When it comes to running a business, the relationships you build with other companies can spread your success even further. Talking about strategic partnerships to be precise, a mutually beneficial business relationship that might aid your business' growth at a reduced cost. But understanding these partnerships, can assist you more with locating the right one for spreading out your reach to potential customers.
Partnerships never go out of style. Companies have worked with partners across countries, businesses or within their value chain for a variety of reasons, whether from a desire to expand or a need to cut costs. Yet, in recent years, the growth of partnerships has accelerated, driven by the benefits of risk sharing and resource pooling, technology convergence and knowledge diffusion. They come together to take advantage of complementary geographies, marketing and sales strengths, or capabilities in other functional areas of the business. The more complex the business environment becomes, the more such relationships make sense.
The fundamental goal of a strategic partnership is for companies to become "partners of choice", simply through building entire portfolios of practical and value-creating partnerships, offering information, services and other resources that the other company has limited or no access to; thus, sharing the risks and rewards of the decisions of both companies.
It might look straightforward, but in reality, successful partnerships don't just happen. Integrating external partners into your existing enterprise data ecosystem and bringing different business cultures together can be challenging.
Partners need to set clear foundations for their relationship and strive to nurture them, emphasizing on accountability within and across partner companies, with the use of metrics to gauge success and create more value than they would otherwise. Both parties need to establish an effective data exchange and communication method, ensuring a time-sensitive collaboration and a unified organization of the allied tasks and projects. In other words, transparency is key during negotiations, ensuring everyone's understanding of each other's goals, encouraging trust and collaboration among partners and sharing commitment and competencies to create value.
Strategic partnerships inevitably involve challenges that have to be resolved efficiently to ensure the longevity and success of the alliance. Open communication lays the foundation for successful strategic partnerships. Connecting with the partner is crucial, recognizing each other's capabilities, cultures and motivations behind the deal are major focus points during early negotiations; i.e., it is important to spend as much time as you can on their turf. It is essential to understand which partner is best at what; but this process must not stop at signing, it should continue to be discussed as part of day-to-day operations. And you cannot think of your partner as a "WIN" deal; you must always nurture their understanding of your offer and make them appreciate the value that this partnership provides; otherwise, they will sooner or later fail to reach their full potential and eventually quit the agreement.
Equally important, invest in tools that can be used to help bridge any gaps, make sure to follow the processes previously set in meetings so that teams know what to expect, and organize a team that tracks and reviews the partnership's progress against defined metrics and helps spot potential areas of concern. Good governance is the linchpin for successful partnerships and success depends heavily on adopting a proper strategy, ensuring your partners understand and comply with all internal policies and external protocols, and properly aligning processes and operations within the company and between partners.
Think of your partners as the bread and butter of your business, but getting them to choose you in the first place can be a major cause of frustration for some companies, as more often than not, your partners are snowed under with options from other companies betting to collaborate with them, and it's up to you to stand out and show them why they would go with you over anyone else.
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