Building Partnerships

By Vadim Kotelnikov, Inventor & Founder, Ten3 BUSINESS e-COACH, 1000ventures.com

"Partnerships between people, between companies, with customers and with suppliers create greater value for all concerned." – Stanley C. Gault 

Key Features of Partnerships

  1. The voluntary nature of partnerships

  2. Common interest

  3. The mutual dependency that arises from sharing risks, responsibilities, resources, competencies and befits

  4. Synergy – the concept of value added or the total being greater than the sum of its individual parts

  5. Explicit commitment or agreement on the part of the participants

  6. Working together – in the most strategic partnerships, the partners work together at all levels and stages, from the design and governance of the initiative to implementation and evaluation.

  7. Complementary support

  8. Shared competencies and resources – partnerships are a mechanism to leverage different types of resources and competencies, including, but not only, money.

  9. Good communication

  10. Respect and trust

Two Primary Approaches to Cooperative Strategies6

  1. Formal: You can develop formal contracts with your partners. These contracts would specify how the cooperative strategy is to be monitored and how partner behavior is to be controlled. This approach is to be used if your interest is to minimize the alliance's cost and to prevent opportunistic behavior by your partner.

  2. Opportunity Maximizing: If the focus of the alliance is on maximizing value-creation opportunities and opportunity-driven business development, you and your partner must be prepared to take advantage of unexpected opportunities to learn from each other and to explore additional marketplace possibilities. Trust-based relationships and complementary assets must exist between partners for this approach to be used successfully. In this less formal approach, monitoring costs are reduced and opportunities to create value through cooperative relationship are maximized because alliance partners can pursue potential rent-generating opportunities that aren't available to partners in more contractually restricted alliances.

Lessons from Successful Partnerships5

1. Purpose

  • Clear and common goals based on mutual benefit and  understanding of individual goals and motivations

2. Process

  • Role of intermediary leadership

  • Understanding and consulting stakeholders

  • Clarity of roles and responsibilities

  • Understanding resource needs, capacities and constraints of all the partners

  • Communication - regular, open, transparent, with accountable structures for joint decision making and conflict resolution

3. Progress

Defining Your Core Competences

  1. They should make a disproportional contribution to stakeholder value

  2. They should opens door to other opportunities

  3. They should represents such a unique blend of tacit and explicit knowledge that it cannot be copied by others

Joint Ventures Managing Cross-cultural Differences Leadership

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Business Partnerships (slide show)

Strategic Alliances

Mergers & Acquisitions

Joint Ventures

Mutual Creativity

New People Partnerships

Customer Partnership

Business Process Outsourcing

People Skills

Knowing Yourself and Others

Building Your Cross-Functional Excellence

Effective Listening

12 Rules of Effective Listening

Influencing People

Persuading People

Conflict Resolution

10-Step Guideline for Resolving Inner and Outer Conflict: a Yoga Approach

Negotiating

Conduct During Negotiations

Business International

12 Tips for Global Business Travelers

Competitive Advantage: US versus Japan

Cross-Cultural Differences: China and United States

Russians: Comparative Character Features (a slide show)

Cultural Intelligence

Managing Cross-Cultural Differences

Eastern versus Western Philosophy

Jokes

Business Partners

Cross-Cultural Differences

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Partnership Defined

Partnership is a voluntary collaborative agreement between two or more parties in which all participants agree to work together to achieve a common purpose or undertake a specific task and to share risks, responsibilities, resources, competencies and benefits.

Why Partner with Others?

Meaningful partnerships are the foundation for success. Partnerships is what enables many companies to make continuous improvements. By sharing with others, you can direct your resources and capabilities to projects you consider most important.

The 80/20 Principle asserts that 80% of results come from 20% of effort. Thus, to achieve more with less, you must be selective, not exhaustive. In every important sphere, work out where 20% of effort can lead to 80% of returns. Strive for excellence in the few key areas, rather than for good performance in many.

Focus your firm's resources on what you do best and what creates sustainable competitive advantage and tap to the resources of others for the rest. To decide why, when and how to partner with others for complementary resources, weight the small amount of cost savings that doing non-core-competence tasks might bring against the distraction and investment that will be required to stay up to date over time.

Synergy

Synergy is the power behind business partnerships. In a business partnership, two parties leverage their assets (resources, capabilities, expertise, client base etc.) for the mutual benefit of both... More

Growing Role of Partnerships in the New Economy

In the new knowledge economy, the principles of business strategy are being transformed. Instead of a focus on physical assets and economies of scale, the drivers of success reside in connectivity and intangibles. Businesses increasingly need to develop and manage complex ecologies or organizations around themselves so as to succeed. The selection of strategic partners with whom to collaborate is now becoming a life or death issue for most firms.7

 

Barriers between companies, which used to be solid and absolute, are now permeable. "Iconoclasm and creativity are now the keys to success", writes Mark Stevens.1 "For generations companies built moats between themselves and their competitors. Today the most successful companies build bridges. And that's only the beginning".

Increasingly corporate leaders must adopt, practice, and orchestrate what appears to be conflicting policies, such as joint-venturing with competitors. In today's new world, the competitive pressure has been intensifying, it is becoming harder to achieve leadership and stay on top, and, thus, competitor in one market may establish alliances in another. Acquisitions of and mergers with competitors have also become a common practice. "More and more, those who can examine the code, challenge it, and rewrite it for success in their companies, fields, and industries will be the leaders and role models."1

Strategic Alliances

In the new economy, strategic alliances enable business to gain competitive advantage through access to a partner's resources, including markets, technologies, capital and people.

Teaming up with other adds complementary resources and capabilities, enabling participants to grow and expand more quickly and efficiently. Especially fast-growing companies rely heavily on alliances to extend their technical and operational resources. In the process, they save time and boost productivity by not having to develop their own, from scratch. They are thus freed to concentrate on innovation and their core business... More

Joint Ventures

Joint ventures involve sharing the risks and rewards in an enterprise or project co-owned and operated for mutual benefit by two or more business partners. There are good business and accounting reasons to create joint venture with a company that has complementary resources, skills or assets, such as distribution channels, technology, or finance... More

Business Process Outsourcing (BPO)

Although the quest for cost savings inspired initial forays into offshore outsourcing, companies are now using offshore delivery to achieve significant improvements in business performance - transforming outsourcing from a tactical and technical point solution to a long-term business strategy for creating and defending competitive advantage. The decision makers are looking to leverage global sourcing to gain long-term process optimization, business-oriented measurements, and enhanced control over IT assets and activities.8... More

Extended Enterprise: Virtual Integration

Through virtual integration, the walls between enterprises crumble. Companies stop being self-contained business units that produce products or services, and become integral elements in a larger system. In the new world of virtual integration, no matter who signs the check, all the people are working together for a common cause. Vertical integration performs, virtual integration innovates... More

Steve Jobs' 12 Rules of Success

  1. Learn from customers, competitors and partners. If you partner with someone whom you don't like, learn to like them – praise them and benefit from them... More

The Seven Dimensions of Strategic Innovation

The Strategic Innovation framework weaves together seven dimensions to produce a range of outcomes that drive growth.

Core Technologies and Competencies is the set of internal capabilities, organizational competencies and assets that could potentially be leveraged to deliver value to customers, including technologies, intellectual property, brand equity and strategic relationships... More

Customer Partnership

"Customer partnership is a shared journey to create a future for both parties that is better than either could have developed alone."3 The customer is the foundation of your organization's success. In today's turbulent times of rapid and chaotic change, "no force is more grounding and stabilizing than a partnership with customers."3

 

Creating a partnership with customers will help your organizations maintain the focus you need to make good decisions and harness the power and commitment you need to weather volatile times.

Customer partnership is more than "putting customers first", or  finding mutually satisfactory solutions to shared problems, or  a dedication to excellence in every sale or service encounter. It also requires commitment to forging long-term relationships that create synergies of knowledge, security, and adaptability for both parties... More

New Employer-Employee Partnership

Today, people are your firm's most precious and underutilized resource. They are your firm's repository of knowledge and they are central to your company's competitive advantage. Well coached, and highly motivated people are critical to the development and execution of strategies, especially in today's faster-paced, more perplexing world, where top management alone can no longer assure your firm's competitiveness. A successful people partnership is a coherent set of people systems and processes that reflect the business environment, the enterprise strategy, and organizational values. Each one will be unique to an organization and its employees, but there are some key principles that are common to all the companies that are exploring the New People Partnerships... More

 Case in Point  

Cross-Sector Partnership Postgraduate Certificate

The Cross-Sector Partnership Postgraduate Certificate was established in 2001 by the Cambridge Programme for Industry, at the University of Cambridge. Its mission is to provide intellectual challenge and practical training for people who are leading their organizations in the development of cross-sector partnership. The participants of this nine-month, part-time course are experienced partnership practitioners selected from international agencies, companies, Governments and civil society organizations and from a wide range of cultures, experiences and traditions, in order to ensure diverse and challenging interaction and learning. (www.cpi.cam.ac.uk)

 

 Discover much more in the FULL VERSION of e-Coach

Three Key Questions to Answer...

Extended Enterprise: Virtual Integration...

Building Trust Between Organizations...

Eight Conditions for Trust Between Organizations...

Lessons from Successful Partnerships...

Mutual Creativity...

 Case in Point  Joint Development by British Petroleum and Schlumberger

 Case in Point  Partnering for Auxiliary Capabilities in Silicon Valley

 Case in Point  Cross-Sector Partnership Postgraduate Certificate...

 Case in Point  Progroup's Various Sources of Knowledge...

 Case in Point  Joint Engineering Design by Ford and ABB...

 

 

 

Bibliography:

  1. "Extreme Management", Mark Stevens, 2001

  2. "Relentless Growth", Christopher Meyer, 1998

  3. "The 80/20 Principle", Richard Koch, 1998

  4. "Cooperation Between the United Nations Systems and the Private Sector", United Nations, 2002

  5. "Business as Partners in Development", report by the Prince of Wales, 2002

  6. "Strategic Management: Competitiveness and Globalization", Thomson Learning, 2001

  7. "Managing Complexity", Robin Wood, 2001

  8. "A Balanced Approach to Offshore Outsourcing", Keane Inc., 2004

  9. "Smart Corporate Leader," Vadim Kotelnikov

  10. "Smart Business Architect," Vadim Kotelnikov

  11. "Corporate Strategies," Vadim Kotelnikov

  12. "Competitive Strategies," Vadim Kotelnikov

  13. "Strategies of Market Leaders," Vadim Kotelnikov

 

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Inventor, Author & Founder – Vadim Kotelnikov

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