Building Partnerships Outside and In

Partnerships, either between companies or within them, can powerfully drive the growth of a business. Two parties agree to work together for a mutual benefit -- what's in it for me, what's in it for you? So you might expect that the exchange has to be equal.

In reality, there is always at least one other party to any partnership -- and ideally more. Even though they're not in the room when it's negotiated, it's actually their benefit that determines whether the partnership will work.

The Role of Partnerships

There are many reasons to pursue business partnerships, but few right ones.

For technology enterprises especially, partnerships between companies are correctly seen as a core strategy for market relevance. In industries where network effects drive growth, being part of an interdependent ecosystem is essential. The more people there are that need you, the thinking goes, the more deeply you will be needed.

But without a mindful strategy, this exercise can quickly devolve into an empty program of collecting logos.

Don't just count your partnerships. Weigh their benefits.

Yes, we seek partnerships to build our own success. But the benefits that truly matter in this calculus aren't the ones you and your partners receive.

Collaborations that contribute to your customer's success, by solving their pain point, are the ones that will prosper and endure.

Finding Partners

One can -- and must -- actively seek partnerships, but they're often borne of a small opportunity that grows into a larger one.  

When looking for a partner, ask yourself, “Who can solve this aspect of a customer problem more efficiently than we can?” A partner who offers comparative advantage to a solution is an ideal fit. Similarly, offer yourself to a prospective partner where you can do the same.

Some of the best partnerships grow naturally out of vendor relationships. When two companies are both vendors to the same customer, they already have a common interest in the customer’s success. Since you’re each offering complementary services, transitioning that alliance at the right time can prove powerful.

With the focus on solving the customer’s problem, you’ll need a partner who also recognizes and understands it as you do. That can mean companies that compete with you in some way. Don’t fear that.

A strong partnership can be built with a company that has made, or can be persuaded to make, a strategic decision to not do what you do. A potential partner may find they don’t have to because you’re already doing it well.

Evaluating Opportunities

Once you have a partnership opportunity, how do you know it's a good one? The short answer is: If you can touch it.

There are a lot of good ideas in the world, but you need a partner that is able to execute on their vision. If they already have something that you can help build on, it’s more likely you can accomplish what you want to do

A reliable partner brings something tangible to the table, not just vapor. At best, that means an existing product and some proven base of customers. A solid opportunity with a modest return beats one offering an extravagant return that's built on sand.

At stake is the thing you need to protect most, your reputation. Never risk that by overcommitting to what you can deliver. Your customers would prefer to hear a solution has been available for two months, rather than one is coming in two months.

To preserve your credibility:

• Resist short-term pressures. Opportunities that are more idea than substance can look a lot more attractive when a trade show is imminent. While it might seem like a partnership announcement is a quick way to make a splash, you'll pay for that hasty choice when you inevitably deliver less than promised, or fizzle completely.
• Partner with a quality product. An existing product is an essential start, but make sure that it's robust and flexible enough to work with. Your contributions won't be able to make a poor product better, and its flaws will only be magnified by the collaboration.
• Make sure it's scalable and maintainable. A sound partnership isn't just a short-range transaction, it's an investment in each other. That means constructing partner projects that can evolve with the customer's needs, and can grow to benefit as many people as possible.

Making the Partnership Work

Like any relationship, a partnership takes work to build and maintain. You’ll succeed only so far as your partner does, so follow the practices that will best ensure their success:

• Bring them in at the right time. While you might be eager for a partner's help and resources, bringing them aboard a project too early risks frustration and disappointment. In the same way that you want your partner to have a solid, quality product to build on, be sure that you are able to provide the same thing to them.
• Don't expect your partner to save you. Just as you would demand of your partners, make sure your own contributions are of high enough quality to assure the customer's success.  Your partner can't turn your bad product into a good one, nor can they mask its weaknesses.
• Make it easy for them. You should expect to do most of the work on behalf of your partner, to help the collaboration go smoothly. Don't expect them to pick up the resource slack for your own product, let them focus on making their own contribution as robust as they can. The customer won't know or care whose fault a failure was -- it's always your reputation that's on the line.

Bringing it home

We've talked a lot about how to make partnerships between companies work. But what about partnerships within a company, between teams or departments?

The same rules apply:

• It's all about the customer. Identify how the customer benefits from what the alliance will produce, and stay focused on that.
• Protect your reputation. Seek partnerships that are built on some existing, proven work, try to bring solid material to the table in turn.
• Assure your partner's success. Do your work well and with a generous eye to what will make your partner's job easier.

The Absent Partner

Whether a partnership is between enterprises or departments, successful ones are much more than just a transaction of convenience. They’re about creating value for someone else.

Rather than a set of self-interested calculations, a winning partnership is built on the benefit the customer receives when you solve their problem.

In this way, a sound partnership is never a zero-sum game, but expands the number and range of customers for everyone.

Even though it’s the customer that makes a partnership succeed, they’re absent from the table. It’s your task, through empathy for their pain, to keep them always present in the room.