Spend enough time in the business world and you will soon be overwhelmed by the number of useless and meaningless catch phrases. Most of the time, they are best described as verbal diarrhea.
Many consider the term partnership (sometimes called strategic alliance) as one such term. Let me respectfully disagree. A well thought out partnership can yield huge synergies for both parties but it is a fickle and fragile creation.
If you too are a believer in the value of partnerships then the next logical question is how do you make it work?
Equal value: In order for a partnership to work, both parties have to bring equally significant value to the table. If one party is hoping to syphon value from the other, then this is no longer a partnership but rather a parasitic relationship where one gets the value and the other walks away empty handed.
Dependence: If the above condition holds true, then both parties see a clear need to uphold the partnership. The value must be great enough for both parties to feel interdependent. The parties succeed together or fail together.
Investment: Companies are driven by activities that increase their value. The only time a partnership makes sense is when each party has a gain in the other’s success. The success of one must translate into value creation for the other.
Transparency: The cornerstone of partnership is trust. Trust in the good will of the other party and trust that the agreement is just. A sure way to break that trust is to hide information. It is critical for both parties to operate transparently (when it relates to the partnership). In the most successful setups I have seen, each company has placed its own employees in the other’s company. These “foreign” employees are embraced and quickly accepted as part of the team.
Integrity: In line with transparency is integrity. Integrity is a must. It must be the driver behind every decision. Those who have worked with me know that this is one of the points I am absolutely committed to. Always lead with integrity.
I have seen countless situations where partnerships have yielded huge benefits for both parties. In one instance, a customer worked with a parts manufacturing supplier to optimize the supplier’s processes (improve yield, reduce waste and improve their overall profitability). In return, the supplier granted the customer a percentage discount for every additional dollar saved or earned. Both parties walked away with more value.
Take the time to think about possible partnerships in your business. Who can you add value to and who can add value to you?
