In the complex world of business, with so much interaction, specialization and expertise necessary, companies often have to embrace working with outside entities. When handled properly these mutually beneficial working relationships over time can morph into extremely close cooperation and true win-win partnerships. When you attain this enviable position with another company, know that the combined efforts of both sides are greater than the sum of the individual parts - some people might even refer to it as the start of a ‘business marriage’. But history, and experience tells us that most business partnerships collapse or wither away, and only the small minority benefit each other to the extent that a long-term bond is formed. So what lessons can we take from the winners who have learned to partner successfully?
One of the key requirements and one that companies who have mastered partnerships realize is to partner with the winners - the companies who can bring something to the party that have real value for your company, and even more importantly real value for your customers. It’s this joining of value propositions, executed well, that can really provide massive differentiation. Consider Amazon.com and their partnerships with their worldwide shipping suppliers. Or, if you are a car enthusiast and watch connoisseur, the endearing partnership between Bentley and Breitling. Or what about the smart partnerships between Starbucks and bookstores, and their co-location strategy. And so it goes on. Partnerships can really raise your brand, leverage the strengths of the other partner, and provide a larger forum to showcase yours. So consider these ten partner-proven success recommendations on how to create a partnership, and how to make it both enduring and mutually beneficial to you, your business partner, and of course your joint customers.
1. Transparency is key: while still keeping within the clear requirements of protecting company confidential information. However try and share openly especially when either opportunities or challenges are encountered. This pro-active sharing really helps cement the partnership and keeps communication flowing.
2. Hold each other positively accountable: and learn to talk openly about performance. Partnerships thrive when both sides believe the other side is executing well against both individual and joint goals. Plan them, document them, measure them and review them as a joint team. Note variances and do what is necessary when recovery action is required.
3. Expect things to go wrong: as is common with any relationship, business or otherwise. Its often said that the true strength of a relationship is not what you do when things are going well, but instead what pro-active action you undertake when the inevitable happens, and things start to go wrong. Choose positivity and a commitment to resolve issues as your modus operandi, and both sides will surely reap the ensuing rewards.
4. Kill assumptions: for surely its assumptions that are the number one cause of confusion, the creation of distrust, and ultimately the reason why partnerships break apart. Choosing to openly air assumptions and explore them is key, as is a collectively positive process when assumptions uncover an issue that needs resolution. Be as open as possible, and positively challenge each other - the result will be an even stronger, more enduring and more competitive partnership.
5. Don’t become competitive with each other: as this will surely cause friction and division. By picking your partners wisely, and working with them in a spirit of open communication, especially when it comes to individual and joint strategy, try and steer away from anything that will potentially create competition between you. In these cases building a true co-dependency model will prove to be much more beneficial. It’s just a simple example of the “divide and conquer” approach to strategy that plays to the strengths of each party!
6. Periodically revitalize and renew the agreement: and look for ways of joint improvement. Markets change, customers change, and technologies change - in fact all things change. An agreement that worked well yesterday may not be as potent today, and even less so tomorrow, so take the time to check-in and ensure the agreement is still meeting the needs and goals of both parties.
7. Understanding the expected outcomes is vital: and must be periodically reviewed. The best partnerships in my opinion are the ones that have clear, measurable goals, but instead of leading to a singular destination, are viewed as successes along a continuous journey. This way both sides have to diligently work at it, and both sides always have something to look forward to through future outcomes.
8. Don’t make the partnership one-sided: since this will surely begin to generate resentment. Instead ensure that both sides are equally committed, both in terms of resources applied, and the importance of joint success being achieved. This more balanced approach can really keep a partnership from veering off-track.
9.Protect your intellectual property (IP):at all costs. Ensure there is no ‘bleed’ of intellectual property amongst the companies, and be clear on the ownership of any newly created IP through partnership activities. It’s often this joint creation IP that causes most friction, so handle these challenges, and opportunities, quickly and with a balanced viewpoint.
10. Celebrate successes: since it’s in these joint celebrations that success is often truly appreciated. In addition, it’s through celebrating that both companies can come together more openly and freely as ‘one team’. Its well known that teams who celebrate together are more often than not more likely to work through challenges together, since the strength of the relationship will have increased through these celebration activities. Besides, celebrating is fun!
I’m not sure how many business partnerships actually fail, but I suspect the number is very high indeed. So its the small percentage that make it through, and normally when this success threshold is crossed, partnerships can be highly rewarding and through hindsight worth the significant effort. Partnerships are therefore not a small undertaking. Especially in this highly competitive business environment where there are lots of options, and partnering with one company can by default stop you from partnering with their competition in the future, no matter what circumstances might ensue.
So challenge yourself to think about your business in a different light. Stop trying to create and do everything yourself. Consider outsourcing, and creating partnerships with companies that have skills, knowledge, products and services that are simply better than yours, or better than you could create in a timely manner. And think about doing so soon, since more and more companies are realizing that well-chosen, well-executed partnerships can substantially differentiate them from their ever-hungry competition, and through this facilitate significant market-share gains in short period of times.
Try this little strategy exercise with your Executive team: think of one strategic partnership (per department) that would really accelerate your business. Now think that you have none of these, and that your main competitor beat you to the punch with all of them. Beginning to feel a bit nervous now? As I often say in my coaching sessions with Executives, “If you are going to lead, then you may as well lead from the front!” Don’t be afraid of strategic partnerships, since they really are the smart choice!