Dr. Vesna Grubacevic (Cultural Alignment Specialist) and Robin Power (Managing Director Asia Pacific Hub – Affinity Maker™ - a trusted business partner) take you through some immediate steps you can take to get your failing partnership back on track.
The world of partnering can be split into two halves. Those who are in the ‘Downward Spiral of Failure’ and those who are in the ‘Upward Spiral of Success’.
We know that, unassisted, partnerships will predictably fail, and often do. “Numerous surveys say 50 percent to 70 percent of strategic alliances in every industry don't meet expectations”. (Michael D. Lam, "Why Alliances Fail," Pharmaceutical Executive, June 2004).
Increasing The Odds: Creating And Managing Intelligent Alliances, Ranjay Gulati, Kellogg Graduate School of Management
In the Downward Spiral of Failure, partners feel trapped in an unfulfilling relationship where the only way forward is to think of one’s own interests and place them ahead of the partnership. Quite often, these partnerships turn into adversarial relationships where contracts and service levels are the mantra and success is measured by the immediacy of the return and holding onto information becomes a lever to gain a tactical advantage.
Does any of this sound familiar when thinking of some of your own relationships with your partners; be they strategic alliances, distributors, marketing channels or even your key accounts?
Here are three steps you can take now to avoid failure.
1. Evaluate the performance of the current partnership No relationship works well all the time and, when things go wrong, it is useful for all sides to take stock and plan a new route forward together.
Alliances and Marketing Partnerships: Gaining competitive advantage
through collaboration and partnering Ã¢â¬â Gibbs+Humphries 2009
This diagram provides a framework around which to ask questions about the performance of your current partnership. According to Gibbs+Humphries (Moments of Truth or Distrust, Feb 08), there are three factors that determine whether an organisation’s partnerships are high performing; the quality of the relationship, relationship effectiveness and relationship efficiency.
The quality of the relationship is critical and revolves around commitment and trust
Efficiency drives the ability of the partnership to add and create value to the extent that higher levels of return on investment and gross margin can be enjoyed
Effectiveness is the ability of a partnership to actually deliver upon the original objectives
This questioning will help the organisation to clearly articulate the challenges faced in their partnership and gain the clarity needed to begin to repair underperforming, damaged or broken partnerships; or objectively review their status quo.
Here are some examples of what such an evaluation may uncover:
The partnership does not have a clear purpose and value proposition
The customers' response to the partnership offering was not as successful as was initially projected
The partners only discuss contractual outcomes rather than what they actually need to deliver
Milestones are being missed and contractual penalties incurred
No one knows how to measure the success of the partnership
Key people are being lost from the partnership at a critical final stage
The cultures of the partners are completely different
Taking this last example, you would need to carry out further analysis to understand what is causing this cultural misalignment between the partners.
2. In Depth Investigation
By firstly understanding the culture and behaviours in your organisation you will be better positioned to identify partner organisations that are aligned with your culture and behaviours. Because people and their behaviour drive performance, when the behaviours of the key people in two organisations are aligned, so is their performance. Aligned performance facilitates successful partnerships.
A key to making partnerships work from a cultural perspective is the alignment of values between the parties engaged in the partnership. The best way to achieve consistently great results, powerful focus and outstanding harmony and synergy in any business partnership is to align the values of the key people involved in the partnership in such a way that they are all heading in the same direction and achieving desired business results faster. Values are the glue that hold an organisation and any partnership together.
Because values change over time, it is important that you align them regularly to ensure that the internal motivation of the people involved in the partnership remain aligned with the goals of the organisation and the desired outcomes of the partnership. This alignment needs to go beyond simply communicating the values within and across the partnering organisations in order for these to create lasting motivation, and then be reflected in consistent behaviours and results.
3. Turn the Partnership Around into an Upward Spiral of Success
Once you have identified where the problems are in the partnership and clearly understood the drivers of underperformance, you will be in the position to address them head on rather than applying a bandaid solution to symptoms. Understanding the issues is one thing but it is actually addressing the identified root causes that will improve your partnership performance, and will set your organisation apart from the crowd.
Using the Affinity Engine™ - Partnership Repair diagnostic tool as starting point, Affinity Maker™ specialises in pulling existing partnerships out of difficulties and returning them to the Upward Spiral of Success.