This is one of a 12-part series exploring Cooperation and Collaborative Business Models.
“If you want to go fast, go alone. If you want to go far, go together” – African Proverb
Are you looking for a way to work with others?
As part of our 12-part series on Professional Collaboration, we are going to look at 6 types of collaborative enterprise models over the next 6 articles. The topic of this article is Prime Contractors.
Prime Contractors are more of an arrangement of responsibility and leadership than a unique model unto themselves. That being said, they are an extremely important structure and very versatile. Prime Contractors are about service delivery and project management, rather than an avenue for collaborative procurement or internal capacity and resource development. This type of collaborative enterprise partners quite well with all other models. It can be the role delineation model for a Consortium, the framework for work being done through a Partnership, the shared responsibility within a Mutual Structure for Social Benefit, or even a project management approach for a Quality Network. The Prime Contractor type can also allow for collaborative strategies between enterprises.
The main focus of Prime Contractors is to clarify who does what within a collaborative effort.
How do Prime Contractors work?
There are two main models of Prime Contractors that are commonly used. They are both simple and valuable when a leadership structure is required.
Prime Contractor Model 1: Managing Agent
Managing Agents are really the Administrators of a collaborative effort. They can be the leaders, or commissioners for the enterprise, but are much more often the organizational, financial, and administrative support. Some Managing Agents are authorized to manage the major decisions to allow the partners to focus on outcomes and complete the actual work. Other Managing Agents are just the administrative support point for the partners. They do not do any of the actual work other than look after the books, be a central access point for inquiries and arrange schedules.
Managing Agents play a very important role when you pull together teams of specialists. They can focus internally making sure all of the details are completed and keeping the specialists working together efficiently. An example of this model is when there is any kind of merger or acquisition of organizations. When there is a large transition of any kind, there is typically a Transition Team that is created to provide oversight and advisory services to the organizations going through the change. They will provide administrative and financial support to ensure that everything is accounted for and the organization can focus on the change itself. Another example is in real estate. When a collective of realtors form a group to attract a larger customer base, they hire a person or company to manage the administrative and/or property management responsibilities so they can focus on selling properties.
To pull off this type of Prime Contractor model, the partners involved need to see the value in having a member who is an expense, and will not be a profit generator. They need to value the ability to pass over the time consuming, internally focused responsibilities, and accept the costs of that service. You also need to make sure that your Managing Agent is a strong communicator. Keeping everyone who is providing a service or navigating change informed is critically important.
Prime Contractor Model 2: Lead Agent
A Lead Agent is a partner in a collaborative enterprise who is providing direction and delivering a service. The main difference between a Lead Agent and a Managing Agent is that the Lead Agent is providing a service to the enterprise and managing the internal responsibilities at the same time. This is a common practice in consulting when a company is bidding on a job and they are going to subcontract out small pieces of the work that they are not equipped to do, while still remaining the main contractor and providing most of the service. The Lead Agent is typically a larger or more general service provider who not only has the internal capacity to manage the project and the internal responsibilities, but also has enough specialization to deliver much of the service. They typically will be the contract holder and assemble the team that they need to round out their services.
One very common example of a Lead Agent is a Construction Company. Most construction companies when hired for a job like building a house, have their own crew to design, build, and manage the billing and purchasing. However, they will often have subcontractors who are trades specialists, like plumbers and electricians, who they hire to deliver their specialized services. The construction company leads the projects and the subcontractors just do their part and get paid once they are finished. This is how almost all construction projects work.
To pull off this type of Prime Contractor, the Lead Agent needs to be very good at finding, bidding on, and managing projects. The small subcontractors are apt to rely on this type of collaborative enterprise for much of their work, so they need real leadership from their Lead Agent. The reputation, pricing, and quality of the Lead Agent is incredibly important. Their ability to hire subcontractors is equally important as the Lead Agent is ultimately responsible for the work.
The Prime Contractor model is a very valuable method to pull together teams to provide service. How they manage the roles and responsibilities of the service they offer really depends on the size and capacity of the team members. If the members are smaller or are going through change and cannot manage the internal responsibilities, then they should look at a partner who can do that for them. If there is a team with a larger membership that combines a good reputation, the internal capacity to manage their internal responsibilities plus manage most of the external services, then they need to look at who to bring on to round out their service offerings. Having a realistic assessment of your capacity and abilities is key to knowing which model will work best for you.
To learn more about Prime Contractors contact our team at firstname.lastname@example.org
Roman 3 is a solution and consulting firm that specializes in inspiring progressive action, creating a culture of innovation, and assisting organizations in implementing transformative change. We help you build capacity, collaborate, be progressive, and grow to your full potential. For more information on our services and support check us out at www.roman3.ca