Partnernomics

by Mark Brigman

  I have noticed that large companies generally push their weight onto smaller partners and ask for a termination for convenience clause. Too often the clause is not mutual, meaning the larger company can terminate early but the smaller company cannot. If you find yourself in this situation, strongly consider if this candidate is right for you. You must be willing to walk away from a deal if it does not meet your needs. Another thing to consider is a financial buyout in the case of an early termination. For example, one party may allow another party to terminate the agreement early but only after paying a fee. This approach can add some financial protection to reduce your risk.

  Disentanglement

  A good Strategic Partnering Agreement (SPA) will include a section commonly named “disentanglement.” This section of the SPA covers basic terms and procedures dealing with the dissolution of the partnership. Not all partnerships are designed to run perpetually and some that are still come to an end. It is much easier to negotiate and specify requirements pertaining to the dissolution of a partnership before it starts.

  The primary points covered in a disentanglement section include the handling of confidential information, created products, manuals, designs, project financials, and other developed works. The disentanglement provision should cover timelines and other obligations with which each party must comply. Disentanglement provisions afford each party an opportunity to clearly state their expectations of how the relationship should be dissolved, greatly reducing the stress and anxiety that commonly accompany unpleasant circumstances.

  PART II

  PARTNERNOMICS.com/SPLM

  STRATEGIC PARTNER LEADERSHIP MODEL™ (SPLM)

  NOTES:

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  The use of models in business dates back centuries. Since the beginning of time, mankind has been on a quest to “find a better way.” Throughout the industrial revolution organizations such as Ford Motor Company were trying new systems, processes, materials, and incentive programs as a means to improve overall company performance. In more recent years with the advent of the microprocessor, data storage and evaluation systems, advancements in leadership theory, and greater empirical evidence that business models can positively impact performance, the use of business models are rising in popularity.

  One of the most widely reviewed and adopted models in business is the Malcolm Baldrige program. This particular model focuses on overall business operations and quality. In 1987, President Reagan led an initiative to create a national business quality program intended to help the US compete more effectively in the globalizing economy. Today, the Malcolm Baldrige National Quality Award is the highest level of industry recognition in the US for business performance excellence. The program evaluates companies in six categories: manufacturing, service, small business, education, healthcare, and non-for-profit.

  Thousands of companies compete for the Malcolm Baldrige National Quality Award, but only a select few earn the prestigious title each year. The Baldrige model of performance excellence consists of seven elements that provide a framework that any organization can use to improve overall company operations.

  Leadership

  Strategic Planning

  Customer Focus

  Measurement, Analysis, and Knowledge Management

  Workforce Focus

  Operations Focus

  Results

  The Malcolm Baldrige program continues to provide a great framework for companies that are committed to improving the overall operations of their business. This begs the question, does such a program exist for companies seeking to develop successful strategic partnerships? Not until now!

  The genesis behind PARTNERNOMICS was to offer a simple, logical, and effective model that companies of all sizes could implement to significantly improve the success of their strategic partnerships. Unlike the Malcolm Baldrige model that is focused on business operations, the Strategic Partner Leadership Model™ (SPLM) is a framework specifically designed for strategic partnerships. In my twenty years of architecting, negotiating, and leading multi-million dollar partnerships, I have yet to find a model that offers what the SPLM delivers to companies.

  The Strategic Partner Leadership Model is a proprietary framework that serves as a tool to govern how companies organize themselves and interact with their strategic partners. The six elements of the SPLM are vision, teams, goals, metrics, processes, and results. Although some tasks of deploying the SPLM are sequential, the model is designed to be impleme
nted in a simultaneous manner. For example, we will need to fully define our collective goals before we decide which metrics to track, that piece will be sequential. However, certain metrics may likely be known from the agreement, which can be documented from the beginning.

  It is important to understand that the elements of the SPLM have an “internal” as well as an “external” component. Unlike a traditional business operations models such as Baldrige that are focused on your company specifically, the SPLM focuses on the strategic partnership, which includes at least two companies. The SPLM asks you to first evaluate each element for your company (internal) and then consider the same for your partner (external).

  We utilize the SPLM only after we have executed an agreement with a partnering company and we are ready to put the formal contract pieces and collective plans into place. The SPLM will act as the living framework to help each company manage the relationship and allow the partnership to continually evolve in a way that offers significant value to both parties. The SPLM will point out best practices for implementation, but it is up to you to decide what is best for your business. Although the SPLM is to be deployed after an agreement is signed, I will provide context to specific sub-elements of the model that should have been accounted for during the contract negotiation phase. If you missed an important task during your contracting phase, be cognizant of the potential risk and attempt to account for it downstream.

  The model refers to each of the six components of the SPLM as “elements.” It is important to note that the term element is used with specific intention and is defined as, “a portion of a larger system that is an essential part that cannot be omitted.” Similar to how scientists use the Periodic Table of Elements that identifies all of the chemical elements of matter, the SPLM identifies the core elements that foster strategic partnership success.

  The following six chapters explain each of the SPLM’s elements in more detail. This model’s elements are completely co-dependent on each of the other elements. Therefore, all six elements must be adopted and managed diligently in order for the strategic relationship to reap maximum value. If an entire element or even a sub-component of an element is not implemented as designed, it can be fatal for the partnership. To use an analogy of the human body, if your body does not have a heart, it does not have life. Although your heart is physically a small portion of your entire body, it is vital for life.

  I strongly recommend that you read through the next six chapters in their entirety before making judgments as to how you should implement this model within your organization. As I mentioned, this model has pieces that are cross elements and they complement each other like pillars. It is critical that you get a full understanding of the model’s framework before you consider your path forward.

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  CHAPTER 5

  PARTNERNOMICS.com/C5

  Vision Element

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  Vision Element

  The vision element of the SPLM consists of three critical parts: your company’s “vision,” “mission,” and “core values.” Each part must be clearly identified by the company’s leadership and communicated throughout the organization. Ideally, members of your organization would have either helped create these vital components or they were hired into your company based upon the standards they represent.

  The vision element of the SPLM offers claims, statements, and beliefs that should be the DNA of every person, team, and decision that make up your organization. I know sometimes talking about the mushy, squishy, softer sides of business and organizational management can be too abstract for certain individuals, but this critical step cannot be overlooked if you want to ensure that all of your employees are driving to the same end result. Some folks, no matter how hard you try, simply do not believe that spending time on your company vision, mission, and core values will ever “move the needle.”

  These old school thinkers believe the only thing that moves the ball down the field is, well, running the ball down the field. This approach may have a small amount of merit if you are talking about a company of one person, where alignment is not an issue. However, there is no doubt that as companies grow, there is an absolute necessity to clearly communicate direction and expectations to all employees, partnering companies, and customers. These critical elements define your mere existence for everyone to see and rally behind.

  Your company’s vision, mission, and core values act
as the instant map and compass for your employees from top to bottom. To paint a word picture, envision an old Viking ship with 15 men on the left (port side) and 15 men on the right (starboard side). The muscular Vikings have long wooden oars stuck outside the windows (portals) rowing the ship forward. You can hear the crew leader calling out a cadence, yelling “row” every three seconds. What would happen if the crew leader stopped yelling the cadence and the Vikings randomly rowed their oars in speed and direction? You would see chaos. This is exactly what happens when companies do not define, hire, and constantly communicate their vision, mission, and core values.

  Not only do business leaders need to communicate the company’s aspirations and expectations, but they should first hire individuals based upon the sub-elements of their company vision. That is, you must start every employee’s journey with your company by proactively qualifying him/her for membership to be “on your bus.”