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Not all potential partners are good partners – How to Develop the Ideal Partner Profile

Partnering isn’t the buzzword of the week! Establishing channel partners and strategic alliances is a critical business strategy for many organizations and is viewed as an essential element for growth and profitability. A successful partnership can produce results that neither partner could have accomplished on their own. 

The potential of gaining marketplace advantage and increasing sales by teaming up with another company whose culture, products or services fit well with yours is very real, making strategic alliances not only seductive but critical to a company’s growth over time, if done right. But given the high rate of failures in partnerships and alliances (70% of partnerships and alliances fail, and 23% companies do not recover their investments in their partnering efforts), I’m always amazed to see companies rushing to partner without having a clear vision of what their goals and objectives are, as well as having a detailed picture of the type of partner they need in order to achieve the desired outcome. 

It’s of key importance that you look at your business reality before selecting any alliance partner. That you develop your alliance strategy to support your vision, mission, and objectives. Gaining a thorough understanding of your objectives, competitive positioning and landscape, strengths, limitations, competencies, and capabilities will help you determine whether an alliance makes more sense than buying a company or building the capabilities internally.

Let’s start at the beginning of the cycle. Before you start targeting potential partners, it’s critical to “Develop the Ideal Partner Profile.”  Since it’s unlikely that you will find everything you’re looking for in a partner, it’s vitally important that you determine the “Must Haves” versus the “Nice to Haves.”

What should be included in the Ideal Partner Profile?

1. Identify the markets you’re trying to reach. Are you looking for?

  • Access to a new industry or market segments;
  • Access to new customers;
  • Offer complimentary products or services; 
  • Deep understanding of the customers’ needs and requirements;
  • Influencer or thought leader;….

Understanding the partner’s position, reputation, and capabilities in these markets are crucial to selecting the right partner.

2. Define the type of organization you’re looking for in terms of size, characteristics, organizational structure and location.

  • Are you looking for an industry giant or dominant player in a certain segment or industry, or a more specialized organization that has unique capabilities or position in that market? 

Word of caution – big companies don’t always make the best partners – if my opinion, you should only seek out the company of giants if you have something compelling to offer them that they don’t already have easy access to and they consider to be a priority

If you’re looking to partner with a small, innovative and nimble company instead, you have to determine if the partnership might be too expensive a proposition for them to consider.

3. Ensure that the business strategies, goals, and priorities aligned with the goals of the partnership.  

  • Will the relationship be key to contributing to the attainment of your goals and priorities?  
  • What are the long-term goals of your alliance partner and are they in alignment with yours?
  • What financial commitment are they making or willing to make in those areas?

It’s important to do your homework in researching potential partners to ensure that the goals and priorities of both organizations are aligned.  The partnership has to be important for both organizations in order to succeed.

4. Make a list of critical skills, capabilities, and assets the partners must have … and are willing to make available to the partnership.

One of the best reasons for entering into a partnering is to acquire skills, capabilities, assets and resources that you couldn’t easily acquire on your own.  

So take an honest and detailed inventory of your skills, capabilities, assets and resources and make a detailed list of the skills, capabilities, assets and resources you need from a partner in order to achieve your goals and address the gaps.

5. Find out what the strengths and weaknesses are and how they might impact the ability to achieve the goals of the relationship.  

A company cannot be skilled at everything; each one has its special excellence. In a partnership you need to complement each other in terms of strengths, capabilities and competencies (one of the most powerful reasons for teaming up is working with a company who is strong where you’re weak and vice versa – (here’s an interesting fact to keep in mind – our strengths are stronger and our weaknesses weaker than we realize).

Ideally you want a partner whose strengths offset your weaknesses.  In other words, your weaknesses become the strengths you are seeking in a partner. 

Be brutally honest, in not only what strengths you’re looking for, but also what you have to offer to the partner. This is extremely important because this step is often how you can tell the professionals from the amateurs. Remember that it has to be a win-win for all parties involve, especially if you need them more than they need you. 

6. Make sure that partnering and collaboration is a core part of their business strategy and they have a track record at partnering successfully.

All too often businesses form alliances that offer great promise in the beginning, yet fail to deliver the results both parties anticipated. Instead, they become mired in “strategic gridlock”: persistent problems that grind progress to a halt.

The amount of experience you and your partner have in creating partnerships can make the whole partnering process easier and faster. The importance of partnering in a company’s overall business strategy and DNA cannot be overstated. So look for companies who have had experience in partnering before.  Look at their successes; also look at their failures and how/what they’ve learned from them. 

7. Assess the business and cultural fit… is there compatibility between the two organizations? 

Do you have similar values, culture, marketing style…compatibility is extremely important as it brings a level of understanding and acceptance. These may be considered “soft” criteria, but in my experience, these are the issues that are the ultimate showstoppers and derailleurs of so many, otherwise promising partnerships. 

Pay particular attention to:

Decision making style – how are decisions being made in the organizations? For instance, are individuals empowered to make their own decisions (within reasons), or do all decisions, big or small, have to be escalated to a certain level of management?  

Do they make decision quickly or by committee? 

Is there a culture of accountability? 

How do they solve conflict and disagreements?

What the organization’s attitude towards risk?  Is risk-taking encouraged and rewarded?

How are people involved with the partnership compensated? …. 

8. Do you have a current relationship and a track record of working together already? 

If so, what is our current relationship and will an alliance positively or negatively impact the relationship?

It’s tempting to want to partner with companies and people we already know.  And many times, the greatest source of potential partners may be those organizations you already have some level of relationship with.  It may be a current customer, supplier, or a company that you’ve worked with informally in the past. 

9. Access to executive engagement and management at all levels of the organization.

Strong executive sponsorship, assigning the right people, investing the right resources with the right skills and experience at every level is critical to the success of the partnership.

Will the people involved/engaged in the day-to-day operations of the alliance as strong as the people who are negotiating the deal? 

10. Build the infrastructure, tools, processes and communication.

If you just communicate you can get by. But if you skillfully communicate, you can work miracles! In the early stages of a partnership, communicating helps to prevent misunderstandings and assure each side of the other’s trustworthiness. Later in the relationship, a continuous flow of information makes the work more efficient by keeping the two companies synchronized. 

In assessing your own capabilities and those of your potential partners, look at systems, tools and processes each of you use.

  • To what extent are the systems and processes used by your alliance partner compatible with yours? 
  • Do you have the ability to easily communicate and collaborate in the relationship?
  • Will the teams be able to work together? Will they be able to visit each organization’s site?
  • Will the teams have access to the data and information they need to achieve their goals promptly and efficiently?
  • And maybe the most important question of all is – Will you trust your partner?

Trust between two collaborators is like the rope between mountaineers on a snowy ledge! Trust is the linchpin in any partnership, no trust no partnership! When there is trust both companies can concentrate on their separate responsibilities, confident that the other one will come through – never, ever partner with people you cannot trust.

 

Small Bio

As a revenue acceleration strategist, Francine helps companies develop and executive sales and partnership strategies that deliver results. Working with global industry leaders in the high tech and consulting industries, Francine has negotiated over $250 million worth of business solutions and strategic alliances worldwide. 

 

 

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