Identifying, building and maintaining successful strategic partnerships are critical to accelerating business growth. Strategic partnerships play an integral role in a company’s growth, profitability, capabilities, cost structure, customer service experience, efficiency, focus and culture. An unsuccessful partnership costs businesses time, money, resources, reputation, and their competitive edge. Here’s three imperatives for building successful strategic partnerships that form the basis of a collaborative relationship:
1) Mutual Relevance. Successful partnerships are built on the premise that the value of each party’s business with the other is meaningful. In other words, if a $250k contract with a partner means just as much to them as it does to my business, then we have a mutually relevant partnership. Why is this so important? It’s important when things do not go as planned, there is an issue to resolve, or we need the attention of the partner to move the business forward. If the other party doesn’t stand to lose very much or it not meaningful enough to them, then chances are they may not be as motivated or quick to resolving issues or getting the right people involved. It’s also important for establishing joint plans where partners feel that there are investments on both sides to achieve goals & objectives such as time, resources, money, or management attention.
2) Leverage. Now, we are not talking about who has the upper hand in a relationship, we are talking about how we leverage people to make our business better. Do they have relationships that are much more difficult to build directly? Do they have capabilities that would be expensive to build from the ground up? Do they have skill sets or expertise that would be time consuming to develop in-house? Is their company culture a good fit with yours? You may be asking what company culture has to do with leverage. Leverage is about choosing a strategic partner that will enable your organization to achieve its business goals. If their culture is in complete alignment with yours, then business meetings will be collaborative, issues will get resolved more quickly, and the business will accelerate. That’s leverage.
3) Premium Pricing. We all know the saying “you get what you pay for” and then what do we do? We choose the low cost provider. So many businesses issue RFPs, check-off all the boxes and get everything they asked for a rock bottom price. Success? Yes, until the first problem arises. Then the partner says that’s not what you paid for, they don’t have enough margin to solve this issue, or cannot provide that service level because they aren’t making enough money on the deal. And what inevitably happens? Hours of people’s time are deployed to resolve the issue or you get a purchase order for “additional services” or products. In my experience, ensuring your partner is making a healthy (but not inflated) profit is a good thing. It allows them to invest in their business, improve service delivery, helps solve problems quickly, and more importantly, draws management to get involved much more quickly. Why? Because you’re a good partner!!
Are there other factors that influence building great strategic partnerships? Absolutely - transparency in communication and information sharing, process integration, relationship management, executive sponsorships, regular business reviews and so on. However the three imperatives will set the foundation for those partnerships to be productive, healthy, and engaging. They will become an indispensable asset to achieving business objectives, accelerating growth, and fostering a successful partner ecosystem.