The success of many companies often depends on the success of their relationships. At Partner2GROW we strongly believe that WE DO BETTER TOGETHER. Effective relationships and partnerships allow businesses to benefit from working together in many ways such as:
- Sharing assets to go further faster
- Accessing new markets and technologies for growth
- Enhancing brand reputation and exposure
- Adding value to your products and services
- Often with NO monetary investment or increase in your workload.
Strategic Partnerships are the fastest most cost effective way to shorten your sales cycle and catapult conversions to grow your business.
To reap all the rewards that come with strategic partnerships, it’s important to build a strong reputation for creating win-win outcomes. Without this, you’ll have a harder time finding the right partners, getting your foot in the door and you’re more likely to end up with more work, not enough sales, low growth and giving away the farm for nothing (while your competitors snap up the best partners!).
So, let’s look at how you can attract good strategic partners and avoid the bad ones to get real results.
1. Open For Partnership – Sing It From The Rooftops!
When it’s obvious your organisation is partner friendly, you’ll have a better chance of attracting good quality partners. Think of it like making friends — those with a happier, sunnier disposition tend to attract more people than those who are all negative and gloomy, or those who have a reputation for being a bad influence.
Positive reputations attract positive outcomes — this is especially true when searching for strategic partners. The more potential partners are attracted to your business, the greater your chance of finding “the one” and forming a special partnership which will elevate both businesses to the next level.
With more businesses taking an interest in partnering with you, the more opportunities there will be for you to choose from, so you can select the ones that will really make a difference.
TIP: How can you make it obvious your organisation is partner friendly and make it easy for potential partners to reach out to you? Some of the ways you can do this include having a great partner page on your website, showcasing partnership case studies and success stories through your social media channels, and promoting partnership opportunities to your networks.
2. Cultivate A Partner Friendly Culture From The Top Down
This is where its important to invest in ensuring your organisation has internal partnership capability and a solid partnership strategy. This is not a hard thing to do when you know how and having a great partnership set up also tends to bring a host of added internal benefits to a business. A Partner-friendly culture can:
- Reduce workload through increased leverage of existing resources
- Grow resources reducing the need for extra staff
- Minimise your reliance on expensive and often ineffective pay and pray marketing
- Increase conversion rates and shorten your sales cycle
- Improve loyalty, and tenure with staff, customers and suppliers
Tip: When your company is focused on win-win outcomes for all parties, your reputation will also help you leverage value out of all your relationships and gain more loyalty in the process.
3. Leave The Competition Behind
Through your previous and current partnerships, you’re basically telling others, even unintentionally, that you’re the one they should partner with if they want a partner who wants the best for all parties involved. Satisfied past and current partners can also spread the word. The consistent message that your business is a great strategic partner becomes more authentic and sincere. If you’re proactively building successful strategic partnerships, you will effectively lock out your competitors as you snap up the best partnership opportunities first leaving them wondering why opportunity doesn’t knock on their door. Often it does, it’s just the difference between arriving at a home with a warm welcoming open door policy, versus a nervous and paranoid voice on the other side of a heavily locked door saying ‘who is it? Go away, we don’t want any!’
Tip: By showcasing your partner successes, and being proactive in seeking out partners, you will be “top-of-mind” when other businesses are seeking potential partners. You will be the partner of choice, affording you more partnership opportunities compared to the competition. This is a legitimate competitive advantage for your business.
4. Don’t Fall Into The Trap
While there are many great benefits and advantages in having partnerships, there are some bad examples out there. Failure in partnerships can be caused by several reasons, including lack of communication or the inability to be flexible enough to accommodate your partner’s needs, as we explored in a previous blog, etc.
If you’ve got a reputation for messy partnerships then it’s going to be known and it WILL harm your business. And it’s not just your business relationships with your partners or vendors; internal company issues, like high turnover, can sink your reputation and your company as well.
Take this example: Business A had an existing relationship with a major financial institution (Business B). About to open a new venue targeting top executives, Business B had a large database of this ideal customer and was very open to sharing it with Business A. We invited the key stakeholders to the venue at lunch time to experience Business A’s hospitality. Instead, Business B was interrogated about their fees and was not even offered a drink. Relationship over before it even began. The arrogance, short sightedness and complacency of Business A destroyed an incredible opportunity in its pursuit of saving a few bucks. Business A failed to invest in creating a partner friendly culture and while they may have had some market advantage to begin with, their reputation is spreading like wildfire and locking them out of key opportunities. Coupled with high turnover, questionable ethics, and failure to pay suppliers, is this the kind of company you’d want to be associated with?
Another one of our clients had an outsourced HR solution and wanted to partner with their supplier for a program to reach thousands of small businesses. The incumbent supplier had a presence throughout Australia but offered inflexible solutions which did not cater to the needs of the other party. They have high turnover and sent their most junior staff to the meeting before properly understanding the client’s needs. Even though they had a national presence, they were making it hard for our client to build a more fruitful relationship with them.
Quickly identifying this company as not being partner friendly, we did a quick search for their biggest competitor. This other company, was clearly partner-friendly and made it very easy to explore opportunities with our client. Their senior partnership and business development executives were receptive to the opportunities. The result? They are now in the process of not only partnering with but winning the business of our client. For the incumbent supplier, this is a case of the “one that got away,” no thanks to their inflexible solutions and high turnover which had a negative impact on their partnership reputation.
This is a very good example of how having a partnership-friendly reputation and going the extra mile when it comes to accommodating potential partners can land you a solid partnership, even if you’re up against a bigger rival with more resources. If you have built this kind of reputation and continue to nurture it, size won’t matter as much anymore, letting you level the playing field or even stay ahead of the competition when it comes to becoming the partner of choice. We’ve seen many a business overtake their competition through great partnerships.
Tip: No matter if your Business is big or small, openly communicate and work with your Partners. And remember being successful in one partnership can lead to more opportunities either with that same partner or with other businesses.
If you want to grow your reputation as a great partner and be more likely to attract other partners and more opportunities in the future, you need to get this right from the beginning. If you’re not sure how, we can help you with the framework, tools and expertise to make this easy and maximise your probability of success.
Let’s take your business to another level. Click here to find out how you can started immediately and DO BETTER TOGETHER with your partners.
High growth potential is not the same as high growth. One possible big difference here is investment. You may need money to enter a new market, reach new customers, develop new products, improve distribution or increase production.
Yes, indeed, that’s one possibility. Investment can be risky and expensive though, and is often not the only option. Strategic partnerships can offer you a way to grow without having to wait for an investment. Measuring the value of a strategic partnership can help you assess the return you can expect from your investment of management time and other valuable resources.
What can strategic partnerships offer my business?
In our recent Strategic Partnerships Expert Panel webinar, one of the many significant issues which were discussed is knowing how to measure the value of a strategic partnership.
But first, what exactly are the benefits offered to businesses by strategic partnerships? Our webinar discussion yielded four primary outcomes:
- Find money — share resources with your partner to help fund your own growth.
- Build brand — borrow your partner’s “halo effect” in your chosen market or niche.
- Monetise assets — maximise return on investment on your intellectual property (IP) and fixed assets.
- Grow audience — your partner’s audience also becomes your audience in a strategic partnership.
Strategic partnerships also require deeper engagement than more limited marketing partnerships.
Marketing partnerships are great for referrals, quick wins, collaborative campaigns or competitions, and content-sharing. Strategic partnerships are, however, less onerous and more flexible than joint ventures, which typically require a new legal entity. A strategic partnership can include an agreement to share resources, staff, market access and intellectual property.
Measuring the value of a strategic partnership
As covered in the webinar, the value of a strategic partnership can be measured using two key metrics; financial and strategic. Financial value is tangible and can include revenue, leads generated and increases in customer value, increased transaction value or frequency, and cost savings or promotional value. <7p>
This kind of value is what you can see and determine at face value, especially if the agreement involves freely sharing financial statements relevant to the partnership. This is also the kind of value that easily attracts partners. Since the “calling card” is ofa monetary nature, potential partners can more easily assess how they will be able to effectively grow their resources financially through the partnership.
Strategic value is less tangible and might include concepts such as brand leverage, competitive advantage, future value, and access to key assets. The business case for a prospective strategic partnership should also take into account financial and strategic risk factors. These factors can include the opportunity cost of any financial commitment and potential reputational damage from partner issues.
This kind of value, while not easily determined, can possibly have a much greater impact to a business compared to the financial value of a strategic partnership. This is because things such as gaining a competitive advantage, greater market share, and value forecasting already takes into consideration the potential financial benefits as well as other factors such as increased brand influence and awareness, marketability, and access to new markets – factors which are all important for taking a business to the next level. This kind of value also takes into consideration the possible non-financial risks involved. Since we’re talking with working strategically with another business, what they do and the issues they may face can affect your own brand reputation as well.
Finding the right strategic partner and identifying risks
Choosing the right partner is not as simple as measuring money and market share, however. In the webinar, Partner2Grow’s Managing Director, Simone Novello, remarked, “It’s not the biggest database that gets you the best results. It’s the most aligned database.” The expert panel had an extended discussion of the particular challenges of asymmetrical partnerships. When SMEs partner with large, multi-national corporations, it’s critical to read the room regarding communications to ensure that IP is adequately protected.
A lack of reciprocity in information-sharing, deferring to absent authority, and failure to respond in writing on key matters are all alarm bells for SMEs. A ‘win-win’ scenario where both partners are likely to benefit will ensure that both parties are equally committed. Partnerships between companies with different cultures or risk appetites are unlikely to succeed. Geoffrey Roberson, a commercial law expert and Principal at Stacks Champion, highlighted the need for a sound business case, both to underpin any legal agreement and ensure the eventual success of any strategic partnership. “Business planning needs to be understood; the objectives of each and what both parties want to achieve. That’s where negotiating up front before you document it is absolutely critical,” he says.
A truly valuable strategic partnership success story
Strategic partnership success stories are not hard to find. The dashboard indicators are all green for growth at Burra Foods Australia, for example.
In 2009, this South Gippsland dairy processor entered into a strategic partnership with a long-term client, Itochu Australia, aiming to expand production to export in Asia. The resulting site investments doubled total production to 39,000 tonnes in 2011 and won $2.1 million worth of Victorian Government support for an electricity upgrade.
Strategic partnerships are good for business, but governments can see the benefits, too. The number of employees at Burra Foods Australia increased from 80 to 130, and its demand for milk doubled to 150 farmers in a year. Companies which create and sustain jobs can expect to attract investment from more than just their partners.
By 2011, the new partnership had lifted exports from 70 to 85-90% of total product and doubled to $160 million. The partnership with Itochu Australia transformed Burra Foods’ export capacity and global presence in the short space of two years.
In other words, this particular partnership scored high in both metrics of strategic partnership value. The financial side of things is already a given. However, the strategic value, while possibly not that apparent at the start, proved priceless. Burra Foods, with Itochu Australia’s help, gained the nod of the Victorian Government, further magnifying the value of their strategic partnership.
Considering a strategic partnership?
As explained, a strategic partnership can bring both monetary and strategic value to businesses. However, entering one needs careful consideration and research. As such, for those looking for a strategic partnership, it’s best to be updated first regarding partnership issues, developments, and key advice. Viewing our truly insightful Strategic Partnerships Expert Panel webinar is definitely a good start—the information you’ll gain might just prove invaluable. Then, if you need real guidance and other relevant resources for you to develop partnership capability or find the right strategic partnership, Partner2Grow has the right tools that will really help you maximise the opportunity.
Entering a strategic partnership is an adventure in itself. It takes careful planning and consideration for it to succeed. When it’s a cross-cultural strategic partnership, culture clashes, language barriers, and even different ways of doing business, can make things even trickier and complicate the path to success with challenges.
You can, however, make it work – and make it work well! Here’s what you need to know when entering this kind of partnership and what you should do to make it work wonders for your business.
Key Benefits of a Cross-Cultural Strategic Partnership
There are several reasons why businesses enter a strategic partnership which involves more than one culture or nationality. These include:
A Wider Reach and Easier Access to Goods and Services
The main benefit of a cross-cultural strategic partnership is the increased ability to reach an international audience, or at least gain another market outside your country’s national boundaries. By working with, say, a Maori-owned business in New Zealand, and sharing resources with them, you may find it easier to ship to or transport your products on New Zealand soil. The benefits you enjoy from your cross-cultural strategic partnership will vary depending on the exact nature of the partnership, but many businesses will opt for sharing patents or manufacturing resources.
Better Collaboration, More Innovation
Anne-Marie Soderberg and her colleagues, writing in the Journal of International Management, drive home this point. She stresses, “cultural diversity in global teams may enrich collaboration and generate more innovative solutions” and that, can indeed, be so. Different perspectives from another culture can give rise to solutions that may be difficult to find otherwise.
To illustrate this point, let’s revisit our hypothetical partnership with a Maori-owned firm in New Zealand. Let’s say one of the strategic partners, an Australian firm, has some difficulties with keeping its workers, particularly those in entry-level positions. They want to keep these people, but despite offering substantial raises, the talented newcomers jump ship and go elsewhere.
When they met with their partner corporation’s leaders in Rotorua, New Zealand, they mentioned that they had no such problems in their company. They cited a Maori proverb, “The leader at the front and the workers behind the scenes.” The executives explained that in Maori culture, their company must value both the lower-level and C-suite employees, as, if it weren’t for them, the company would fall flat.
The Australian firm’s leaders hadn’t thought about their problem from that perspective before. When they arrived back home, they immediately began to recognize their entry-level workers for their achievements, thank them publicly, and ask them for their input. The new way of looking at an old problem—thanks to having a cross-cultural strategic partnership—could save the day for a floundering company.
Avoiding Complications of Cross-Cultural Strategic Partnerships
With the aforementioned benefits also come possible complications which include cultural misunderstandings, differences, and even lack of knowledge of the laws that govern each other’s countries. However, there are several things you can do to avoid these problems and make it easier for the partnership to flourish.
Keep an open mind
If for example, our hypothetical Australian firm had taken offense at the Maori executives’ mention of the proverb about worker equality, the strategic partnership itself might have been in danger of falling through. An open mind and open ears are therefore essential ingredients to a successful cross-cultural partnership. This helps in terms of understanding your partner’s perspective. Having an open mind also helps reduce unnecessary cultural biases which might hinder you from building an effective professional relationship in a cross-cultural partnership.
In our recent Strategic Partnership Expert Panel webinar it was noted that cross-cultural partnerships work best when you keep in mind the uniqueness of such a strategic partnership. Having an open mind helps you do this, assisting you to appreciate and manoeuvre the intricacies of the partnership to avoid cultural misunderstandings.
Bridge Differences and Build Common Goals
Soderberg stresses that, to bridge differences and build common goals, partners must develop a shared understanding through negotiation. Face-to-face meetings, she advises, are the best mechanism for that. Body language can stretch across divides too vast to bridge with mere words. Relational trust-building, she says, is the key to a successful cross-cultural strategic partnership.
Another way to help bridge differences in cross-cultural partnerships is the willingness to share. As discussed in our Strategic Partnership Expert Panel webinar, a cross-cultural partnership is a contractual agreement between two culturally different businesses. Sharing of technology, manpower, and other assets increases the confidence the partners have for each other and minimises the fear that ulterior motives are in place or that a partner is not 100% willing to co-operate because of cultural differences. This in turn boosts collaboration within the partnership.
Seek Local Guidance to Build Understanding
When Australian businesses, for example, look at a foreign partner’s business practices through their own eyes, they may be stumped and this could lead to misunderstanding. When, however, they rely on their strategic partner’s team for cultural guidance, they can learn why these practices are effective in their local context. They may even, as in our illustration, provide a new way of seeing business practices which could also turn out to be useful as well on the Australian side of the partnership.
Seeking guidance and communicating with your strategic partner gives you a better of idea of what to do, what to expect, and how to properly communicate and deal with your partner and their practices. This also builds respect which, as we all know, is important for all kinds of partnerships.
Know the Laws
Cross-cultural strategic partnerships will likely fail when those involved don’t research the laws in their partner’s country to avoid pitfalls. Again, local guidance can help foreign partners understand local laws and find a way to do business within those laws. If shipping is part of the partnership’s business activities, do your homework. Don’t have your goods stopped at the border because your legal team didn’t bother to check with your partner’s customs requirements!
Being clueless is never an excuse. Remember, as was stressed in our Strategic Partnership Expert Panel webinar, a cross-cultural strategic partnership can run into challenges because of the differences in terms of laws and customs. It’s prudent to research, ask questions, and be well-informed especially with the legal elements in this particular kind of partnership.
Success in Cross-Cultural Strategic Partnerships
With work and understanding, cross-cultural strategic partnerships can bring more revenue and expanded markets to those involved, creating a win-win situation for the partners. Here are a couple of examples:
Air Canada and Virgin Australia
In 2016, the two airlines created a successful strategic partnership that provided access to Canadian cities for the Australian carrier. A codesharing agreement allows Virgin Australia’s customers to book flights on Air Canada planes traveling from Los Angeles to Montreal, Toronto, Calgary, and Vancouver. Meanwhile, Air Canada customers will be able to book flights on a single ticket to more Australian cities thanks to the partnership. This makes things easier for the passengers which could potentially lead to higher satisfaction ratings for both airlines.
Plaut Australia and MSG Global Solutions
In 2015, SAP services provider Plaut Australia formed a strategic partnership with MSG Global Solutions, an integrated technology provider for the financial services industry with offices in several countries around the world. The partnership allowed MSG to expand its consulting services and insurance technology into Australia, while Plaut Australia expanded into international markets that MSG Global serves. Both companies leveraged each other’s expertise to expand into different markets, enhance their services, and modernise their operations.
Like these companies, yours can also benefit from a cross-cultural strategic partnership. If you’d like more key insights on cross-cultural strategic partnerships or on partnerships in general, we encourage you to view the full recording of our Partnership Expert Panel webinar – you won’t be disappointed!
If you’re looking to build or strengthen your partnership capability or want expert advice and guidance on forming strategic partnerships, Partner2Grow has the right tools and resources to help you build the right alliances that will take your business to the next level.