advocacy through a peak body.

Develop systems and change through changed relationships between organisations

Example

• Integrated cross-agency referral systems and seamless client pathways.
• Legal auspice arrangement between a large and small agency or newly funded program.
• Memorandum of Understanding (MOU) or agreement between agencies to reduce duplication through clear definition of roles and responsibilities to meet holistic client needs.

Develop social and community

Example

• Local committee that plans and coordinates agency participation in community awareness week activities.

4.4 Purpose Identification

Organisations may establish formal ties for a number of reasons, such as:

• developing agreed procedures for how the organisations will relate to each another in conducting their separate services or activities, for example, referral protocols
• forming partnerships or consortia to undertake a one-off activity, project or other joint venture, for example, a joint tender
• forming partnerships for a longer-term activity or series of projects, for example, a joint venture to set up an ongoing service operated by two organisations
• to agree to share resources or expertise, for example, co-location of office premises
• to agree for one organisation to provide temporary auspice (legal governance) to another organisation.

Formal arrangements between organisations should be documented, and the documentation's type, extent and complexity will depend on the type of relationship being formed and the purpose of the collaboration. The most-common forms of documentation are:

• protocols - documented inter-agency procedures
• memoranda of understanding (MOU) - a broad agreement, usually documenting principles and general guidelines for a partnership or consortia
• agreements - more specific agreements, usually with some legal enforceability, that document the details of a partnership or consortia
• contracts - used when there will be significant consequences for participating organisations if partners do not keep to the agreement, or where complex issues are involved, such as when some joint ventures or amalgamations occur.

4.5 Values Identification

Collaborative initiatives can be easy to begin and hard to sustain.

Effective inter-agency relationships are a critical element of sustainable collaborative initiatives. They need to be set up and supported by systematic and early planning, clear documentation and ongoing review processes.

For effective relationships to be developed, there needs to be alignment of organisations' goals and values, and a basic agreement about:

• the purpose of the collaboration and what the organisations will try to achieve together
• mutual expectations about outcomes and processes
• the principles or values by which the partners will operate. These principles need to include agreements to operate with transparency and openness in dealings with one another.

Lessons from formal collaborative initiatives indicate that the following are needed to sustain effective collaborative relationships:

• a strong commitment to shared strategic goals and a truly shared, achievable purpose
• leadership at relevant levels to set the vision, direction, principles and a culture of collaboration
• a strong commitment from partner agencies to developing effective and sustainable working relationships based on transparency, openness, a commitment to problem solving and building trust
• clear parameters for the collaboration and identified roles and responsibilities of the collaborating partners
• an investment of time and resources in relevant management and governance processes
• regular and meaningful communication and timely and appropriate access to information for partner agencies
• agreed processes for problem solving, non-adversarial dispute resolution and partnership termination
• flexibility to respond to change and to be innovative, while maintaining focus on the initiative's main objective
• recognition of the commitment and capacity of those involved
• requirement to develop as a bottom-up as well as a top-down process
• feedback from relevant stakeholders, including clients where relevant
• regular review as goals and partnership arrangements may need to change over time.

Investment in the collaborative relationship is essential to avoid the common problems of collaboration failure, which can include:

• uneven workload distribution
• inadequate planning
• lack of enthusiasm
• conflict due to differing values
• unrealistic expectations.

4.6 Building Collaborative Relationships based on Trust

Strong personal relationships across organisational boundaries based on inter-personal and inter-organisational trust and confidence are recognised as keys to collaboration success. While it is widely acknowledged that trust is a, if not the, critical feature of successful and sustained collaborative relationships, less is known about how to build and sustain trust across collaborating organisations.

The development of trust depends on the professional and personal knowledge, skills and attributes of the individuals involved and the attributes and behaviours of participating organisations. The key individual and organisational factors identified for the development of trust between organisations are:

• business sense and functional competence, for example parties have the skills and resources to do the job
• integrity, for example commitment and good faith demonstrated in making and implementing agreements
• interpersonal competence
• open and honest communication
• consistency of behaviour
• loyalty
• availability
• discretion
• accessibility
• judgment, for example accurate appreciation of partner capacities
• collaborative rather than hierarchical relations, genuine power sharing, shared decision making and leadership, and consensus building
• predictability, for example realistic and balanced expectations of partner contributions

The efforts of organisational partners and their representatives to develop trust and good communication will provide a strong foundation for sustaining effective collaborative relationships.

It is also important that partner agencies' expectations of the relationship be documented in the same way that agreed tasks and outcomes are documented.

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