Visiting Fellow to Northampton Business School
In my view the oldest forms of partnership structure, built on trust and the open exchange of information, are the most suitable for our modern business environment.
Over the last few decades companies have increasingly played
lip service to the concept of genuine partnership and generally use one of
three models:
Transactional partnerships involve a clear position of power for
one party based on a contractual relationship between the two parties involving
goods or services. A closed approach to information sharing and the implicit
(and sometimes explicit) desire to create a deal that is unfavourable to one
party. An example of this type of partnership would be between Samsung and
Apple, with Samsung providing components to Apple for its products. Neither side sees the other as equal, and their
have been complex legal battles between the two parties.
Strategic partnerships often involve cross-ownership to support the
creation of a new business enterprise or delivery of a service. Both sides are
committed as a result of the ownership and (in the best) both sides bring
particular skills and capabilities. The
relationship between Virgin and T-Mobile in the UK to create Virgin Mobile was
a classic application of a strategic partnership.
Open partnerships are often for particular projects or to launch
new products; companies seek out relationship that involves companies working
together in a looser arrangement. Often there is no cross-ownership but there
may be shared rewards in a positive outcome. An example of this would be
Samsung and Phones4u working together in the UK to launch an innovative retail
concept, the Samsung PIN store. Both sides shared a common vision and worked
together for its achievement, but they did not engage directly in a long term
or strategic partnership.
Unfortunately all these structures struggle in the new reality of a business world enabled by social technology. In my view this new reality is characterised by three principle components all of which directly impact on the partnership structures companies need to apply:
Business model disruption is the new reality with customers directly
accessing suppliers; the digitisation of
all information and the emergence of new generic platforms such as Facebook,
allow new routes to trading relationships. These can directly impact on the
need for strategic partnerships.
Access to everyone – traditional connections are breaking down and
it is easy for companies to make connections with multiple potential partners
and transfer and share information immediately and at no cost.
Everyone knows everything – The bass of traditional partnerships is
the sharing of information and the focus of that sharing on achieving a particular
outcome. Sharing information is now easy and commonplace. Not only can any one
reach anyone but they can share information easily – for example: CAD/CAM data
between designers and machines (across continents) or integrating launch teams
across continents.
All of these elements place significant strain on the
current partnership models being used across business.
In my view businesses need to embrace a form of partnership
that has not only been in existence for centuries, but also provides the
essential tools to allow a business to survive and prosper in today’s
environment.
The mutual partnership
is founded on an open, honest and trusting relationship. The desire is to build
a much more effective approach to the market than either business could achieve
alone. Both parties accept and acknowledge their strengths and limitations and
both parties work together to achieve success. The conversations between the
parties do not start with contract discussions but with shared aspirations and
mutual respect.
How do you establish a mutual partnership?
There are six principal steps:
- Understand your own strengths and weaknesses
- Identify a small number of key partners that could help you and that you could help (Think about customers – these are crucial partners)
- Meet with these partners and work on developing a shared vision
- Start small and quickly – identify something that can be done collaboratively and that will breed a positive commitment - and do it quickly
- Constantly and mutually monitor the relationship. Don’t look for formal measures but constantly check – is this working for us? Is this working for them?
- If it feels wrong – kill the project
Mark this touches on so many current themes in the evolution of management as we strive for a new 'paradigm' following the near collapse of the western Anglo-Saxon dominated capitalist system. Issues around collaboration, trust, long term vision are being grappled with as a move away from short term profit maximisation and quite frankly an excess of greed in some areas greed are being challenged on so many fronts.
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