Prepping For Business Partnerships: A Bird's Eye View   by Harvey Kraft

Successful business development executives increasingly are doing battle in the arena of strategic alliances and marketing partnerships. Nowadays getting the jump on your competition is not half as important as mapping out and deploying a targeted and unique value proposition with particular appeal to potentially compatible allies.

Take the old aphorism: "The early bird catches the worm?" It just doesn't apply anymore. Even in the wild, naturists have discovered that 'early on the job' does not necessarily equate with success.

Consider this analogy:

Worms are slow, but they are expert at hiding. To catch one, birds must do more than just show up early. In the highly competitive world of birds, all the birds are up early. So, in practice, what distinguishes the successful bird from the hungry one is observation and preparation. Smart birds have figured out that worms are most vulnerable when they are in the act of eating.

The clever ones take care to study when, where, and what worms eat. The successful bird takes that data into account when making preparation! For example, one rather successful bird has learned that a certain type of worm finds a particular kind of leaf to be especially appealing. The wise bird has been observed using its beak to place the targeted worm's preferred leaves in the worm's vicinity.

The analogy of the clever bird applies not only in nature, but suggests a powerful strategic option available to you in business.

Knowing your target partner's needs and decision structure gives you the edge over all other early birds. Whether you're a CEO or a field executive with front line responsibility, you know that your prospects are capable of sophisticated camouflage. They are expert at hiding behind gatekeepers, red tape, misdirection, and layers of bureaucracy. So be it! Getting in front of potential partners takes more than showing up early. Executives responsible for cultivating business relationships must be able to increase their penetration effectiveness. They do so by providing prospects with "food" -- in this case, a compelling level of data, analysis and capabilities presented in an extraordinary manner. The results of such highly creative, custom prepared initiatives are dramatic.

Your commitment to a content-based partnership initiative is a win-win strategy:

* Partnership options, sales opportunities and receptivity improve dramatically when prospects are prepped via well-designed initiative tools front-loaded with offers of relevant information.

* Superbly orchestrated interface meetings, powerful creative presentations and mouth-watering proposals (worthy of the partnership's revenue potential) help prospective partners cut back on resistance and institutional firewalls.

* Most partnership executives are more inclined to bite into knowledge that treats them like a stakeholder. This approach improves their ability to evaluate, decide and be open to profiting from a prospective alliance.

Empowering your target with information is significantly more likely to get the deal done at the end of the day.

Increasingly, the Web is proving to be an ideal content delivery venue for initiative purposes. Content configured, digitally distributed partner initiatives are growing, but when it comes to relationship building face-to-face meetings are still essential.

Increased partnering productivity has a significant bearing on: - finding good opportunities - executive dialogue - positive brand perceptions - reducing the cost of partnership development - buy-in from gatekeepers and influencers - negotiating agreements.

It is never too early to start developing and implementing a targeted and effective Strategic Partnership Plan & Program. Feel free to contact the clever birds at Partner | M for assistance in this matter.

Goodwill Builds Partnership: A Constructive Dialogue

The value of business goodwill is in the throws of a major revival under the tent of mutual interest and partnership. Amid a global partnering boom, the future value of your business is at stake.

Go-it-alone competitive practices are for the scrapbook.

Partnering opportunities created by the communications and distribution revolution along with a global explosion in consumption and production are reshaping the ability of companies to reach larger audiences and acquire value creating resources.

A growing number of countries are announcing international business alliances. Small to large enterprises are discovering partners across the global Internet. Nearly any business conference you attend this year is sure to feature passionate evangelists espousing the virtues of strategic alliances and economic goodwill.

Shake here.

Partner or Perish

This fast-growing business climate is focused on collaboration and reciprocation. You can feel it building momentum. To survive in today's worldwide growth and innovation game your company must seek alliances based on compatible differences.

How do you get into the partnering game? Grow, shape and leverage your goodwill. Grow your goodwill by instituting best practices. Prepare your company for future alliances by using your goodwill to shape a receptive mindset within your organization. Leverage your goodwill to team up with allies and the allies of your allies.

Are you involved in a constructive dialog with one or more potential partners? If not, what's holding you back? The days of viewing your competitors with distant suspicion and enmity are over. Few enterprises can operate competitively working out of a cocoon.

Today, it's not unusual to find one division of a company signing on to an alliance with a direct competitor of another of its divisions. The first rule of this game is: "we work together, any chance we get, because working together is nearly always mutually advantageous."

Concerned about resistance from inside your organization? Some stakeholders will support your partnering aims and others will not depending on how they may be affected. Unsupportive stakeholders can kill an alliance before it comes together or slowly eat away at it over time. It no longer makes sense to let internal differences slow you down. If you're future is not in play, be warned. Sooner or later, it'll be partner or perish.

Your goodwill can make a big difference in dealing with resistance and the prevention of sabotage. It's not just a paper asset. It is meant to be actionable.

Look for silos in your organization. Appeal to those individuals using your goodwill Directly address their contribution to goodwill. Be determined to navigate such situations toward a positive outcome. Use the power of your goodwill as a change management tool to win over as many of your stakeholders as possible.

Goodwill has profound impact on your equity value

How does your business acquire goodwill? It cultivates it through best practices, such as good governance, customer service, efficiency, branding, pricing fairness, innovation, authenticity, consideration, cooperation, collaboration, thoughtfulness, decency, understanding, trust and community.

The result is reflected in the valuation of your business reputation as measured by the loyalty of your customer base and the reliability, stability and good practices of your management and its employees. The dollar amount of your goodwill represents the excess price over fair market value that you'd expect to get at a takeover of your company.

Alliance minded executives use their goodwill on a daily basis in communicating with stakeholders. Without the consistent expression of goodwill, they know, it is virtually impossible to sustain a partnering synergy that builds goodwill and benefits all stakeholders. The alternative course may in time result in stagnation and eventual decline.

Fostering goodwill among your stakeholders prepares your organization for partnering. Your commitment to goodwill drives change and builds value. Apply goodwill on a daily basis. It may be your most powerful strategy in preparing for, processing and succeeding in the formation of alliances.

Get them ready

Here are three ways goodwill can be used to increase your organization's alliance receptivity:

First, use your business goodwill as a sign of strength.

To achieve a successful transition in a merger, joint venture or other alliance types, quickly identify and address potential stakeholder resistance...and treat it with respect. Approaching others with respect is not a sign of compromise or weakness. It is a sign of strength. No matter how it may be characterized by opponents, your willingness to extend a hand of friendship can never be leveraged to your detriment, nor can it be used to silence your views. Express your goodwill to create an interpersonal zone where the exchange of common interests can be presented for the benefit of all concerned. Finding common ground on the basis of mutual respect allows partnerships to take shape.

Second, use your goodwill to diffuse resistance.

Your goodwill is the most common and effective way to diffuse negative perceptions. Reach out to those who are concerned about who will go or how their job will get done or done well: "I respect your views. We'll face it and get through it together. We have the same goals." Goodwill gives you permission to articulate the needs and goals of your alliance. Keep in mind that your business goodwill may be damaged if this step is not handled well. Avoid this step altogether and it may return to bite you later. Use your current goodwill assets to protect your future goodwill.

Third, use your goodwill to invigorate your partnering strategy.

Your next partnership will build its own goodwill. At the starting gate its goodwill is inherited from its partners. Good or bad, this asset has a limited shelf life. Your collaborative enterprise -- an innovation development strategy, sales and distribution alliance, or marketing partnership initiative -- will soon forge its own goodwill as it builds a bridge to its own identity.

On the other side of the goodwill bridge is profit, innovation, synergy, productivity, mutual understanding and constructive relationships. Walk across it every day. Look for ways to express it.

Aretha Franklin sang R-E-S-P-E-C-T in 1967 -- an anthem for respect and recognition between men and women. At the time her call was a plea. Today, it's a requirement. Individually and collectively the path of mutual respect promotes goodwill. Use it to embrace compatible differences and reduce incompatible ones.

Develop a goodwill practice for building alliances, near and far, for today and tomorrow.

Shake here.

Beware of Partnering Promises: Validate Why and Who To Engage With Before Forming Business Alliances

Before you engage in any partnering effort, be sure your expectations are valid. Do you have good reasons to partner with other businesses? You should. Do you know enough about your partner? You should. Beware of the wrong deal or the wrong partner. But don't let that scare you off. Partnering may be your company's most lucrative path for revenue growth and innovation development.

Don't be swayed by promises your partner may not be able to keep. Don't be sucked into deals offering revenue you may never see. First, you must define your own partnering goals. Second, find a compatible ally. Before you start negotiating with anyone, conduct the appropriate due diligence to be sure they are actually capable of delivering up their end of the bargain.

The First Step in A Thousand Partnerships

Whether your business generates profits directly or indirectly, markets or makes products or services, sells via the Web or a sales force, offers parts or end-to-end solutions, operates locally or globally, you cannot afford to ignore the partnering opportunities available to you right now for growing revenue, innovation and brand equity.

But before you begin to engage potential partners, think about how far you want this journey to take you. Chinese philosopher Lao-tzu is quoted as saying, "A journey of a thousand miles begins with the first step." On its surface the statement seems to say the obvious. After all, even if the journey is only two steps long, it begins with a first step. So what did he really mean? Your level of commitment and resolution to reach your destination is encapsulated in how you begin. Very little determination is required in taking two steps. But one who embarks on a thousand mile walk must summon a whole lot of tenacity and purpose into that first step.

Starting down the path of partnership is similar. Don't take it lightly. View your first partnering initiative as the first of many - the first step in a thousand partnerships. Fail to start out right and nothing of consequence can follow. Start with the right reason and a good understanding of the path before you and you're on your way to reaching your goal.

Before You Begin: Choose A Powerful Reason To Start With

Before you engage in the partnering process, be sure to have a clear plan. First, decide on the best reasons to pursue alliances.

Your first alliance should be a strong one. Have a reason powerful enough to launch your enterprise on its way to future partnerships -- able to take you as far as you can foresee.

Here are ten solid reasons for engaging in partnerships:

1. Customer Access - Two marketers exchanging access to compatible customers.
2. Sales Initiatives - Producer or marketer working in tandem with a sales force organization, retailer or Web store to increase sales.
3. Market Expansion - Partnership aimed at penetrating new or niche markets.
4. Unique Value Alliance - Marketer with strong customer base partners with innovative supplier adding unique value to the marketer's offering and increased sales for the supplier.
5. Scale Building - Partnership formed to achieve economies of scale.
6. Innovation and Specialization - Public, education or private enterprises combine financial and knowledge resources to research and develop innovative or specialty products, services or solutions.
7. Supply Chain Stability - Marketers trade exclusivity with suppliers in exchange for investment in quality, cost reduction, and priority speed to market; The supplier is able to make long-term commitments at stable levels and pass on the benefits to the marketer.
8. Distributor Partnering - An alliance between manufacturers and distributors to provide access to new markets, domestic or foreign, or strengthen a position in existing markets.
9. Parts Manufacturing Partnership - Two or more manufacturers of component parts pool their resources to produce a better product.
10. Licensing Agreements - Alliances providing license to proprietary products, support services or technology.

Before You Engage: Learn About the Road You Will Be Taking

You may be motivated to go the thousand miles until you discover it's all uphill. So before you start on your way, be sure you know what's in front of you. Six of ten alliances collapse at some point down the road, because one or more of the partners failed to do their due diligence. Before you engage a partner, learn the following:

1. Management Strength and Integrity - Who runs the company - senior officers and board of directors? Are these people dealing from strength or weakness? Do they deal with integrity or are they the kind to cut corners or look the other way? Do they have a litigation history?
2. Short-term Objectives and Long-term Goals - What is their corporate strategy? What is their partnering strategy? What will they gain by partnering with you?
3. Performance Rating - Is their organization efficient? Is it flexible? Is it focused? Do they have other partners? How well have these alliances performed? How well have they performed in the past? Regarding: quality of goods or services, speed of delivery, pricing and management response to solving problems.
4. Capabilities and Innovations - What are their capabilities: past, present and future? How committed are they to investing in capabilities that would benefit your business? How creative are they? Are they unique and innovative?
5. Financial Considerations - What is their credit standing? Are they profitable - as measured by EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)? Are they growing? At what rate - as measured by CAGR (Compound Annual Growth Rate)?
6. Resources and Employees - Do they have the resources to deliver on their end of the partnership at the scale required? Do they have the staff or outsourcing to fulfill your orders? Are there unresolved issues with labor or former employees?
7. Risks and Compatibilities - Are your trade secrets safe with them? Is their company a fit with your company in regards to markets and cultures? Are they looking for an exit strategy? How would a change in management or ownership affect your alliance? Will they be sold in the near future or right after they close the deal with your company? Is your partner planning on bringing in new investors? How can you get out of a failing alliance? Who will own new intellectual property rights and patents produced by your partnering?

Prior to making contact with the prospect partner you should conduct as much research as is available to you. A second, more comprehensive and mutual due diligence phase must be undertaken once both parties have agreed to embark on negotiations. You will want to personally visit your prospect partner's offices or production facilities.

Before you engage in any partnering effort, be sure your expectations are valid. Don't be swayed by promises your partner may not be able to keep. Don't be sucked into deals offering revenue you may never see. First, you must define your own partnering goals. Second, find a compatible ally. Before you start negotiating with anyone, conduct the appropriate due diligence to be sure they are actually capable of delivering up their end of the bargain.

About the Author

Harvey Kraft is Managing Director of Partner http://partnershipsmedia.com a California-based marketing consultancy specializing in executive support for strategic alliances and partnering initiatives. Mr. Kraft is a skilled partnerships executive, author and speaker, and creative marketing director with two decades of senior experience in the media, finance, publishing and wellness sectors.