In a competitive business environment where consolidation is taking place at a rapid pace, partnerships and joint ventures are often an important strategy in fighting back potential future acquisition. Partnerships are not always easy and they do not always work out. That’s why it’s important to set clear objectives and expectations up front. But when they are successful, both companies can reap the financial benefits.
Yesterday, Promotional Consultant Today shared a few pitfalls to avoid when it comes to building strategic partnerships. Today, we’ll share best practices for success from business author Peter DeHann.
Be honest and forthright about your expectations and contributions. This is not a time to hold back. Be clear about what you expect and what you will do. Insist on the same attitude from the other person. Holding back key information will not give you a stronger position later but rather will make success less likely.
Pursue a mutually beneficial relationship. If you can’t agree to seek a “win-win” situation, there is really no point in continuing with discussions. Mutual benefit and satisfaction are required if the result is to be realized and sustained.
Set goals. Once it is determined that there is mutual benefit in moving forward, goals or expectations must be established. As previously mentioned, these considerations must be measurable and agreeable.
Do your part. Whatever you agreed to do, be sure that you follow up on it—or ensure that someone else is. Often the negotiation for joint ventures is not conducted by those tasked with implementing them. Therefore, if you are delegating responsibilities that you agreed to, make sure they are clearly communicated and diligently pursued. If your team doesn’t buy into the project and is not committed to make it work, the contribution that you committed to will not be rendered, and the partnership will fail.
Discuss how and when the arrangement will end. Assume from the very start that the venture will someday end. Discuss what that point is and how to determine it, (which shouldn’t be hard if you were successful with the goal-setting recommendation). Agree on the responsibilities of each company in dealing with resultant assets or remaining inventories in which one party may have a heavy investment. Determine how things can wind down in a controlled, ethical and responsible manner so that any stakeholders experience minimal damage.
Aside from producing profitably sustainable results, some joint ventures have been more successful than either founding company alone; other ventures have been spun off to become their own self-sustaining entity. By avoiding the preceding pitfalls and pursuing the above recommendations, you’ll set up your strategic partnership for success.
Source: Peter DeHaan is a commercial freelance writer who provides content marketing services and is also a ghostwriter.
