5 key lessons for successful business partnerships

Organisations are partnering more and more and it is a model that fits today’s market conditions. When two organisations decide to work together, it is always with the best intentions and hopes for the future but what if it doesn’t work out? How can you minimise the risks?

Partnerships work because they give service providers a way to build out their service offerings or extend their distribution capabilities efficiently and with limited financial risk. Partnerships also help organisations to accelerate innovation by allowing service providers to test more services in their markets while reaching new customers in new places.

Partnerships that don’t work can drain resources, deliver very little return on investment, or ruin your reputation. There’s always risk when partnering but when it works, partnerships can set both organisations on a path to long-term gains both financially and in innovation.

The top five most valuable factors for a successful partnership that I’ve learned over the years are:

Choose the people, not just the best technology

It’s more important to work with the right people than to get the technology right. Of course, the technology needs to be good. But for long-term success you need a business culture that matches your own. Partners need to commit themselves and show the capacity to learn and absorb each other’s skills. There also need to have mutual gains. It needs to be a win-win situation.

Have a framework and work to it

Your organisation should have a framework for partnerships in place to accelerate the on-boarding of new partners and demonstrate a commitment to the partnership model. This can mean a system to quickly measure success or failure, a legal structure to manage the business relationship, or a framework to facilitate consensus, problem solving, goal sharing, improvements and most importantly, how you communicate and share.

Sign contracts but never look at them again

The best partners have a commitment to the greater good of the relationship. There is a common understanding of the market and how to enter it. It doesn’t matter if partners step out of the bounds of the agreement. Both sides need to share the risks, power and agendas. If one of the parties starts taking a close look at the clauses, it may be the beginning of the end.

Understand your partner’s roadmap

It is critical that you understand where your partners are headed in the next three to five years. If you are not both headed in the same direction, it will be a short-term partnership that delivers limited returns.

Make your partner successful

Above all else, you should be focused on making your partner successful. Enabling your partner to succeed will result in a strong co-operation and bigger returns for you in the long term.

Partnering is a critical element of our business and something I am passionate about exploring. If you’d like to learn more, please get in touch.