14 Best Partnership Practices

August 7, 2023
Strategic Investment

Partnerships are of great importance and form an important part of your business’ core competencies – whether you stay relevant depends on the partners you choose and how you work with them. As with most things in life, good things take time and effort, and almost always no good can come from rushing into partnerships or maintaining sly partnerships in business. Think sprint vs. marathon – while a sprint helps and provides good results for some time, the ability to build your stamina, strength and technique to run a marathon will help to keep you going in the long run. To get your company to stay relevant and keep running in the long term, it is always advisable to follow the best practices.

Why do partnerships form a part of your business’ core competence?

Partnerships can make or break your company. Seasoned entrepreneurs and B-school graduates all understand it, and that is why they place paramount importance on not just the “who” of partnerships but also “why, when and where”.

Good partner recommendations can help level up your company drastically, but ineffectively forged partnerships will make sure that the drastic change isn’t as positive.

While an initial connect can be made to good partners, sustainable, long term partnerships will come around only if the partnerships are dealt with well. In line with this thought, we would like to outline some of the best practices to forge good partnerships, work well with your partners and maintain your relevance in the long term.

1. Start with the end goal in your mind.
With a concrete end goal in mind, it becomes easier to strategize and organize your plan for the coming years. Simply think about your company’s situation 2-5 years from now – where do you see the business? Thinking about this from a realistic point of view helps you avoid the pitfalls and bear-traps in your path and plan better for the business’ future.

2. Develop a list of partners, and determine how each partner can help you.
Not every partner is created equal and it is for this reason that you need to determine how each partner can help you. Are they going to help drive sales? Customer loyalty? You need to sit down to create a list of potential partners as per your partnership strategy and brainstorm, preferably with your team, on how each partner can be beneficial to your company and how you can work with them and vice versa. Certain factors can help you consider whether a partnership would be relevant and profitable:

3. Every relationship formed must be a two-way street to ensure both parties are benefiting from the connectionEvery partner that you reach out to will look for the benefit that they get from the partnership, as is only natural. Therefore, when brainstorming on your partners it’d be a good idea to form at least a supposed idea of the benefit the partnership could hold for them.Here are some ways to think about it:

4. Start with companies that will take a chance with you
This is especially important when you are a startup – it might take some time for your startupto gain traction and at this stage not all companies will want to partner with you. Instead, try reaching out to partners that will take a chance with you. A local partner might be faster to “close” with than a national partner. They could also be more willing to try a new product than a bigger company.

5. Forge a personal relationship with the decision makers on the other side
Strong relationships allow you to tackle problems easier, collaborate better and open up new opportunities and ideas. Forging a good personal relationship with your partners, within work and outside, can allow you to make better decisions and work together with minimum effort whenever tense situations arise. Develop personal relationships with the people at the leadership level on the other side of the partnership. It’d help keep the line of communication open – a valuable asset with consequences for the long-term.

6. Position your company as a value add to your partner
As mentioned before, your partnership should be a two-way street. The product or offering you have should add value to your partners business, be it direct/indirect sales, increased customer base or acquiring a new skill. Going a step beyond that, if possible, you could also try to see whether there is any value add-on you could provide to your partner. A simple consideration like this could mean a stronger, reliable partnership between your companies.

7. Mutually decide and agree on initiatives to be taken to reach your end vision
As you have defined and strategized around your end goals, so have your partners. Work respectfully around this fact, and mutually decide on and agree on initiatives that would help each of you reach your end vision. Make sure that any initiatives that are planned are in accordance with both parties’ goals and values in mind. Neglecting this could mean a ruined long-term relationship. Having a personal relationship with your executive level counterpart here could mean easier collaborations, faster decisions and better growth.

8. Draft a win-win contract
The first thing you need to do when forming a partnership would be to make sure that your partner makes money. Your partner should – as much as you – feel happy with the profits and margins that the partnership brings. Draft a contract where the terms are win-win and include benefits for both parties, because if you don’t they might end up dissatisfied and looking for different partners. Additionally, this could go beyond your current partnership to potential partners – one bad word could ruin future connections.

9. Maintain accountability on both side
When things go wrong on one side, relationships on both sides are affected. It doesn’t take a lot of time for a partnership then to turn sour and distrust and blame are just the starting point. Instead, it would be better to work out a way wherein accountability is maintained on both sides. In this sense, partnership relationship managers, on both sides, would be accountable for overall management and execution of the partnership, or executives would be responsible for continuously reviewing, prioritizing and committing to the partnerships.

10. Outbound communication and endorsement
Try to see if you can get your partner to launch outbound communication to their customers that could feature a strong endorsement of your organization. With everything going digital these days, endorsement in your partners’ outbound communication would expose you to a bigger pool of customers and/or prospects, and would get them to come to you more easily.

11. Unreasonable expectations and goal
Don’t create unreasonable expectations or goals that are set so high they would disappoint your partner. It’s much more impressive when modest goals are achieved because it helps drive the perception that the partnership that has been formed is one of trust and can be depended upon.

12. Reputation matters
A company’s reputation speaks scores about how they could be partnered with, therefore when deciding on a partner, make sure they have a good reputation in the industry. One bad word could ruin, instantaneously, all of the hard work and efforts you’ve put in. As the old saying goes, “Lie down with dogs, wake up with fleas”.

Warren Buffet himself says it well – “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

13. Quality vs. Quantity
A company’s reputation speaks scores about how they could be partnered with, therefore when deciding on a partner, make sure they have a good reputation in the industry. One bad word could ruin, instantaneously, all of the hard work and efforts you’ve put in. As the old saying goes, “Lie down with dogs, wake up with fleas”.

14. Plan ahead and evolve
Regularly update yourself and your partner on KPIs, metrics and other assessments around the partnership. As needed, make changes to your strategy and evolve with the needs of your customers and partners. Also, always take into consideration the risk factor (big or small) associated with the partnership and craft an exit strategy in the event dissolution is necessary.

Wrapping Up

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