As a CEO, sustaining growth in the highly competitive global economy is
a key challenge. More and more business leaders are looking for the solution
outside their own organisation. Many see strength not from facing the competition
alone, but by building sustainable partnerships and alliances.
Yet another CEO survey(1) reveals that collaboration
to achieve competitive advantage is rapidly becoming a strategic imperative.
By 2008 it is estimated that 62 per cent of companies worldwide will be pursuing
Negative fear of competition and a closed door policy is being replaced
by a positive collaborative outlook. Companies recognise that by fostering
close relationships across geographic and organisational boundaries they can
open up new and previously unconsidered profitable opportunities and partnerships.
While some organisations around the globe are starting to reap the benefits
of such collaborations, many business partnerships are still failing to deliver
the promised mutual value. The reality is that partnerships exist not so much
in the fine print of legal documents, but in the hearts and minds of the partners.
As one public utility executive, with extensive experience in offshore BPO
relationships, said in a recent GBPA survey: "Partnership success = capability
Partnerships require not just a different model. In a boundary-less world
- where one moment you are competing with an organisation and the next you
are collaborating - they require a fundamentally different attitude.
From work GBPA has carried out with its corporate members, there are some
fundamentals for a mutually profitable partnership. Here are the top 10 for
- Make sure your partner is equally committed
The success of the partnership must be fundamentally important to all parties
concerned. Partnering with an ambivalent organisation is no good - the partnership
must be valued in the same way.
- Don't rely on magic to make it happen
Signing the partnership deal is one thing. Both parties then have to demonstrate
their commitment to the partnership through actions. This does not happen
magically - real people, real time and real skills are required to make
the partnership a success. It is vital to assign committed resources to
developing the relationship.
- Share the same overall objective
A clear shared vision and overall objective for the partnership are essential.
However, each party's individual interests may be different and need to
be understood and acknowledged. For example, two organisations may need
to partner to enter the Japanese market. One chooses to do this to develop
a new revenue stream, the other to increase brand awareness and profile.
From the outset, both parties need to be transparent about their own objectives
and clear about the shared objective. And unless these are clearly documented
to ensure no misunderstanding, the partnership stands little chance of success.
- Integrity and honesty are essential ingredients to
Before entering into a partnership, identify the behavioural rules of engagement.
It should go without saying, that integrity and honesty are the fundamentals
of a good business relationship, but so often they are never discussed and
only implicit in the way organisations relate to one another going forward.
The 'implied' approach is based on assumptions - and assumption is one of
the key obstacles to the success of a partnership.
- Communicate, communicate, communicate
Clarity and transparency of communication, not just between business partners
but also within each of the organisations is essential. Too often businesses
blame governance as the key reason for partnership failure - whereas the
issue is often poor communication, particularly lack of communication through
both organisations as to the partnership's objectives and benefits.
A communications plan needs to be developed for the partnership with specific
roles, responsibilities and processes agreed to ensure the flow of knowledge
and understanding between and within the organisations.
- Build flexible rules
Successful partnerships mean that you will need to manage what at times
seem opposed, or even irreconcilable issues. Contracts and SLAs, for example,
need to be detailed and precise, and exit clauses established. Discussions
on these elements often lead to resentment with organisations resorting
to a protective positioning - yet flexibility is essential.
A collaborative approach to contracts where all parties involved (including
the lawyers) are incentivised on the success of the partnership is the way
forward - rather than an emphasis on penalty clauses.
- Aim to harness cultural differences
Many organisations avoid partners whose cultural values are strikingly dissonant.
Yet what is the point of partnering with a company too similar? Collaboration
is necessary to stimulate ideas and identify innovative approaches. Some
degree of diversity is essential.
The trick is to harness the differentials between you to achieve a positive
outcome. Those organisations with a high degree of cultural sensitivity
will be the most successful in the growing global economy.
- Get the business model right
Create a separate, distinct virtual business entity for the partnership
where all parties have an equal stake in that entity and so will contribute
to make it a success. As a separate entity, the partnership is likely to
be most successful if it has its own organisational structure with separate
governance, management and operations procedures outlined.
- Maintain the momentum
For a partnership to succeed it must have all the energy and urgency of
an individual entrepreneurial business. There must be an inherent desire
from all parties for success, with clear strong leadership to instil a sense
of urgency and pace.
- Ensure an A-class team
People make a thing happen. People get results. For a partnership to succeed
it should have the best people - both at the managerial and operational
level. These people should be as committed to the partnership as the leaders
of the parties involved and have the right skills to develop the full potential
of the partnership.
(1) 10th Annual Global CEO Survey, Price Waterhouse Coopers, February 2007