Partnerships -- Though and Critical
Interest in them is increasing for good reasons
Tom Peters said it about "The Power of Partnerships", 'John Mariotti Knows his subject cold!" Let The Enterprise Group help you build better partnerships.
It seems the interest in partnerships is increasing almost daily. A couple of years ago as I wrote a book on Partnerships, I worried that it would be out of date by the time it hit the market. Little did I know then that the topic would grow in prominence. Several books on the topic came out about the same time as mine, and each took a slightly different approach, but all came to same conclusion--partnerships are very powerful when done correctly, and very easy to do poorly. I am increasingly questioned about how to do successful partnerships, yet not lose that hard to get, low cost position. The answer is "tenaciously, but very carefully," sort of like removing a bone from the jaws of an irritated pit bull!
As I reviewed my own research and experience, and studied the works of others, there seemed to be heated agreement that the most critical issue in forming partnerships is trust. Trust is built slowly and can be destroyed quickly. I picture the process of blowing up a balloon. It inflates slowly, but the slightest relaxation, and all the air escapes. People today are becoming increasingly jaded and cynical. Trust is hard to earn. Being trustworthy is a daunting challenge, and yet without trust, no true partnership can survive for long.
Perhaps there is something that even comes ahead of trust--that is making an intelligent and thoughtful choice of partners. The choice often determines the potential for success regardless of what else happens. If that choice is well made, the partnership can build rapidly (although not without difficulties). A poor choice will waste a great deal of time and effort, but worse than that, it will dampen the enthusiasm for the potential and power of partnerships.
No one can afford to be good at everything these days. The column I wrote a while back on Outsourcing/Insourcing drew many comments. It coincided with a blizzard of "outsourcing" articles, and outsourcing has become a hot topic. Outsourcing is dependent on partnering. An arms length, buy-sell relationship just fails to be fast or efficient enough to survive in today's dynamic business climate. The most widely recognized current example of successful "partnerships" is between Chrysler and its key suppliers.
The older "hot topics" of TQM and Lean Production just describe different forms of partnering. TQM deals with employee/team partnerships extensively. Lean production deals with the supplier-customer partnerships. If it seems that all of the popular "buzz-word" approaches are converging, don't be surprised. People, working together, are at the bottom of all this. Organizations must work together, and collaborate intensely to succeed. When they do this in strong partnerships, synergy occurs and the power is truly enormous.
Partnerships became a bad cliche because of widespread abuse. Then someone coined the term "Alliances," in hopes that changing the name would change the behavior--wrong! Still, everyone likes to talk about partnerships, and with the explosion of the telecommunications and information technology industry, we read almost daily about some new "partnership between two or more businesses , especially where the Internet is concerned. Are all of these true partnerships? No way! Do all the participants hope to get some advantage out of them? Of course. Will they? Emphatically, no! Many of these so-called partnerships are nothing more than "one-night stands."
One of the most important keys to building partnerships while maintaining a cost competitive position (often gained by the old win-lose, bidding war type negotiation) is to remember that a customer is an "agent" for the supplier. The customer uses the supplier's material or service and bundles it in with their own value added, then sells it in the marketplace. The marketplace is the relentless truth teller. If the offering measures up to the test of "best value" it wins. If not, it loses. Only a customer/agent who honestly and accurately portrays the competitive environment to their supplier-partners can hope to achieve the value needed to win in the market. There need not be anything adversary or mean spirited about it.
I always recall the way a particular Wal-Mart V. P. often described it to me. "This is what the market demands. If you can compete, we will give you the opportunity." (Of course, unscrupulous buyers might lie about the market demands. That is always a risk. It is because of this risk that you must also have a good idea of the market situation from other customers.) If the relationship with the buyer is good, and the buyer is honest about market demands (or if you are the "buyer" and you are honest), then the supplier knows what challenge must be met.
Even after the nature of the challenge is accurately and honestly defined, there is another obstacle--culture conflicts. differences in culture can be difficult obstacle to overcome. I like the way author Rick Maurer puts it in his newsletter Foundations for Change: "...Since each company believes that its way of operating is how God intended life to be in corporate America, major differences in culture would be difficult issues to face..." This culture match issue is why I emphasize the importance of the careful choice of a potential partner, and getting the "sticky issues" on the table very early in the partnership discussion.
There are many pitfalls along the way, but the journey is worth it. By far the most desirable way to work with suppliers is as partners. To build trust, someone must take a risk, and be the one to go first. Whoever has the greatest need is usually the one who will go first. If the more powerful partner abuses that power, it will poison the relationship. Remember the guideline: to have a partner you must be a partner. Nothing good comes easy, but the rewards will be worth the effort. However, once formed and built on a solid foundation, such partnerships are immensely powerful. Choose your partners carefully and then go for it. You'll be happy you did.
