April-09
This issue of Partnership Focus, is all about helping you take the right steps towards Partnership Success. In our first article we tell you the three things you must do to avoid Partnership Failiure. Additionally we also give you the ten success secrets to select the right partner organisation... the perfect combo! We share with you a book we thought interesting; and finally in our Partnership Tips series, the next valuable suggestion to help you create successful partnerships and alliances.
DIVORCE
Looming Business Partnership Failure
3 things you must do, NOW
By Dr. Vesna Grubacevic and Robin Power
The world of partnering can be split into two halves. Those who are in the 'Downward Spiral of Failure' and those who are in the 'Upward Spiral of Success'.

We know that, unassisted, partnerships will predictably fail, and often do 'Numerous surveys say 50 percent to 70 percent of strategic alliances in every industry don't meet expectations'. (Michael D. Lam, "Why Alliances Fail," Pharmaceutical Executive, June 2004 PricewaterhouseCoopers NEW YORK, Dec 4, 2008 (GlobeNewswire)

In the Downward Spiral of Failure, partners feel trapped in an unfulfilling relationship where the only way forward is to think of one's own interests and place them ahead of the partnership.

Quite often, these partnerships turn into adversarial relationships where contracts and service levels are the mantra and success is measured by the immediacy of the return and holding onto information becomes a lever to gain a tactical advantage.

Does any of this sound familiar when thinking of some of your own relationships with your partners; be they strategic alliances, distributors, marketing channels or even your key accounts?

Here are three steps you can take now to avoid failure:

1. Evaluate the performance of the current partnership. No relationship works well all the time and, when things go wrong, it is useful for all sides to take stock and plan a new route forward together.

Alliances and Marketing Partnerships: Gaining competitive advantage through collaboration and partnering - Gibbs+Humphries 2009

This diagram provides a framework around which to ask questions about the performance of your current partnership. According to Gibbs+Humphries (Moments of Truth or Distrust, Feb 08), there are three factors that determine whether an organisations partnerships are high performing; the quality of the relationship, relationship effectiveness and relationship efficiency.

  • The quality of the relationship is critical and revolves around commitment and trust
  • Efficiency drives the ability of the partnership to add and create value to the extent that higher levels of return on investment and gross margin can be enjoyed
  • Effectiveness is the ability of a partnership to actually deliver upon the original objectives

This questioning will help the organisation to clearly articulate the challenges faced in their partnership and gain the clarity needed to begin to repair underperforming, damaged or broken partnerships; or objectively review their status quo.

  • The partnership does not have a clear purpose and value proposition
  • The customers' response to the partnership offering was not as successful as was initially projected
  • The partners only discuss contractual outcomes rather than what they actually need to deliver
  • Milestones are being missed and contractual penalties incurred
  • No one knows how to measure the success of the partnership
  • Key people are being lost from the partnership at a critical final stage
  • The cultures of the partners are completely different

Taking this last example, you would need to carry out further analysis to understand what is causing this cultural misalignment between the partners.

2. In Depth Investigation. By firstly understanding the culture and behaviours in your organisation you will be better positioned to identify partner organisations that are aligned with your culture and behaviours. Because people and their behaviour drive performance, when the behaviours of the key people in two organisations are aligned, so is their performance. Aligned performance facilitates successful partnerships.

A key to making partnerships work from a cultural perspective is the alignment of values between the parties engaged in the partnership. The best way to achieve consistently great results, powerful focus and outstanding harmony and synergy in any business partnership is to align the values of the key people involved in the partnership in such a way that they are all heading in the same direction and achieving desired business results faster. Values are the glue that hold an organisation and any partnership together.

Because values change over time, it is important that you align them regularly to ensure that the internal motivation of the people involved in the partnership remain aligned with the goals of the organisation and the desired outcomes of the partnership. This alignment needs to go beyond simply communicating the values within and across the partnering organisations in order for these to create lasting motivation, and then be reflected in consistent behaviours and results.

3. Turn the Partnership Around into an Upward Spiral of Success. Once you have identified where the problems are in the partnership and clearly understood the drivers of underperformance, you will be in the position to address them head on rather than applying a bandaid solution to symptoms. Understanding the issues is one thing but it is actually addressing the identified root causes that will improve your partnership performance, and will set your organisation apart from the crowd.

Using the Affinity Engine™ - Partnership Repair diagnostic tool as starting point, Affinity Maker™ specialises in pulling existing partnerships out of difficulties and returning them to the Upward Spiral of Success.

If you want more from your existing business partnerships Contact Us, or start the completely confidential Affinity Engine™ Partnership Repair diagnostic.

10 SUCCESS SECRETS FOR SELECTING
THE RIGHT PARTNER ORGANISATION

Affinity Maker™ share ten insights learned while helping clients select the right partners.
1.Understand expectations: Getting clear on what each partner expects from a partnership right up front is critical to developing a successful partnership. This may require third party facilitation to assist the partners to really get under the surface and get the real expectations out on the table. The creating stage of a partnership is where all partners should be exploring what a potential partnership should deliver.
2.Develop a shared vision: To ensure strategic fit, a critical step to creating a win-win partnership is to create an agreed vision for the partnership that links back to the overall business goals of both parties. These types of partnerships -the ones that are built around jointly identifying and meeting market opportunities, as opposed to opportunistic alliances struck around a specific customer bid- are much more likely to be successful, long-term affairs.
3.Choose a partner with whom you're aligned: In the best partnerships, both parties know 'what they stand for', and know that their brands, values and working styles are aligned - they complement one another, rather than undermining one another's credibility. This means you can choose potential partners wisely, to ensure that both parties' reputations are strengthened by the alliance. Similarly, aligned styles and ways of working are vital, from transparent communications to straightforward dealings.
4.Work with credible partners: Part of your partnership success with depend on the credibility of your partners. Involve your customers when selecting a brand to work with, like you would when in testing new products or initiatives. The company we keep speaks volumes about us so it's essential that you involve your customers before committing to a potential brand partner.
5.Get to know potential partners: Spend time getting to know potential partners. Think about partnership as a process of forming relationships to do things, not just a structure. Make commitment, and trust, the centre line.
6.Find a partner you trust: An oft overlooked, but fundamental, requirement of a partnership is being able to personally trust your potential partner. You have to be sure that they are being honest about their motivations for partnering from the word go, but therein lies the Catch 22 of the situation. Before you are really 'in' a relationship it's difficult to know when someone's being honest, and yet this is the very time when you are deciding whether or not the two of you have a future together. Knowing whether or not to trust is something you learn, through experience, maturity and instinct. The short cut, however, is to partner with a company you already know and trust through years of reliable, dependable, honest transactional dealings.
7.Choose a partner who can partner: It's critical to know that your partner can and will deliver on their promises both now and in years to come; that they can and will grow, increasing their capability to meet challenges, as the partnership evolves. Both partners must know what is needed to partner successfully, discuss both parties' capability to do that upfront, and understand what the future aims of, and challenges facing, the partnership may be.
8.Seek Strategic Synergy: Identify if there are true complimentary strengths between the partners. To be successful, two or more partners must have a greater strength when combined than they would have independently.
9.Size Isn't Everything: Remember that size or scale of operations does not necessarily dictate the scope of a potential partnership. Again, it is more important that the strategic fit of the partners and their respective contributions to the service proposition are equally relevant to the end user and target market.
10.Know what success looks like for everyone: This is true at both a corporate and an individual level; mutual value doesn't mean the same value for all parties - you need to understand what a win is for each partner and how significant it is for them. That means knowing not just what they're promising you, but also what they've promised their stakeholders including the board. At a personal level you need to know what people are bonused on and what partners are incentivised to do. Once you've got all of this information, you can test levels of compatibility between partners.
SMART ALLIANCES
A PRACTICAL GUIDE TO REPEATABLE SUCCESS
Turn to any business section in any newspaper today and you?ll find no shortage of stories about high-profile international strategic alliances. Many are success stories. The majority, however, are not. Now, you can learn what separates the successes -like those of Corning, Mazda, and Oracle- from the failures. In Smart Alliances, the two senior consultants who made Booz-Allen and Hamilton the foremost authority on alliance strategy present eight practical steps any company can take to adopt the best practices of today's alliance leaders and turn them to their own competitive advantage. … FIND IT
Key to Success
Partnership Tips
Allow adequate time and resources: Many underestimating the amount of internal resource to allocate and the time required to prepare and plan. Developing a partnership involves multiple stages including selection, negotiation, creation, maintenance/ monitoring and development.
     
 
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