I will publish my ebook “25 tips for successful Partnerships and Alliances” in parts here on my website. Every other week a tip from the book will be shared, in the weeks in between I will publish my regular column. If you prefer to read the tips in the ebook faster rather than wait a full year then click here to purchase your own copy of the book.
Introduction part 2
In part 1 we have seen what alliances are, reasons why to partner and also what the best approach is towards creating and managing successful alliances. Alliance formation is simple, but not an easy task. My 25 tips for successful partnerships as described in this article series highlight the most important elements to take into consideration when creating or managing alliances and partnerships.
Here is a quick overview of these 25 tips:
- Know your initial reason for entering into a partnership and focus on that initial reason during the formation of the partnership. Once formed and operational, growing the scope of the partnership into other areas is generally easier than initially creating a partnership that has a continuously expanding scope.
- Be clear on your reason for partnering. Many companies just jump into a partnership because they view it as an opportunity. Others enter the partnership because they like each other and feel they can create something beautiful together. If you’re not clear on your reason for partnering, you may end up making a false start and landing on the wrong side of the 80% rule.
- Do a proper fit analysis on your potential partner, as it will help you select the right partner. It will show you which areas you are the same and which areas you are different from each other. The differences will be the points you’ll have to pay attention to during the alliance management phase.
- Ensure a three-way value proposition. Without value proposition, there will be no room for a healthy partnership. The value proposition needs to deliver value for the three parties involved: your partner, your own organization, and the customer.
- Create a contributions, needs and benefits matrix before entering the first conversation with your proposed partner. This will help you create a clear picture of how your partnership will look like as well as assist you in preparing for a solid first meeting. Remember: Those who forget to prepare are preparing themselves to be forgotten.
- Ensure solid executive sponsorship. Your partnerships are not there just for fun. They are supposed to be of strategic importance to your organization. This means your top management has to sign off on it as early as possible to save you time and resources as well as to speed up alliance formation and management.
- Set a cadence of governance. Being clear about roles and responsibilities is one thing. However, managing the stakeholders is another. You need to create a schedule that defines who in your partnership needs to have contact with whom and at what frequency.
- Understand the cultural differences. Your partner will be from a different company with quite likely a different culture. Even within your own company, different cultures will appear. Understanding these differences inside your own organization and your partner’s organization is the first step towards a successful joint partnership culture.
- Agree on a set of alliance core values and operating principles. It will help bridge the differences in culture and operating styles. It’s good practice to review the core values and operating principles in steering committee meetings to ensure everyone is reading on the same page.
- Be clear on the roles and responsibilities in both your own and your partners’ organization. All too often we tend to make assumptions about roles and responsibilities. Clarify these roles and responsibilities early on and maintain that clarity with the help of a simple peer-mapping tool.
- Build and maintain your business plan from the early stages on. Business or operating plans are the backbone of your partnership. Start building one before you actually approach a partner and keep on refining the plan during the creation and management phases. A partnership will thrive with an active plan and not with a “desk drawer” plan.
- Make sure the objectives for partnering are aligned for both partners. There’s no need to have the same objectives, but the objectives of the partners in the partnership need to be in line for them to be successful.
- Agree on an exit plan during the negotiation phase. It may sound counterproductive, but it’s better to agree upon the way to exit in the early stages when the atmosphere is good and you don’t feel the need for it. After all, it’s better to know how the fire escapes works before a fire occurs.
- Prepare your partnership to follow a structured process. A structured process contains the roadmap to successful partnerships. Keep it pragmatic in a way that fits with your organization.
- Be flexible in transitioning the partnership when circumstances change. You will start the partnership with an intention and scope based on what you know and your strategy at the time of creation. However, circumstances, the market or the opportunity may change. As such, it will be good to transform the partnership into a new form or shape to ensure future success.
- Sharing is the foundation for partnering. Without sharing, it will be difficult to create a partnership or alliance. However, do know what you share, when and with whom. Sharing your intellectual property without a proper non-disclosure agreement in place is not the smartest thing to do.
- Communicate, communicate, communicate. Communicate and check your communication to ensure that the message you meant to communicate is properly understood.
- Create an internal strategic alliance definition. All too often we assume that my understanding of a term is also your understanding. Don’t make assumptions but ensure that you have one common understanding in your communication of what a partnership or strategic alliance is. Creating your own internal definition helps to align people and departments while going forward.
- Be clear with your prospective partner on the terms you use. If the partner talks about a joint venture, do they really mean sharing stock or are those the words they use to describe what you would call a partnership? Clarity precedes mastery.
- Build and maintain trust. Trust is hard to build but easy to lose. You have to build and maintain trust constantly in your partnerships.
- Avoid hidden agendas. Hidden agendas are partnership killers. The trust in an alliance is killed the moment you have a hidden agenda or you start feeling your partner has one. You will always doubt what the other really means, and you will never completely trust your partner, and vice versa.
- Manage your stakeholders. Ideally, everyone involved in a partnership should be supporting the partnership enthusiastically and working to move it forward. Unfortunately, there will be stakeholders in your alliance who won’t like it or like it less than you do. You need to work these stakeholders to transform them into champions or cheerleaders for your partnership.
- Make sure all stakeholders are on board by the time of alliance launch. All too often we see alliances going through difficult times because the alliance management teams forget to bring all stakeholders on board. Making a proper stakeholder analysis before the launch will help prevent this problem.
- Measure alliance performance on leading indicators to adjust outcomes. Revenue is important, but it is an outcome, a lagging indicator. When measuring your alliance’s progress, measure the leading indicators toward alliance success and revenue instead of just looking at the result at the end of the line.
- Measure and evaluate your progress. At the beginning of an alliance, you have set some clear goals. Along the way it is important to know how you are doing so you can adjust where needed and, thus, stay on the right course to alliance success.
These are the 25 elements you need to meet in order to create and maintain successful alliances and partnerships for your business. Without most of these elements, whatever partnerships or alliances you forge for your business will flounder instead of flourish. I shall elaborate on each of these 25 elements along the way.