Managing Partnerships in Business

The ultimatum of the business today to reach the apex of competition and outmaneuvering competitors has entered a new trend of Joint ventures, business collaboration that has fueled the growth of the world’s most successful companies. Partnering has proven to be one of the most powerful, quickest and effective ways to re-engineer a business.

However, the irony of most partnerships is that it starts with promises of exclusivity or inimitability but soon runs into double-dealing, Squabbles or negotiations over exclusivity.

Partnership formed for the best of intensions fail for a variety of reasons:

• Inadequate vision – partnership tumbles out as the reason of alliance drifts and leads to goal misalignment.
• Ineffective decision-making processes–Disagreements are not necessarily a problem, but difficulties in resolving disagreements are .The upshot is that frequently the partnering organizations go in opposing directions that meet their own needs but not the strategic needs and direction of the partnership.
• Organizational Pride –This is something that usually shows up when a partnership begins to have struggles and accelerates its demise.  When one of the organizations of the partnership feels good about their contributions than the other partner’s efforts. This also could lead to accelerated manipulations and domination.
• Lack of clear purpose –when key interests are missing from the partnership and the only reason it is formed is financial gain without  defined vision and reasons of existence often leads misalignment of goals for the organizations.
• Lack of communication– lack of communication has been the reason of downfall for many failed partnerships. The fact is, problems are bound to arise with every new business venture, and proper communication at the earliest juncture is absolutely crucial to the ongoing success of the partnership.
• Differences of philosophy and ways of working–Differences in work styles within each of the organizations needs to be looked at or fundamental differences are likely to chip away at even the strongest bonds.
• Unplanned Exit– Unplanned exit of one of the organizations in the partnership can have a profound impact on day-to-day decisions and operating strategies. There is a need to study every way the partnership will need to end or be dissolved.

Mantra for Successful Partnerships:

• Develop a clear decision making process which has a good representation from all the partnering organizations
• Decide the end goal and the key reasons for the partnership and determine in advance how organizations can exit gracefully
• Be clear about external needs of the approach and assess the value of individuality of each business and the risks that may be occur if the venture breaks up later
• Clear defined individual goals aligned to organizational goals of each entity in the venture.

Partnerships or joint ventures are often compared to marriages, because of the similarities they share- both are big and life changing decisions, which embrace mutual trust and respect. Like a marriage, a business partnership often begins with enthusiasm and high expectations only to end in acrimony and legal proceedings. Thus nurturing this relationship is the mantra for successful partnerships. This is why forming the right alliances plays a role and is important to know as much as possible about a potential partner, before you get into the business together. In business, as in marriage, there are no guarantees—and it is easier to avoid mistakes than it is to get out of them.

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About Author:

Mohini Bhandari is a consultant in Systems Plus Pvt. Ltd. Within Systems Plus, she actively contributes to the areas of Technology and Information Security. She can be contacted at mohini.b@spluspl.com