Thinking About Building Business Partnerships?

There are many kinds of successful partnerships in this world: Batman and Robin, Johnny Carson and Ed McMahon, Penn and Teller, Jobs and Wozniak to name just a few.  There are also some terrible partnerships out there: President Obama and Congress, and Sarah Palin and, well, anybody come immediately to mind.  At a business level, corporate or owner/operator alike often seek out partnerships of some kind or another, driven most often by the notion that such a relationship will help grow the business.

Over my professional career I have put together large, global—and successful—partnerships, and I have also assembled partnerships that should have been smashing wins, but wound up fizzling out. What I’ve learned from these efforts is that partnering is hard to get right.  That said, done with forethought and planning it’s worth the effort to try.

As with so much of business life, two keys to a successful partnership are having a clear understanding what you want to accomplish and then honestly assessing performance.  Since partnerships can take many shapes and forms, it’s difficult to generalize about what will make a relationship work, but there are some constants.  First and foremost, it’s critical to make sure that the expectations you have for the partnership are matched by your potential partner.  The number one point of failure for inter-company collaboration is a misalignment of goals.  Sometimes one party sees a relationship as the chance to market products or services in a preferred way to the partner’s customers and prospects, or to leverage their sales team.  In other cases the relationship is pursued to access useful technology, services, or even brand recognition.

Making matters potentially worse is the fact that many partnerships are forged at a personal level, with like-minded, well intentioned employees of the companies concocting a plan they then try and sell up to management.  Without a clear, detailed—and most often quantifiable– understanding of the mutual benefit there’s a good chance things will not work out, and worse, will not survive the loss of one or both of the original advocates.

If benefits flow in only one direction (and this happens a lot) the relationship will lose steam quickly.  Salespeople are “coin operated” and if there’s not a clear path to more money why would they care about a partnership, however well-promoted? If there’s no advantage in terms of market access, technology leverage, or brand awareness who will find the relationship worth maintaining? This applies to all partnerships, not just corporate ones.  If, say, a hair salon teams up with a massage center to offer a package deal or discounts on their respective services, it’s important to know if each partner is seeing increased business from the relationship—or just discounting the business they already have.

To give yourself the best chance of success it’s important to have a clearly documented set of benefits and expectations that will come from the partnership, and even more important, make sure both sides are committed to them. Then it’s all about rollout planning, execution and measurement.  You’ll not be surprised to learn that that middle step, execution, where success is determined.  Space doesn’t permit a full explanation of how to structure execution programming, but it’s sufficient to say that it must be managed as tightly as any intra-company project, perhaps even more so, and clear processes have to be put into place to guide anyone trying to take advantage of the partnership.  There’s a need to educate and demonstrate to all parties how the relationship will work and how to navigate the process you and your partner have created.

Another key to partnership success is having the right people in place to manage the relationship.  I’ve often seen short-term thinkers put into roles that require longer term planning; salespeople asked to nurture and support relationships without a direct revenue benefit to that salesperson; busy executives (or business owners) expected to oversee the details of the partnership.  The fact is partnership management is a skill unto itself, and a blend of practical, tactical execution and business savvy. Even if the result of the partnership is highly technical, at the relationship level the required skills are decidedly business-focused and sometimes even diplomatic in nature.

I’ll close by saying that partnerships can be terrific for two businesses, but they are hard work, and they don’t run themselves.  If you’re contemplating how to expand your business, reach more prospects, add capabilities to your offerings then a partnership may be your ticket to achieving those objectives.  But be prepared for hard work, quick adjustments, and potential disappointment before you find the right blend of shared opportunity, common purpose, and commitment.