Ensuring the Long-term Viability of Strategic Relationships With a Standing Neutral

10.12.20 06:02 PM By Rob
Strategic relationships with CRE & facilities services partners face challenges over time as personnel change, organizational objectives shift, and business context and conditions change. Throughout 2020 and heading into 2021, you are likely to have experienced all these situations.

The need for rapid and substantial changes in workplace strategies brought about by the global pandemic and its subsequent impact on the global economy has introduced unprecedented strains that have tested many strategic relationships.

Standing Neutral

One strategy that can help, especially in times like these when extended periods of instability or uncertainty can be anticipated, is the use of what is referred to as a Standing Neutral. Rather than a point-in-time intervention, a Standing Neutral lends continuity and contributes to the strength of a relationship on an ongoing basis, helping partners to stay mutually aligned in desired goals and objectives.

The concept begins with the understanding that no contract is perfect, and that unanticipated situations, interpretations or disputes are bound to happen. Both parties approve a neutral third party to stand ready to intervene when called upon at any time throughout the life of the relationship.

Keep Deal Intent in Focus

The Standing Neutral works as a moderator or arbitrator, but with a critical difference. Having been appointed at the beginning of the relationship, or at a time before an issue or dispute arises, the Standing Neutral is involved as part of the governance mechanism, armed with a complete understanding of the contractual details of the deal and, most importantly, the strategic intent of the deal.

The Standing Neutral is a technique that has long been used in the context of major construction projects and other long-term relationships where cooperation is paramount. Although initially designed to prevent problems from escalating into adversarial disputes, it has since developed into a support mechanism that incentivizes the parties to concentrate on driving strategy and aligning interests. It creates an environment where resolving the issues in a spirit of partnerships, rather than allowing them to fester and build, is at the core of the culture.

A Real-Life Example

Ingrid Fenn, President and CEO of SIREAS, recently participated in a SIG webinar in which she described the use of a standing neutral and describes a specific case in which it was used effectively to head off a major disruption of a relationship involving a SIREAS client.

Watch the 3-minute segment below, and if you have any questions or would like to discuss a particular challenge in your organization, click here to schedule a call.