Vantage Point Article Library
Partnerships between technology companies can yield a wide variety of benefits and be an effective way to develop new products, get new customers and even enter new markets.
But partnerships can’t run on autopilot. They require a lot of time, energy and commitment. In the technology sector alone, the road is littered with the road-kill of failed partnerships. According to the California Institute of Technology, 60 percent of companies fail in their partnerships and, of those, half have no idea how to measure the value of those partnerships.
The reasons vary as to why technology partnerships fail—goals and priorities may change over time, one party may try to dominate the relationship, disagreements may arise over finances, and so on. Usually, there’s no barometer to measure success but there are keys for avoiding the most common pitfalls:
Key #1: Polygamy rarely works
It can be tempting to “play the field”—forming alliances
with a wide variety of companies and responding reactively to every potential
suitor that comes along. But a few carefully chosen partnerships executed
well are worth far more than a basket-full of partnerships managed poorly.
First, understand your own company—its core competencies, its strengths and weaknesses, its strategic objectives, its value proposition to customers. Then identify and pursue only those partners that further your objectives, fill a need you can’t, and share the same view of the customer relationship.
Select fewer partners and focus on building deeper relationships with them. Consider a tiered approach. For example, develop formal strategic partnerships that are most critical to your success—and make the appropriate level of investment in them—and establish less formal alliances for your “partnerships of convenience.” Remain focused on your customers and how you’ll meet their demands–after all, their needs come first.
Key #2: Focus on results
One of the most common reasons technology partnerships break up is that they
fail to achieve the desired results. Yet an astounding number of companies
fail to define their expectations up front and the metrics to measure success.
When you create a strategic partnership, begin by developing a business plan. Think about what each party can contribute and make sure there are compelling incentives to invest in the relationship. Set measurable goals, such as a revenue target, number of leads or client satisfaction level. The key is to select meaningful metrics that both you and your partner(s) can agree upon. Then, measure performance on a regular basis and modify your approach if necessary to improve results.
One final tip: If you’re the small fry in the partnership equation, such as a VAR for IBM or a services firm working with Microsoft, consider reporting your progress and success periodically. It can be an effective way to head-off the inevitable question: “What have you done for me lately?” and it might help take your relationship to another level.
Key #3: Relationships matter
Even if you excel at the first two points above—developing fewer but
deeper relationships and focusing on results—your partnerships may
still fail if you don’t pay attention to where the rubber meets the
road: personal relationships.
Successful partnerships include meaningful relationships across the entire organization. You can’t expect one sales guy, or even your marketing team, to make a partnership work. There must be connections at every level—sales, marketing, product/service development, delivery, operations, and so on. And it’s imperative your senior management team is both committed and engaged.
Finally, keep in mind that with technology partnerships, just like all relationships, there will be some compatibility issues. The key is to recognize them for what they are and deal with them quickly, before they undermine the relationship.
copyright 2005, KC Associates, LLC