Joint Venture

Business Plan


HR Action Steps to Prepare for a Successful Joint Venture






Business Strategy. Begin with a sound, well-articulated strategy. Before moving forward, determine and explain why you wish to enter into a joint venture, why you have chosen your partner(s), and what you hope to achieve. Define involvement (managerial, capital, etc) of the parent companies and how long the JV will last. Put in place strategies to define governance, accountability, decision-making process, and conflict- and issue-resolution procedures. Ensure buy-in and participation at the highest level. Consider outcomes: what could cause you to terminate the joint venture, and what is the preferred exit strategy.






Human Resources (HR) Strategy. Develop HR strategies that align and support the goals of the JV: develop a distinct identity and culture for the new organization; communicate aggressively to employees; and establish distinct career paths, management, and a means of return for employees transferred to the JV. Create compensation, incentive, and retention programs tied to the success of the JV. Maintain open communication between the HR departments of the parents and the JV.

Leadership. Define a process for leadership selection that's seen as fair and credible, and name top-tier leadership as soon as possible.





Look for key indicators of leadership potentials such as behavior, past experience, and measurable outputs.

Talent. Make the identification, retention, and motivation of the key talent a top priority. As times of uncertainty can lead to defections, take strong counter-measures to prevent them. Paying close attention to the specific skills, knowledge, and behavior that will be required to achieve the new organization's business objectives, identify the key players in both the parent companies who will be needed during the transition to a joint venture organization and beyond. Be aware of which employees are most at risk for recruitment by other organizations and collect data on the causes and costs or turnover that might influence which employees to target and which retention practices to implement. Conduct employee research to help the new organization determine what matters to employees and can serve as the foundation for all programs and incentives.

Communication. To engage and motivate your employees, communication should be frequent and used to create a shared vision, establish a connection with leadership, explain the new rules, support the individual transition process, aid in retention, and ultimately, define the new organization in terms of "We" instead of an "It" or "They". Share as much information as you can, and never sugar-coat or make false promises.




Prepare for a successful joint venture

Human Resources (HR) action steps





screening of prospective partners 

joint development of a detailed business plan and shortlisting a set of prospective partners based on their contribution to developing a business plan

due diligence checking the credentials of the other party ("trust and verify" trust the information you receive from from the prospective partner, but it's good business practice to verify the facts through interviews with third parties)

development of an exit strategy and terms of dissolution of  the joint venture

most appropriate structure (e.g. most joint ventures involving fast growing companies are structured as strategic corporate partnerships)

availability of appreciated or depreciated property being contributed to the joint venture; by misunderstanding the significance of appreciated property, companies can fundamentally weaken the economics of the deal for themselves and their strategic alliances.

special allocations of revenue, gain, loss or deduction to be made among the partners

compensation to the members that provide services.