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In 2013, American businessman Bill McComb in his LinkedIn article “Partner or Die” defined the concept of partnerships in a very simple and easy to understand way:
Partnering is the ability to share control of some aspect of the value chain with another organization to deliver your company’s brand, product, or service to customers. Partners can appear in all forms in business. Licenses, joint ventures, distributors, contract manufacturing, fulfillment houses, software developers, customer service centers, marketing agencies, and revenue affiliates – the list of potential partners has grown dramatically in the past two decades. And that’s the whole point.
In the same article, the author cites examples of well-known companies in the market, such as GE, Spotify, iTunes, and others. All to reinforce that: “Partnering is the fastest, most-effective, lowest-risk way to solve for nimbleness and growth.”
Undoubtedly, acting strategically in favor of these partnerships is essential to maintain a business’ sustainability, and to combine the objectives of the company and the partner with the intentions of the Business Development area can generate even more expressive results.
But, after all, what is Business Development?
The term can be defined as internal initiatives that aim to better position the business before stakeholders, whether through customer acquisition, negotiations, increased revenues, expansion to other markets, networking, prospecting, and closing strategic partnerships, among other actions. They can be directly connected to other organization sectors, such as sales, marketing, and product management.
How are these two themes related?
In 2017, a survey conducted by PwC, with CEOs from different parts of the world, revealed that 72% of respondents saw partnerships as an essential action for their business. In contrast, other data presented in the report (extracted from Harvard Business Review) shows that of the collaborations between companies, about 60-70% do not work. It is inferred that this may be occurring because many of these companies do not initially align their value propositions and because, in some cases, they have different cultures and profiles. So, they end up not adapting and are open to giving in to the partner’s needs.
In terms of Business Development, partnerships can be initially articulated to benefit the organization’s internal resources, such as partner software. As far as the external scenario is concerned, we can also use them to acquire customers, develop new products, offer services, among others. An example of this second case may be that of Facebook with Spotify through the integration of platforms for user login and music sharing.
The benefits of partnerships
In addition to the possibilities mentioned above, there are four other benefits of developing strategic partnerships. The first one is the access that the company may have to new markets, such as internationalization. Alone, a company may not have had the strength to enter the market, but through a partner, already positioned, this becomes more feasible.
Two other benefits are productivity gains and access to technology. As mentioned above, the example of a company that provides its software in partnership format for another organization to use and improve its internal processes.
Last but not least, the gain in financial capital and human resources. Improve the overall finances by generating revenue from new sources. On the other hand, human resources facilitate access to the expertise of authorities in specific matters that interest the other party.
For this, a strategic business alliance must have:
- trust and commitment between those involved.
- collaboration, as it is not enough for only one party to make an effort and without any doubts.
- communication, which must be careful and personalized from the first moment.
How to get started with a partnership?
Like any good idea, start with a brainstorm – get the team together to define what the company really needs and who are the potential partners so that you have an initial structure of what you want and what you can offer in return.
Define a leader to guide the partnership – preferably someone from the Business Development area, as they already have more specific knowledge about the organization’s business strategies and negotiation skills.
Find partners who share your values - every organization has a different culture and values. For many of them, it guides its objectives and goals. Having a partner who shares similar values can facilitate the development of actions together.
List the benefits for the parties well – through clear and transparent communication, launch the partnership with all the crucial details, such as the proposed schedule, the costs involved, the responsible heads, etc.
Maintaining the balance – it is no use just one of those involved working. Responsibilities need to be defined, and resources and earnings subsequently shared.
Have professionalism – remember that the partnership is not directly with you but with the company and its customers, so it is essential to align the parties’ expectations and avoid future disagreements and losses to the organization.
Be transparent with what the company can actually offer – whether in terms of financial investments or human capital through technical skills.
How are traditional companies strategically merging with startups?
In addition to the exchange of knowledge about technological innovations, traditional and already consolidated companies in the market are increasingly seeking to learn from the youngest startups that have a more agile management model and are more open to changes than the market requires. You can learn more about these practices here.
There is also an exchange/partnership model that works through the services and products offered, such as Walmart and Cuponomia, which hugely increased its sales after generating discount coupons for its customers through its partner’s platform.
Another example of success is that of 99jobs, which offers a marketplace to connect companies and people looking for fixed vacancies or temporary jobs. The company is currently a partner of brands to Heineken, ESPN, and Microsoft.
Not a “seven-headed bug”
As you can see, making partnerships is not a seven-headed bug. Study the needs of the company, map potential helpers, and negotiate.
Then, check out the blog posts cited in the text and share it with your co-workers 😉