Non-direct competitors of similar size may have an interest working together to expand their respective pie: they can become partners. But what does it really mean and most importantly, how to make it successful?
Actually, what is a partner?
The question frequently arises and there may be as many answers as there are stakeholders. Yet, partnerships are usually set up with customers, suppliers, other industry players and the people willing to start these new relationships have all the same purpose:leveraging each others' assets (brand, sales forces, customer base, technology, resources, budget, geographical presence, etc.) as a means to reach their business goals (short or long term).
How? With an obvious give and take approach that goes beyond what you do with others:common sales targets, shared intelligence, co-innovation, budget commitment, exclusive terms or joint offers to name a few. The starting point varies depending on the objectives but ultimately, partnering is forming an intimate relationship with another entity, whether opportunistic or strategic. The key question is: how to make it work?
1. Laying the right foundation with the right people
Before working on a deal, qualifying the opportunity with most operational teams should be done with care to prevent a weak implementation later on.
Cascading the partnership plan in advance, up and down the organisation (at all levels), is a very valuable step to avoid missing out on sound feedback from your teams. It also helps negotiating by:1- flagging misalignment/divergent interests between global and local business units/channels, 2- collecting the right points of attention/information from the ground up and 3- identifying internal supporters and blockers.
A thoughtful governance structure (led by a global partnerships function/team/office for instance) can make a difference to coordinate efficiently such efforts and set clear roles & responsibilities for the next phase.
- Involving the right people early on isn’t trivial. It will sharpen your stand and help fine tune your commitments and negotiation plan.
2. Nailing down risks and accountability
Both parties usually negotiate in good intelligence to cover the spirit of the association. Yet, it isn't unusual to be complacent with grey areas, intentionally or not, as it is more convenient, easier, faster. This is the best recipe for future troubles as contentions will frequently appear from those very grey areas.
There must never be room for interpretation and this can be avoided by 1- agreeing detailed metrics/deliverables/processes, 2- listing what could be at risk and 3- defining the related accountability/impact/resolution process. Requests for clarification will necessarily emerge because what is obvious to one party isn’t necessarily to the other, what is a minor point for one may not be for the other (from specific financial cross borders transactions to accurate definitions of the sales targets, from specific binding commitments to accurate definitions of the marketing activities involved, countless examples can be found: devil definitely hides in the details).
- Having a proper "prenup" discussion may not be comfortable and will surely lead to subsequent rounds of negotiation, yet it brings two key benefits: 1- lack of ambiguity makes execution more efficient, 2- you know where you stand if issues arise.
3. Building transparency and trust
Transparency and trust are amongst the best ways to engage employees and build performing teams. That’s exactly the same with a partner.
Nobody wants to advocate internally the position of its partner while ignoring (and discovering later on) it lies on shaky grounds. Most of the time, retaining information really brings no upside. Each party wants to know where it stands with honest and updated information so they can anticipate and be prepared. Just have your partnership team be open and (most importantly) pro-actively communicate about internal struggles, end game timing, possible problems to come, lack of certainty on sensitive topics, realistic feedback on ongoing operation/execution or new significant issues emerging.
From experience, it contributes to building solid business relationships, respect and trust. It also makes future collaboration easier and more flexible.
- Giving pro-active visibility on your internal realities may bring limited gains in the short term, this is nonetheless a best practice to establish strong and long-term winning partnerships.
Finally
That being said, all should be done with grit and patience. Establishing a partnership culture also means driving change: at first, facing resistance or lack of internal support is a grim possibility and shouldn’t come as a surprise (not everyone sees the potential, power play may be at stake, teams need to be aligned, etc.). Perseverance is likely to be what you need to get the formula right and prove its value.
At Orange Business Services our CEO Helmut Reisinger made it very clear:
“winning deals hardly ever happens alone. This is an ecosystem game and our partners are playing an instrumental role in our successes”
Glad we got it right! #partnerships #businessdevelopment #elob #ProudToBeOrange
