Managing Partnerships in Business

The goal of most business today to reach the apex of competition and outmaneuvering competitors has entered a new trend of Joint ventures, business collaboration etc. This has fueled the growth of the world’s most successful IT companies. Partnering has proven to be one of the most powerful, quickest and effective ways to re-engineer a business. In today’s IT driven environment where IT deals with a lot of vendors for support to be provided for business, partnerships have taken even more significance. The vendor client relationship has now been replaced by a partnership approach for major IT initiatives.

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 intentions fail for a variety of reasons:

• Inadequate vision – partnership or associations 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 result is that frequently the partners 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 / association begins to have struggles and accelerates its demise.  When one of the partners feels good about his or her contributions than the other partner’s efforts it accelerates manipulations and domination.
• Lack of clear purpose –when interests are missing from the association and the only reason it is formed is financial gain without any defined vision and reasons of existence
• 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 or fundamental differences are likely to chip away at even the strongest bonds.
• Define Measurability: Clearly define how the performance of each partner will be measured and ensure that the goals defined are measured. This can be done by definining KPIS / SLA and monitoring mechanisms Also the measurement needs to be communicated clearly so that any issues that may come up in the performance can be addressed quickly
• Unplanned Exit–There is a need to contemplate every way the partnership will need to end or be dissolved.  Unplanned exit of one of the partner can have a profound impact on day-to-day decisions and operating strategies.

Mantra for Successful Partnerships: 

• Develop a clear decision making process. Also clearly define escalation matrix and who will be the final decision making authority. In most cases it would be the stakeholders or steering committees of both organizations that should be able to resolve disputes amicably.
• Moreover, be clear about the end game and determine in advance how partners can exit gracefully 
• Be clear about the external needs of your approach and assess the value of individuality of business and the risk to break up later.
• Clear defined individual goals aligned to organizational goals.

Partnerships / Associations / Ventures is often compared to marriages, because of the similarities they share- both are big and life changing decisions, which embrace mutual trust and respect and involve money. 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 partnership. This is why choosing right partner plays a role and is important to know as much as possible about a potential partner, before you get into the asociation 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.

About Author:

Kintu Racca 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: kintu.r@spluspl.com