The Problem With B2B Partner Ecosystems Volume 3: Understanding Why the "Partner Paradox" Exists

Note: This is the third in a series of weekly (ish) essays exploring the challenges and nuances of B2B partner ecosystems. Each article will delve into specific issues across four main topic areas: believability, structure, scalability, and predictability. By the end, I hope to have provided readers with a comprehensive understanding of the challenges and potential solutions to enhance the value and effectiveness of partner ecosystem strategies. Click here for Volume 1 and Volume 2 .

In my previous article, we explored the complex dynamics of ecosystems and their challenges. This week, we’re unraveling a crucial structural element in most partner ecosystem organizations, a puzzle that has long evaded a clear solution.

The result of the structural breakdown is what Bob Moore, CEO of Crossbeam, and his team call the “partner paradox.” I'm a firm believer that in order to truly solve a problem, you need to understand all of the causes creating the condition for that problem.

Understanding a key structural element leading to the partner paradox will help us see a major factor contributing to the perpetual and ongoing difficulty partner ecosystem teams experience in their attempts to communicate their contributions.

Let me share a story from my own experience to illustrate the paradox (many of my readers will most likely have very similar stories, if so, I'd love to hear them!).

Understanding the Partner Paradox - A Personal Experience

A few years ago, I led an ecosystem team that, on paper, was wildly successful. However, in our CEO’s eyes...let's say, 'not so much.'

At this particular company, I took over a partner ecosystem organization previously run by someone who had created significant animosity by tagging into almost every deal in the pipeline, claiming credit for marginally influenced deals, and producing questionable results.

Since proving value and making believers out of skeptics is practically part of an ecosystem leader's job description, so now equipped with this information, I set out to create a multi-pronged strategy to break down barriers erected by others because of my predecessor's behavior, and I seemingly, I had the buy-in of our CEO, CRO, and other leaders to make the necessary changes.

Throughout that first year, I began eroding organizational mistrust by sharing detailed activities and results, achieving targeted results, and enabling me to hire a small team.

After a year of building, we were primed for results, and those results, at least in many of our minds, were astounding.

Over the course of my second year, our team achieved:

• Partner-referred deals closed at a 61% rate.
• Partners were meaningfully involved in 100% of our enterprise opportunities and 65% of our commercial deals.
• The company closed its three largest deals in history, all a direct result of a GSI relationship.
• On over 120 deals, we demonstrated a 40% positive ARR delta between influenced and non-influenced deals in our commercial segment.
• Partner-referred, net new revenue opportunities accounted for over 20% of the pipeline that year.

Beyond the numbers, we did something incredible with our Salesforce strategy. We convinced our leadership to embrace our very arm's length Salesforce partnership and lean into the relationship. In making this shift, along with a lot of work from my team, we moved from being in danger of dropping into their third tier of partners to one of only 15 Tier 1, or “Summit Tier,” partners.

This rarefied air allowed us access to some incredible resources and put us on a pedestal ahead of Salesforce’s over 3,500 other technology partners. What I'm even more proud of is that we were, by several times, the smallest company and least resourced partner team in that cohort.

Then, There was the CEO's Perspective

On paper, we were crushing it. In our CEO’s mind, not so much.

In his mind, partnerships had one purpose: net new logo lead generation. Everything else was seen as superfluous.

Not long after achieving these results, he disbanded the entire partner organization. When our confused former colleagues asked why something seen as so successful was being eliminated, his response was pointed: “Partner people lie, and those results weren’t real.”

The Heart of the Partner Paradox

So, what happened? How could my team and I feel like we were crushing it while the CEO saw only lies and failure? This is at the heart of the partner paradox, where partner ecosystem leaders must justify their non-linear value contributions across all GTM functions and partnerships, often through another party, usually the CRO.

No Executive Advocate + Zero Sum Game

In trying to figure out a solution to the Partner Paradox, I’ve spoken with dozens of CEOs who shared similar thoughts about their partner ecosystem teams. One common theme: none had a representative from their ecosystem organization at the executive table.

One CEO candidly discussed why they struggled to derive value from their ecosystem team, leading to the leader being let go and the ecosystem deprioritized. It wasn’t because they failed, but because their contributions spanned product, marketing, customer, and sales orgs without a way to measure them effectively. The metric held against them, sourced net new revenue, was lacking.

This lack of executive representation meant the ecosystem leader needed to either report to multiple GTM leaders or have a seat at the executive table. Four bosses with different KPIs, agendas, and strategies wasn’t realistic. The CEO explained that his other GTM leaders would divide credit for pipeline and opportunity creation, then lay out strategies and budgets.

The Conundrum of Representation

Each GTM leader, responsible for linear KPIs, divided credit and budget amongst themselves, tying their teams to successes aligned with those linear metrics. This is where ecosystem teams break down. Despite rolling up to the CRO, they contribute to all four GTM functions, driving net new leads and revenue, building partnerships, coordinating with customer teams, identifying marketing opportunities, and justifying their existence across these dimensions.

In an executive meeting, the CRO, under pressure to hit the company revenue target, must accurately represent the complex web of partner contributions alongside detailed numbers. Expecting them to juggle all this effectively is ludicrous.

The Table Can Only be So Big

When asked why the CEO didn’t allow the ecosystem leader at the table, he explained they hadn’t earned a place yet. Allowing one leader would mean allowing others, risking a ‘too many cooks in the kitchen’ scenario.

Here lies the conundrum: the ecosystem leader couldn’t quantify their non-linear contributions to prove they deserved a seat, while the CEO couldn’t justify giving them a seat without proven value. The CEO acknowledged this contradiction but seemed at a loss for a solution.

Reflecting on my experience, I faced the same problem despite great numbers. Filtering ecosystem contributions through a CRO who didn’t understand partner ecosystems was challenging. I pushed to have my team moved under our CEO to involve him directly, but it didn’t happen, and the rest is history.

Proving Ecosystem Value

This cycle of partner teams justifying value through executives with different priorities and KPIs focused on immediate results leads to ecosystem strategies failing to meet executive expectations.

Ninety percent of CEOs surveyed say their ecosystem strategies “do not contribute significant value” (a statistic you'll see repeated throughout this series).

Partner teams can explain how they're adding value, but without a way to quantify their non-linear success that can be effectively represented to CEOs and board members by non-ecosystem executive leaders, we struggle to prove it.

We need a way to measure non-linear value to demonstrably prove our contributions, and even though it's a daunting task, it can be done, but we'll get to that later...

TL;DR

• Partner ecosystems often face a paradox where their success metrics are not fully understood or valued by executives.
• A lack of executive representation and the complex nature of ecosystem contributions exacerbate this issue.
• Personal story highlights the struggle of demonstrating ecosystem value despite significant achievements.
• The Partner Paradox involves justifying non-linear contributions through linear metrics, often through another executive.
• Solving this requires developing a method to measure and demonstrate non-linear value effectively.