In the poem “Mending Wall” by Robert Frost he writes, “Good fences make good neighbors.” While this may be true when it comes to neighbors, in the case of partnerships, good fences make bad alliances. Strong partnerships are devoid of walls or barriers to success.
When I reflect upon the successful partnerships I have built or been a part of, I realize that each of them possessed several common ingredients that created a winning recipe. A mutual eagerness and laser focus were indigenous to these relationships.
Let’s review seven key characteristics of productive partnerships.
#1. Hunger. The single most important ingredient to a successful partnership is hunger. Both parties must be hungry, or highly motivated, by a driving force. The force may be the need to increase revenue and grow the company to the next level, thus satisfying a directive from the board of directors or executive team. The force may be a particular pain point or missing link that can only be resolved through a strategic technology partnership. Or it may be the opportunity to launch into a new market or geography.
#2. Complementary products and services. Organizations looking to partner should provide complementary products and/or services that are strategic to each other’s businesses. As an example, a software company partners with an IT consulting firm that provides services surrounding the software solution. Conversely, an IT consulting firm may seek a software partner whose solution enhances the firm’s specializations and capabilities.
To further illustrate this point, Bill Kantor, angel investor, sales consultant and partner at Delta Capital Partners states, “When looking for alliances, you seek companies with complementary products and distribution. Often these companies turn out to be competitors more than allies. The ideal relationship is one in which the ally sees your product as complementary to or enabling an important part of their business; but not something that they have to own or control.”
#3. Joint Offering. As a follow-on to #2, partners with complementary products and services should consider designing a joint offering, that is consistent with their core business, to market to their existing customer base and new prospects. As an example, an IT consulting firm builds practices within various technology domains. If they develop a practice surrounding an existing product that complements and enhances their service offering, they will generate more interest in the offering and ultimately more revenue. An IT outsourcer has Service Level Agreements (SLAs) to meet with their existing clients and the addition of a product may facilitate or expedite meeting these SLAs. IT consulting firms and outsourcers can proactively reach out to existing clients and new prospects to sell the joint offering.
#4. Bi-directional. A partnership should be mutually beneficial and bi-directional from both a technology and financial standpoint. Most companies are searching for partners who will bring them revenue, however true partners understand that a strong alliance involves giving as much as receiving. If a partnership is one-way, where one party receives the lion’s share of the benefits, then the alliance will fizzle. There has to be something in it for both parties in order for the partnership to succeed and progress.
#5. Resources. Companies must have available resources to build and maintain partnerships. A technology partnership requires available R&D or technical staff to build or integrate a joint solution. A revenue-generating partnership requires sales and marketing staff to grow the partnership as well as Alliance or Partner Managers responsible for maintaining a productive relationship. Partners should have salespeople available to train and then sell the solutions as well as marketing personnel to lead joint marketing activities.
#6. Budget. Partners need budget to pay for the staff that is managing and maintaining the partnership, and funds available for joint marketing activities such as webinars, seminars, email campaigns and industry events.
To elaborate on this point, Bill Kantor continues, “Alliances are often easy to start and difficult to make work. It costs nothing to say ‘let's buddy up’ but it requires investment on both sides to generate revenue.”
#7. Simpatico. Organizations that are like-minded and congenial with each other will have a much greater opportunity for a successful partnership. A willingness and desire to cooperate and work together as a team towards a common goal are critical elements of a productive alliance.
In summary, these seven qualities are pervasive in successful partnerships. Both parties must be highly motivated to build something together to go-to-market and achieve great results.