Partnernomics

by Mark Brigman

  As previously stated, strategic partnerships fall into the dynamic world of “incomplete contracts.” So by definition, the PDLs and governance leaders will be working on a continual basis to more fully define the strategic relationship. This is why having a strong, supportive governance process is a MUST. The lack of a competent governance team and process are frequently cited as leading causes of partnership failure.

  The governance team should meet no less than semi-annually. For most partnerships quarterly meetings are sufficient, but monthly is not uncommon for more complex initiatives. Simply stated, design what you need. The cadence of governance meetings can always be adjusted over time.

  Each company’s PDL will play the primary role of coordinator in the governance process. Some of the key governance related responsibilities of the PDL includes documenting discussion topics between governance team meetings, prepare governance meeting agendas, leading session discussions, and ensuring issues are addressed and resolved. The ultimate responsibility of every PDL is to lead their strategic partnership to success.

  Partnership Communications

  The success of any relationship is heavily dependent upon effective communication. In our strategic partnerships, it is imperative that we set clear expectations and continually communicate performance based upon our expectations. In this process element, we want to create a partnership communications process to outline how we will regularly share metrics to monitor the partnership’s performance based upon the expectations that were set by all parties.

  It is considered a best practice to collectively create and consistently share a “partnership performance matrix” (PPM) document with the governance team for each strategic partnership for which you are a member. Recall that the governance team includes executive sponsors, PDLs, technical leads, marketing/sales, and performance management leads from each company. The size and scope of your governance team will depend on the size and complexity of your strategic initiative—the quantity of members is irrelevant. What is important is that clear, consistent, and accurate information is shared so all critical members are continuously informed of your partnership’s heath.

  The partnership performance matrix (PPM) document typically takes the form of a spreadsheet where each row captures information for one goal or key performance indicator (KPI) that will be monitored. Recall that the goals and metrics are collectively created and defined by the teams during and immediately after the partnering agreement negotiation. The PPM is typically shared with the governance team on a weekly basis, but this tempo depends on the volatility and criticality of the metrics. It is not uncommon to only issue a PPM once per month and for critical metrics that require significant oversight, more frequent updates may be necessary—it’s your team’s decision.

  Most spreadsheet software programs offer useful functionality that can make PPMs easy to build, maintain, and read. For example, spreadsheets (as opposed to a word processor document) allow for easy calculations of averages and totals, among other statistics. Spreadsheets also allow users to perform conditional formatting of cells that will automatically change a cell’s color to “red,” “yellow,” or “green” to visually display each metric’s current status. In just a few minutes, a very useful PPM can be constructed that will allow for efficient management of your partnership’s key metrics.

  Dissolution of Partnership

  It may seem pessimistic or defeatist to spend time building processes that describe the end of your partnership before it even begins, but this is not the case. Having a partnership dissolution process in place is considered a best practice and you should include these tasks in each of your partnerships. By setting clear expectations for every phase of your relationship, ambiguity and conflict are minimized. In the event a specific partnership comes to an end, having well defined procedures will speed the process and significantly reduce stress levels for each party.

  A good Strategic Partnering Agreement (SPA) will include a section commonly named “disentanglement.” This section of the SPA covers basic terms and procedures for handling confidential information, created products, manuals, designs, and other developed and/or jointly owned assets. The disentanglement provision will likely specify timelines and other obligations that each party must comply as a part of their partnership obligation. In the event intellectual property was created or co-created as a result of the partnership, this topic will also be addressed with specific procedures to govern the ownership and licensing aspects.

  Implement the Partnership Processes

  After your partnership processes are defined, you need to arrange them into a manual—a single source reference. With this new process manual in place, your teams can receive proper training and be more self-sufficient. The process manuals should be user-friendly and easy to follow. Obviously the intent is for the process documents to be used by all members of the partnership teams and not to become permanent bookshelf ornaments.

  As your partnership evolves, many of the processes will need to be fine-tuned. In this case, create versions so each team member understands the current process, but be sure to keep a record of past versions in the event questions are raised. As you build partnering documents for one partnership, they can act as a template for future partnerships. It will be up to you and your partner to determine what, if any, adjustments need to be made to your template process documents.

  CHAPTER 10

  PARTNERNOMICS.com/C10

  Results Element

  NOTES:

  –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

  ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

  ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

  Results Element

  The results element is where we put the full Strategic Partner Leadership Model (SPLM) into practice. In order to achieve maximum results in any partnership, you must first maximize results in each of the first five SPLM elements: vision, teams, goals, metrics, and processes. Achieving significant results is not an instant outcome but rather an evolution of continuous monitoring and adjusting your approach within each element. As your teams become more proficient at each element, the overall value of your partnership increases.

  In Chapter 7 you identified the goals and key performance indicators (KPI) that will ultimately define success for your partnership. To break partnership success down a step further, accomplishing great results is dependent upon the clarity and alignment of the vision, competency levels of the teams, accuracy and communication of metrics, and efficiency and adherence to processes. Outstanding performance of any partnership requires outstanding performance within all elements. The real question is, how can we best position our company for success in all elements, simultaneously?

  When thinking back to the Malcolm Baldrige model that was explained at the beginning of Part II, did you notice the first and last elements of their seven-element model? The Baldrige model’s first element is leadership and the last element is results. This is not by accident. The structure of their thirty-year-old model claims excellent performance in business starts with leadership that is supported by a disciplined framework (five middle elements) that leads businesses to significant results. Do you agree?

  Now, let’s really break partnership results down to its simplest form—the least common denominator. The true art and science of developing successful strategic partnerships is ultimately dependent upon people and their abilities to create, implement, and execute a partnering plan—that’s LEADERSHIP!

  The greatest obstacle to success in any partnership is one’s ability to lead.

  One of the greatest causes of poor results in a partnership is due to each party’s focus on managing in an attempt to control results instead of leading to influence the delivery of results. The distinction between the two approaches may not be obvious at first glance. But as you “peel the onion” to discover the subtle nuances between managing and leading, the differences are clear.

  Management Versus Leadership

  I feel compelled to start this discussion by asking the question “What is the difference between a manager and a leader?” Ask five of your co-workers this question. I bet you get very different responses from each person. The SPLM framework could very easily have been named a management model like so many other models in business, but the term leadership in Strategic Partner Leadership Model has a very specific meaning, especially within the context of strategic business partnerships.

  Recall that a common definition of a manager is “a person who controls or dictates the affairs of a business, institution, or initiative in order to achieve an intended outcome.” Perhaps “managers” in transaction roles can truly control or dictate the affairs of their vendors. However, when dealing with strategic partnerships, this is not possible. The titles “relationship manager” and “partnership manager” are an oxymoron and the sentiment it suggests is false.

  In a strategic partnership, we are intentionally partnering with another company who can deliver a value-add product or service to our arsenal that allows us to collectively create a competitive advantage, right? Well, by very definition, we do not have the knowledge or expertise to control or dictate our strategic partner’s work. We selected our strategic partner because his/her company offers something that we do not have, something that is outside of the scope of our expertise.

  There is no way we can control or dictate the product, service, or partnership because we do not have the expertise, and if we do our partnership is doomed to fail. Why? Because if we were smart enough to control or dictate the product, service, and entire partnership, we would have created the newly envisioned solution on our own, and we would not need the new partner. The control and dictate path is reserved for the organic growth option, but we chose the partnership journey and it requires skills that go far beyond vendor management.

  If we look up the definition of a leader from progressive leadership consultants such as Simon Sinek, Jim Collins, or Patrick Lencioni, we will read a definition such as, “A leader is a person who is able to create an environment of trust, respect, accountability, and security that enables others to perform at their very best, without fear of undue consequences.”

  With this definition of leadership, we do not see the words “control” or “dictate” presented. Instead, we get a sense of building a supporting and collaborative environment to influence the achievement of a common goal. Doesn’t the leadership approach seem more inspirational and something behind which people would want to rally?

  To bring the topic full circle, know that the success of your strategic partnerships will depend on your Partner Development Leader’s ability to “create an environment of trust, respect, accountability, and security that enables your internal and external team members the ability to perform at their very best, without fear of undue consequences.” Strategic partnership success is a function of leadership ability—not simple management skills.

  Partnership Success Pyramid Refresh

  The Partner Development Leader is the primary “pilot” to ensure success for each strategic partnership. The PDL is the relationship ninja that is constantly working to further develop the partnership and foster its success. Do you recall the Partnership Success Pyramid that was shared in Chapter 2? The ultimate linchpin to partnership success is leadership (at all levels) and the five imperatives ensure fertile soil to support partnership success (results) are: trust, alignment, transparency, esprit de corps, and results.

  In order to achieve outstanding results in your strategic partnerships, it is imperative that employees at all levels, from every partnering company, focus on furthering the development of these five success elements. Leading strategic partnerships can be very challenging and laborious work. But this is what it takes to achieve greatness and the 10x growth rates that Bernie Brenner achieved as a Co-Founder of TRUEcar. Strategic partnerships are your “wildcard” in business. They can deliver nearly any resource, product, service, or competency that you need in order to grow. Remember,

  The greatest obstacle to success in any partnership is one’s ability to lead.

  The Executive’s Leadership Role

  Nearly every business executive loves to discuss leadership and most have an appreciation for what good leadership offers to their organization. When these executives share thoughts on business tactics and responsibilities for growth, they usually talk in terms of management, not leadership. Executives frequently focus on the short-term financial or production results rather than leading their organization with vision and strategy. Why is this? According to Simon Sinek, author of Leaders Eat Last, it is
because management outcomes are much easier to quantify and measure, especially in the short run, as compared to leadership outcomes. Sinek argues that this is why performance reviews and year-end bonuses are structured on management outcomes; they are easier to tie to a number.

  Managers who seek to build high performing teams must master leadership traits and principles. But the outcomes of great leadership are almost purely qualitative in the short run. That is, great leaders are able to instill a sense of purpose, focus, accountability, and achievement that result in outstanding individual and team performances. Unfortunately, these high-value attributes can take time to translate into clear, quantifiable performance outcomes. This is one of the great challenges in the discipline of business leadership: How can executives quantify purpose, focus, and accountability that one person or supervisor is able to instill in his/her team versus another supervisor?

  Sinek shared a personal observation after conducting leadership research with various branches of the U.S. military, including the Marines. He stated that the Marines seem to approach organizational leadership in the exact opposite way as compared to the private sector. He witnessed time and time again that leaders in the Marines [military in general] were naturally selfless as each leader provided for his or her team before they provided for him/herself. Hence, the title of his book, Leaders Eat Last. Sinek states, “The military gives medals to those who are willing to sacrifice themselves so others may gain, but in business we give bonuses to executives who are willing to sacrifice their people so they may gain.”