Building the Social Contract

1. Building the Social Contract Dr. Martha Jensen Angela Dodson California State Automobile Association

2. Overview Goal of this session is to share our experience of social contracting and how this process has impacted the business bottom line in a very real way.

3. Origins of Social Contracting

4. What is the Social Contract? Implicit Where it came from Foundation is from an article in HBR (February 2003) � Negotiating the Spirit of the Deal Impetus from CSAA: CSAA�s vision includes being known as �partner of the year�, being the benchmark for membership companies, operational efficiency, and others. CSAA has historically not been very good at vendor or relationship management. Conscious effort to improve how we partner with other companies, especially strategic partners. Where it came from Foundation is from an article in HBR (February 2003) � Negotiating the Spirit of the Deal Impetus from CSAA: CSAA�s vision includes being known as �partner of the year�, being the benchmark for membership companies, operational efficiency, and others. CSAA has historically not been very good at vendor or relationship management. Conscious effort to improve how we partner with other companies, especially strategic partners.

5. Social Contract on Two Levels Underlying Social Contract USC is an attempt to get the economic contract and the social contract to mutually reinforce themselves. Questions that get answered here include: is this a short or long-term deal? Is it open or task specific? Is it a partnership or a series of transactions? Ongoing Social Contract The OSC makes explicit the expectations for interaction, such as norms for communication, decision making, handling unforeseen events, dispute resolution at the source, and conditions and means for renegotiations. When embarking on a strategic partnership, both parties have expectations of the deal and how it will impact them. Social Contracting makes those expectations explicit. SC happens on two levels: What - the underlying social contract How � the ongoing social contract Underlying social contract: USC is an attempt to get the economic contract and the social contract to mutually reinforce themselves. This is too often left implicit. Questions that get answered here include: is this a short or long-term deal? Is it open or task specific? Is it a partnership or a series of transactions? Ongoing social contract: The OSC makes explicit the expectations for interaction, such as norms for communication, decision making, handling unforeseen events, dispute resolution at the source, and conditions and means for renegotiations. Inaugural: CSAA and IBM partnership began in February and was kicked off with social contracting In progress with EDS, Accenture, Bank One, Hertz When embarking on a strategic partnership, both parties have expectations of the deal and how it will impact them. Social Contracting makes those expectations explicit. SC happens on two levels: What - the underlying social contract How � the ongoing social contract Underlying social contract: USC is an attempt to get the economic contract and the social contract to mutually reinforce themselves. This is too often left implicit. Questions that get answered here include: is this a short or long-term deal? Is it open or task specific? Is it a partnership or a series of transactions? Ongoing social contract: The OSC makes explicit the expectations for interaction, such as norms for communication, decision making, handling unforeseen events, dispute resolution at the source, and conditions and means for renegotiations. Inaugural: CSAA and IBM partnership began in February and was kicked off with social contracting In progress with EDS, Accenture, Bank One, Hertz

6. Business Impacts �What we are now seeing is significant financial return because we �fail faster� and have successfully pushed decision making much deeper into the project teams.� Quotes from CSAA CEO, Accenture partner, Bank One SVP Relationship Management, EDS management, IBM VP Global Services, authors of the original article CSAA and IBM feel this has had significant business impact in speed to building a high performance cross functional team CSAA and EDS, CSAA and Bank One were both having relationship issues (communication break down, contractual disagreements, others). The social contract has had tremendous impact in working through those issues without legal intervention CSAA has seen: Faster time to decisions Decisions made at lower level of relationship Faster implementation Quicker time to high performance teams Quotes from CSAA CEO, Accenture partner, Bank One SVP Relationship Management, EDS management, IBM VP Global Services, authors of the original article CSAA and IBM feel this has had significant business impact in speed to building a high performance cross functional team CSAA and EDS, CSAA and Bank One were both having relationship issues (communication break down, contractual disagreements, others). The social contract has had tremendous impact in working through those issues without legal intervention CSAA has seen: Faster time to decisions Decisions made at lower level of relationship Faster implementation Quicker time to high performance teams

7. How it Works: 5-Step Process Leadership On-Board Building the Foundation Building a Shared Purpose Health Check Audits and Ongoing Interventions Five Step Process Social Contracting is a process, not an event. The process consists of a minimum of five steps: .Leadership on-boarding: Ensuring the leadership of both parties is on the same page and in agreement regarding what the social contract will and won�t do, what they want and need out of social contracting, and what their leadership roles are in the process. .Building the foundation: With the extended leadership team and the core of the partnership team, defining what this partnership is or is not, exploring what constitutes a win-win for all, and building operating agreements for the partnership. .Building a shared vision/purpose: Defining the purpose of the partnership, what the end state will look like, and what needs to be in place to ensure success. In this round, we also explore what is working or not working to move the partnership along. .Health Check: Exploring and discussing what�s working, what�s not, and how we accelerate the growth to a high performance team. .Interventions as required to maintain and accelerate team growth Five Step Process Social Contracting is a process, not an event. The process consists of a minimum of five steps: .Leadership on-boarding: Ensuring the leadership of both parties is on the same page and in agreement regarding what the social contract will and won�t do, what they want and need out of social contracting, and what their leadership roles are in the process. .Building the foundation: With the extended leadership team and the core of the partnership team, defining what this partnership is or is not, exploring what constitutes a win-win for all, and building operating agreements for the partnership. .Building a shared vision/purpose: Defining the purpose of the partnership, what the end state will look like, and what needs to be in place to ensure success. In this round, we also explore what is working or not working to move the partnership along. .Health Check: Exploring and discussing what�s working, what�s not, and how we accelerate the growth to a high performance team. .Interventions as required to maintain and accelerate team growth