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Building Strategic Partnerships |
by Vadim Kotelnikov & Ten3 East-West
"Partnerships between people, between companies, with customers and with suppliers create greater value for all concerned" - Stanley C. Gault
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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. Growing Role of Partnership in the New Economy Barriers between companies, which used to be solid and absolute, are now permeable. "Iconoclasm and creativity are now the keys to success", writes Mark Stevens1. "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 Building Trust Between Organizations Trust - both between individuals and organizations - is at the core of today's complex and rapidly changing knowledge economy. With trust as a foundation, the companies - or teams within a company - can share their know-how to achieve synergy - results that exceed the sum or the parts. "Unlike formal contracts or rigid hierarchies, trust frees partners to respond together to the unexpected, which is essential for mutual creativity. Trust also fosters enthusiasm, ensuring the best performance from everyone."5...More 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 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 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 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) Case in Point: Joint Development of a New Tool by British Petroleum and Schlumberger "We must view relationships as a coming together that allows us to do something no other two parties can do, and that is make the pie bigger, to our mutual advantage", writes John Browne, CEO of British Petroleum, in the corporate action plan for competitive learning. British Petroleum wished to measure the effectiveness of their horizontal well drilling processes, but there was no available device to do so. BP pooled their intellectual and financial resources with Schlumberger, the oil field services company, to build such a tool. BP shared their rudimentary ideas on how to do this, and how development of such a tool would create a wonderful business opportunity for Schlumberger. It was agreed that Schlumberger would make the tool available to BP before offering it to everyone in the world. "The result was that we got a tool that has taught us a lot about making horizontal wells even more effective, and Schlumberger got a new business", says John Browne. Case in Point: Partnering for Auxiliary Capabilities in Silicon Valley With a tight link to corporate strategy, "Valley technical and human resource leaders constantly scan the environment for auxiliary capabilities within the supplier and university communities, initiating alliances so that everything is lined up when help is required". Besides, Valley leaders partner with universities and research centers to define work methodologies that both deepen and speed up knowledge creation...More |
Bibliography:
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"Extreme Management", Mark Stevens, 2001
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"Relentless Growth", Christopher Meyer, 1998
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"The 80/20 Principle", Richard Koch, 1998
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"Building Partnerships: Cooperation Between the United Nations Systems and the Private Sector", United Nations, 2002
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"Business as Partners in Development", report by the Prince of Wales International Business Leaders Forum (PWIBLF), 2002
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"Strategic Management: Competitiveness and Globalization", Edition 4, Thomson Learning, 2001
