What should you look for in your business partners?

Growing your business is an exciting and daunting time filled with equal parts opportunities and risks. But, as scale-up leaders, you know that going on your expertise alone is not enough to succeed.

Navigating these challenging waters requires not just a solid business strategy, but also fruitful partnerships that give you competitive advantage and drive momentum both inside and outside your organisation.

Studies undertaken by Forrester Consulting across 454 companies found that great partnerships:

1) Generate a greater share of their revenue from the partnership channel; 

2) Drive faster revenue growth within the partnership and at the overall company level; and 

3) Are more likely to exceed stakeholder expectations on business metrics. 

However, finding the right partners is easier said than done. 

In this article, we share 4 things you need from partners to help drive growth, differentiate yourself from competitors, and achieve long-term success.

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1) Transparency

Transparency is one of the basic building blocks of good partnerships. No one wants to get in business with unscrupulous people. 

Yet, it is never as simple as it seems, for two reasons:

First, people naturally rationalise their choices and behaviours. Is it wise to reveal everything to potential partners about where our company falls short? Or tell customers that a competitor's product may be better than ours when it comes to addressing their needs?

If we are honest with ourselves, our answers will almost always go in our favour — whether we try to justify it as “for the greater good of our business” or something that “everyone does”. 

Second, transparency means different things to different people. In some environments, doing favours in exchange for another may be common practice. But in others, these are considered fixing or bribing.

With these things in mind, it is clear that the usual processes — such as compliance policies and audits — can only go so far. For you to determine whether potential partners are transparent or not comes down to your own personal judgement.

Corporate value statements are there as reminders that transparency is not simply on a company level, but also on a personal level.

When establishing relationships with potential partners, regularly pose personal-driven questions that cover transparency dilemmas and decisions. Then go deep into their thinking behind these choices. 

Doing so can help you determine what is considered acceptable or not acceptable for them and how they align with yours.

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2) Deep industry experience

Does your potential partner have a proven track record in your industry or the industry you want to tap into? 

As far as industry experience goes, what you should look for in a potential partner depends on what kind of relationship your scale-up needs in order to grow.

There are 3 types of relationships, at varying strengths, that we can think of in this area:

• Mutual service consortia (weakest): This relationship refers to similar organisations in similar industries. They are able to consolidate their assets to get benefits that are too costly to buy or build alone, such as specific technologies.
• Joint ventures (middle): This relationship refers to organisations that go after opportunities that require skillsets or resources from each other. Whether they choose to tie up their operations or work independently depends on their collective needs. This looks like a company needing another’s technology and the latter needing the former’s market access and reach.
• Value-chain partnerships (strongest): This relationship refers to organisations in different industries with distinct but complementary capabilities. These relationships, with their combined assets, can then generate value for their core markets. This arrangement paves the way for overlapping operations, activities, and functions due to their higher commitment to each other’s growth and success.

So, ask yourself: What gaps does my scale-up have? Who do I partner with to fill these gaps? What value can I give to strengthen this relationship? And do our vision and values align with theirs?

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3) Vision and values alignment

Your vision is something your company strives to do or become not just in the long term but also in your day-to-day. Your values are the reflection of your organisation's core principles and ethics.

Together, your vision and values give strategic direction to your current and future business strategies.

In partnerships, any misalignment in these two areas can mean losing your focus and identity, as well as wasted resources and lost profits. That is why finding alignment in both vision and values should be determined on day one.

So, how do you know if there is alignment in priorities and decision-making with potential partners?

Look to your company’s purpose, mission, and vision. 

Do potential partners have the same set of principles driving their own organisations? What do they stand for? What do they value? What drives them to do what they do? How do they define integrity?

The key is to look for the answers early on, before signing any contracts. The last thing you want is to have your growth objectives stalled and your resources wasted by incompatibility. 

To learn more about how you can create better alignment within your company in terms of your purpose, mission, and vision, read our blog “Why Brand DNA is a Crucial Factor to Your Success”.

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4) Seamless collaboration

Teamwork makes the dream work. 

In partnerships, personal and work chemistry can only go so far. Making sure that you and your partners are on the same page in terms of shared responsibilities is key.

So, how involved do you want your partners to be?

A few questions to help you sort this out are:

• Are you willing to give them voting and decision-making rights? 
• What roles will you play on a day-to-day basis? And what skills can they contribute to overall value generation?
• How will you divide responsibilities in a way that maximises everyone’s time and talents?
• How much capital do you need from them? 
• How much will their share of the profits be?
• How do you plan to effectively address any disputes or disagreements that will arise?

Favourable answers to these questions will help create an environment where everyone can pull their own weight and avoid resentments along the way.

Driving growth and success for your scale-up goes beyond strategy and business models. Your partnerships also play a key role in how fast you can take your business in the direction you want to go.

As a team with varied industry backgrounds, experiences, and skillsets, we have access to vast partner networks with the expertise to help scale-ups rapidly pursue time-sensitive opportunities. 

With our help, our clients have partnered with talented people who have unlocked their business potential and grown their scale-ups to new heights. Partner with us today if you want us to do the same for you.

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