How do you determine the best approach to realize your growth, without taking on significant debt – Acquisition? Organic growth? Strategic partnerships? One of the biggest challenges companies face is finding the appropriate avenue to fuel their growth.
We sat down with Sean Fitzgerald, Business Execution Specialist at Results, to find out how Strategic Partnerships impact his clients.
Are any of your clients engaged in Strategic Partnerships?
I have two clients with Strategic Partners that play a key role in their business growth strategy.
How have these partnerships been beneficial for your clients?
In both cases, the partner is significantly larger than our client and their partner is providing them with access to additional services and new customers in their target market. In both cases, our client has been able to leverage this partnership to create a unique offering that is very difficult for their competition to match.
Have there been any challenges in these partnerships?
The challenge in a partnership for smaller organizations is to be able to understand how larger organizations operate differently from a typical small business. Everything from their structure, corporate culture, risk tolerance, and how they make decisions needs to be understood. Larger organizations have more layers – getting something approved and actioned typically takes longer and is more complex.
Can you give an example of how this can be challenging?
As an example, one of the larger organizations has an executive team and board that includes twenty-six members. That’s larger than some of the organizations we work with! It can be a challenge for the smaller organizations to match the larger company in terms of resources and processes. In addition, larger organizations seem to be in constant state of re-organization causing people to be promoted, reassigned or released which can make the continuity in the partnership a challenge. Having personally worked in a large organization for many years, we used to joke that all titles and organization charts were in pencil and subject to change based on your latest quarterly results!
What advice would you give to someone looking to engage in a Strategic Partnership?
- Treat the partnership like any relationship that is important to you – spend time building trust, rapport, and ensure values alignment
- Spend time understanding what the key drivers are for your partner so you understand what’s most important and ensure those interests are satisfied
- Create clarity regarding who can make decisions in the partnership and spend time understanding how they operate internally
- Build out well documented agreements and supporting processes so that when people change out on either side of the partnership, there is something concrete to refer to. Schedule annual reviews to make sure both parties continue to meet the intent of the agreement and that both are still deriving value
- Ideally a partnership would be with an organization similar in size so that each has as much to lose or gain, but that is rarely the case. The key to a successful partnership is that each organization brings a complementary product or service to the other organization values
- Work on your Best Alternative to a Negotiated Agreement (BATNA) so that if the relationship turns sour, you know what your back up plan would be should the partnership dissolve.
What additional reading would you recommend?
Two articles we found to be helpful are:
4 partnership Secrets for Hypergrowth Businesses
10 Steps to Forming Long-Lasting Strategic Relationships
Strategic partnerships can be a real catalyst for growth and result in gains for all. Most companies don’t consider them as viable opportunities for growth, but we see examples in companies we work with where this has yielded significant, tangible results with far less financial risk than an acquisition. Like any growth strategy, it is not without its challenges, but it is one that companies should always have on their radar. This is especially the case if it means creating a unique offering that differentiates you from your competition.
Sean Fitzgerald, Business Execution Specialist
Results Canada Inc.
Sean Fitzgerald is a Business Execution Specialist (BES), and Partner at Results Canada Inc. As a BES, Sean uses his facilitation, teaching, and executive experience to help business owners transform their business potential into extraordinary results. With over 20 years of corporate experience, Sean is well versed in working with both public and privately held companies and understands how to successfully navigate the complexities of being a fast growth enterprise.