I was at a gathering of Alliance Managers in Chicago last week. During the discussion, someone referred to Secretary of State Mrs. Clinton’s book titled “It takes a village”. In this case, the reference was that getting alliances to be successful requires getting the entire organization to recognize what it takes and to behave accordingly.

That is a big job!

That is a job that could take years……..

How do you even define what is different in behaving as a ‘good partner’?

Here are two thoughts that I plan to expand on in future articles.

Partnering requires purpose. Having a relationship that is intended to have a mutually beneficial goal, demands behavior that is purposeful. No one is being served by ‘nice behavior’ that overlooks flaws and missed targets. Obviously, purposeful behavior includes all variants of interaction, but in a tactful, diplomatic manner. After all, you do want to have a long term relationship together. That this is indeed possible demonstrates the alliance of firms in the Dutch VOC “Verenigde Oost-Indie Compagnie’: This purpose-driven alliance lasted for 200 years! (thanks to Peter Simoons for reminding me of that fact from our shared Dutch history)

Partnering involves understanding and managing conflict. OK, most business have implemented some form of conflict management training over the past decade or so. But what is the significance in terms of partnering activities? You are investing a lot of resources in partnering, some of you after long and hard resistance against something that is very hard to measure for results. Outright financial resources, employees time and maybe other types of tangible commitments.

So say that the project you and your partner(s) had originally planned turns out not to pay off. Are you going to engage in fingerpointing and as a result of that will you declare the partnership ‘over’? Or do you have the maturity in place to recognize that project, product and service ideas may turn out to be flawed, regardless of the health of the relationship?

What you must be able to do is manage the resulting conflict and recognize it for what it is: a learning opportunity that is the actual ROI of the efforts to invested in this partnership! A mature partnering organization is able to distinguish between the health of the collaboration and the health of the project that is the subject of the collaboration. You must be able to reflect on the activity together as partners and at the very least recognize the failures and their root causes.

Sometimes, initial metrics are not expressed in financial reward. Rather, measuring the strength of the relationship as a result of navigating through adverse conditions is the true pay off for an organization that understands: partnering mentality is different from ‘business as usual’. That is a process of change that must be traveled with purpose.  Alliance Managers are by their nature and experience perfectly suited to your company’s purposeful change agents. Use them for what they naturally do best and trust their work, even though the payoff is not (always) immediate.

Joost

My company, Allinnova, recently conducted a first of its kind survey among individuals who manage Alliances and Partnerships. Goal of these surveys is to determine which of those collaboration best practices appear essential to achieving long term success with this business strategy.

The question

“In the absence of formal standards for partnering, is there agreement on a set of practices that appears to make every company that deploys it, more successful in the long run?”

Can we, listening to those with 10+ years of pioneering experience, determine a set of practices that we can comfortably call GAPP? The report can be found on the Allinnova website at this location.

The first survey is now closed and the results are fascinating.

For this first study, the participation was moderate, as could be expected. General interest in the concept appeared quite high with over 230 individuals visiting the survey site to learn more about it. Allinnova promoted the project exclusively through its website, as well as selected social media sites: LinkedIn, Facebook, Twitter.

Summary of Results

The survey respondents were overwhelmingly in a partner management role. Only a handful had never been in such a role or were no longer formally in such a role.

All respondents were focussed on strategic dimension practices. Practices in this category were more often voted “essential” or “very important” than practices in other categories. This is encouraging news, because it shows that the practitioners themselves at least maturing in their thinking and moving away from considering only opportunistic reasons for partnering.



Most practices considered relevant to build sustainable partnerships

Practices in the “Cultural” and “Governance” dimensions received very few to no scores in the “essential” and “very important” range, when calculated as a total respondent group. This is not encouraging, because research shows that those partnering activities that rely on people to make things work, are most often the reason for failure of the partnership.

Most valued practices

Strategy supporting practices preference

When looked at the responses per partnering dimension, practitioners and none-practitioners alike agreed on the importance of practices that support strategic initiatives.

This is all the more significant, because generally, alliance managers do complain about not getting the attention and recognition for contributions that they believe they are due. The question becomes: If they are correct about the importance of strategy-supporting partnering practices, how can they get the ear of C-level executives? For those that recognize this issue as one they are themselves struggling with, there is an interesting opportunity to discuss this with representatives from the Alliance Management community on September 9, 2010 in Chicago. Contact me for more information.

Finally, a ‘top 10′ list of those practices that were favored overall. No unanimous votes, but these were favored strongly enough to single them out.

We will be running this practitioner oriented survey again in the fall time frame. Look out for it, or, better yet, register to receive a notice when the survey is available. In the mean time, download the complete report at the Allinnova website

I predict that one of the European nations will become world champion on Sunday, July 11, 2010.

That’s is not too difficult, a 75% probability at this point in the tournament. How did it get to be this easy? And was it this predictable even last week? I say, yes, based on two complementary aspects: the game of soccer has morphed, as it does about every decade, and the South American national teams have not adapted and matured with it. Where their individual skill and personality during each game ultimately made the difference in previous World Cup tournaments, their emotional involvement with the game now appears to quickly be their Achilles heel. Point in case: Brazil and Uruguay both lost their game against European national teams because they individually and as a team lost their heads after unexpected setbacks as far as I am concerned.

The world of business is changing before our eyes as well. With partnering taking hold in many companies across industries, Executives must rethink what it takes to put winning teams on the field of international business. The strengths of American companies ten years ago might keep them from a maintaining a sustainable competitive advantage. In my opinion great business teams balance three crucial aspects:

1. Solid organizational framework
2. Well educated and well trained employees
3. An environment in which each individual can find enjoyment in the assigned role

American business in recent history relied on strong central management to direct the flurry of activity that is associated with its philosophy of ‘trial and error with continuous refinement’, leading to an ever more stable system producing wins. This works, as long as the game doesn’t change around you. It is now.

As I mentioned in a previous post, I recommend companies take a serious consideration to moving from a American football playing style to a Global soccer playing style. The increasing adoption of alliance and partnering business models is the driving force behind the changing game.

Creative employees

Employees must be enabled to mature to ‘teaming 2.0′, the teaming with employees from other companies in a formal relationship to pursue a common strategic objective. Teaming 2.0 requires individuals to think independently and switch plays and places as the game demands. Today’s game with between the Netherlands and Uruguay showed how the Dutch players could be found in roles that weren’t their starting assignments. Versatile as they are, they played where the game and the team needed them at that phase of the game.

Sustainable framework

Allowing employees to ‘organize their own work and work arrangements’ is a concept that puts up strong defenses among executives. Why? With a flat world that shows an increasing number of players and increasing activity (read: ‘chaos’ to the casual observer) your employees must be allowed more liberty than they have had in recent history. The way to safely give it to them is to deploy a solid framework of practices to support them. In Alliances and Partnering, the Generally Accepted Partnering Practices are such a framework that may be adopted. Such a framework will enhance consistency and predictability, leading to better risk management. Employees that understand the framework, are able to perform their role with creativity and dedication.

Enjoying the game

The third and most important aspect of work in the 21st century: enjoyment in the work you have decided to perform. With free lance jobs popular, economies in flux and people looking for more autonomy to protect their family’s interests, giving individuals an increased level of self-determination in their work makes a lot of sense. Increasingly, individuals decide which company they will work for, and for how long. Acknowledging they contribution creates a greater bond with the organization they identify with. This is a significant element if risk management as partnering relies on individual’s loyalty to the long term objectives of the organization they work for.

Let me just put it out there: It will be The Netherlands against Germany, low scoring game, penalty shoot out, Germany wins.

I am always fascinated by watching soccer, especially world class soccer as it is being played at the moment in South Africa.

I grew up in a soccer nation with heroes such as Cruyff, Neeskens, van Hanegem, Gullit, Bergkamp, Van Basten, etc. So its no surprise that I am drawn to the game of soccer, as opposed to American football (btw, what percentage of play do players in American football actually touch the ball with their feet?).

Since this is a business oriented blog, I thought I share some thoughts about why modern business calls for a soccer approach to teaming, rather than American football. In the context of “Teaming 2.0″ – companies partnering to achieve a common strategic business goal – this comparison seems more than relevant to me.

The essence of soccer to me is the balance between understanding the system(s) of play of soccer vs. the freedom to operate within that system to pursue the ultimate goal: winning enough to secure long term success. But how to achieve that goal? It takes an optimal combination of systems (framework of best practices), individual skill and experience, the right level of freedom to create within the framework, and subscription by all team members to the common purpose for the team.

Systems of play

Every game consists of rules that make it work in a certain way. A better set of rules makes for a more appealing game: for the players, for the audience. Within those rules there are some obvious options: American football has ‘offense’ and ‘defense’ team sections, basketball has ‘zone’ and ‘man to man’ play, baseball has fixed positions in the field. These work for those games because the opponent plays roughly the same formations. There are relatively few options for ‘on the spot’ creativity.

Soccer is an example of a game that allows unlimited variations and adaptations while on the field, in response to the other team’s execution. The beauty of the game is that not only are there many different formations that can be tried, the team has the freedom to create opportunities within those formations. There are 11 individuals on the field who understand the practices, bring their experience, have a common purpose and collaborate to find the best execution possible to achieve their goal.

Talent, skill & experience

At the national team level, each one of the players has shown the talent and skill necessary to ‘play ball’. Most players have gathered international experience in various clubs, especially European and African players. Some even have prior experience playing in a national team, depending on timing of their career and development. The challenge for the coach is to take these star players and mold them into a team that comes together for an occasion. He must achieve that they each downplay their ego (unfortunately seems to come with being a soccer ‘god’) and enhance their interest in playing for the national honor (their paid job at their own club naturally comes first in their mind).

Teaming 2.0 can only succeed on those same terms. Collaboration among employees of multiple companies must be stimulated to the point that the team members subscribe to the fact that the long term interests of the company are served best by focusing on achieving the collaboration goals. Obviously, this individual mentality should be supported by a corporate (read: senior management) culture that enables it.

Common purpose

Coaches of national soccer teams have a unique challenge. The players come together to pursue an intangible goal: reinvigorate a feeling of national achievement and pride.  How do you motivate around a diverse group of individuals to come together and make this their top priority? Not each team is able to achieve this, as we have seen with examples like France this summer.This is especially difficult when the coach has to deal with stake holders of each of the players all demanding their own interests are taken into account.

A similar situation exists when companies come together to collaborate for a common strategic purpose. Each company’s Alliance Manager in charge must formulate a goal and purpose that puts the partnership front and center, while managing the stake holders of his own organization and of the partnership. This can only be done successfully within a supportive environment and with a governance structure that enables the partnership to operate relatively autonomously.

Freedom to operate

But overall, the players are chosen for their understanding of the framework of practices that they can leverage and their individual ability to maximize the opportunities that can be created within that framework. This is a delicate balance that can in reality only be found ‘in context’ by the team that has been brought together. The actual craftsmanship is displayed during the game, when creative ability to defend and develop opportunity are tested.

Similarly, teaming 2.0, or partnering, requires organizations to change the way they have been doing business. Frameworks of practices must be put in place that enable employees to make decisions about how to ‘play the game’ at the partnership level. This demands a level of trust in the employee’s motivation to work towards a goal that is indirect and sometimes intangible: How to be successful as a partnership team, even though in the short term it may generate discussion within your own company because it breaks with the ‘business as usual’.

These are some observations I decided to share with you. I would love to hear your take on the changes in mentality that you believe are required for companies to successfully navigate the global world of business. Please share your comments here or send me emails to discuss privately.

Joost

ItoM, a Dutch startup, recently learned of the initial court findings in its claim against the former Philips Electronics chip division NXP.

The details of this case of “partnering gone bad” between a David and Goliath will become public  over the next weeks, that is not the topic of this post. I am more interested in  discussing the challenges that start-ups and small companies have in finding and working with a trustworthy larger partner.

Derailment

How could this partnership get so far off the tracks? And why did ItoM think it would be prevail in fighting its former partner NXP in Dutch court?

From the information made public these past weeks, it is pretty clear that NXP engaged in one of the oldest business strategies known in the partnering world:

Do whatever is necessary to keep a more innovative product off the market to safeguard your product development investment and secure the desired ROI. This meant partnering with a naive startup company that carries life threatening international patents.

Key Partnership aspects

1. NXP negotiated a licensing and development partnership contract with ItoM that bought it the time and opportunity to pay the lowest possible licensing fees, and
2. NXP negotiated exclusive rights, which prevented ItoM from switching to other partners (for this product) for 2 years.

NXP bought itself the time and opportunity to promote its own (more limited product) at the expense of ItoM’s. How did ItoM’s partner do that in its day-to-day activities?

• Pricing the ItoM product higher than its own, in spite of equal development cost.
• Packaging the ItoM chip in a bulkier housing so that it wasn’t interesting for handheld makers looking for smaller footprints.
• Communicating incorrect or incomplete information to potential acquirers of the technology regarding the effort needed to integrate the component
• Misleading, ignoring and bullying other business units into using its own design
• Ignoring potential acquirers of the technology, in spite of lucrative contract opportunities.

From the perspective of Partnering Ready? the main point of interests here is “How could this have happened?” and how does a SME become partnering ready avoid getting into this kind of life threatening mess?

David’s Naivete

CEO Langendam says that naivete plaid a big role when negotiating this partnership with NXP (Philips). Why? Other partnerships established since then appear to be flourishing for both parties.

Here are some obvious best practice areas that any SME should be addressing to prevent getting into a similar mess.

Understand your ability as a partner SMEs need to better educate themselves and must adopt and deploy essential practices related to high stakes partnering, so called ‘Generally Accepted Partnering Practices‘.
Develop a Business Case. The companies interested in partnering must develop a business plan to understand the impact and potential of the proposed collaborative effort. Counter proposals can be evaluated on the merits of the deal, not on ‘good faith’ in a future partner.
Evaluate the candidate’s reputation. It is essential to do your homework and understand who you are considering partnering with. In this case there was a change in organization during the partnership (Philips spun off its chips division into an independent company, NXP).
Build flexibility into the contract. Lots of things happen during the course of a company’s lifetime. Partners should expect that changes affecting the partner will somehow affect their partnership as well.

These are in fact some of the ‘Generally Accepted Partnering Practices’ adopted by many leading, ethical and successful partnering companies. SMEs would do well to heed their experience and hire the best available certified resources they can afford, before they, too, might have a ‘near death’ experience caused by an unscrupulous partner.

If you have experiences like this, please consider sharing with our audience in an effort to continue to make everyone engaged in partnering more successful. Thank you.

Joost

A colleague of mine, Francine Allaire, just tweeted about a new article in the LA Examiner blog. With commercial partnering the article states the end result is for 85% dependent on human activity. That is significant, because in the partnering community, we all know that 50% of partnerships and alliances started still fail within to generate meaningful results within 2 years. If we can actually address the reasons for failure because they are under our control, that brings hope to a lot of us. I suppose at least to those that have to sign off on future investment decisions. For everyone else it is hard work.

I have seen similar studies and remember seeing the major reasons that failure occurred, according to the respondents. And that is where the chicken comes and lays an egg. Because no work gets done effectively without a framework of guidance, tools, rules and measures, etc.. In other words, the dreaded ‘best practices’. Look at what is happening in the Pharma industry. Excellent people, but the business model is changing around them, preventing them from achieving historical results.

So I prefer a more balanced outlook, one in which systems enable humans to shine. A 2009 survey by the Association of Strategic Alliance Professionals (“ASAP“) and several European Universities highlighted one interesting fact: companies that have begun to make investments in practices considered relevant to positive outcome in partnering are seeing significant improvements in their overall partnering successes. These companies have realized that partnering is a capability that impacts all areas of the organization. And so, it must be regarded a corporate capability, one that must be managed and cultivated like all others that we are familiar with: Marketing, Sales, R&D, Accounting, Strategic Planning, etc.

Most companies are not deriving this insight yet, and so they are not able to move their partnering to a higher level of quality with greater corporate success. Unfortunately, the body of knowledge regarding partnering is itself still maturing and counts relatively few major thought leaders, consultants and successful enterprises. The ASAP organization has played a strong role in promoting this subject and growing the community of practitioners since its formation in 1998.

One of the significant hurdles is a lack of ‘standards’ as you will typically find in other professions (accounting being a well known one with its GAAP rules). But standards are tough to sell, they receive a lot of push back when introduced. Standards do not uniformly apply to every company (pushback 1) nor do they apply across industry (pushback 2), and certainly we don’t agree with all the standards others have dreamt up (pushback 3). So why bother?

Because it is necessary to be able to compare your achievements with that of your peers and have the ability to draw conclusions, be stimulated to introduce improvements, etc. I am advocating the introduction of  “Generally Accepted Partnering Practices” (GAPP) for Strategic Alliances and Partnerships, Collaboration in general. Surely we can agree on relevant practices that have shown their merit over the recent past? Can we agree on the essential practices that everyone seems to benefit from? Let’s work with those and enhance the results we may see from our partnering activities. If you have a moment, share your experience by taking this brief survey: core practices leading to partnering success.

We owe it to our Alliance Managers and Partner Account Managers to give them the enabling environment that brings out the best of their talent. Let’s give them GAPP, let’s help them to be partnering ready and to work each partnership to bring out the potential we saw in it when we strategized about the benefit for all organizations involved.

Welcome to Partnering Ready?

This blog discusses how you and your organization can be(come) partnering ready.

We will have reflections on a variety of aspects related to enabling you to achieve great success in collaborating with partners. There will be discussion on tools and practices that show promise in supporting your goals.

We also intend to carry posts from other professionals with long time experience in managing partnerships in IT, Pharma and other industries, or links to blogs maintained by these noteworthy colleagues.

We hope you will be inspired to chime in with your own observations, questions and experiences that lead to success. Whether as commentary on our posts, or your own original contributions, together we will make this a high value destination for professionals like you.

Joost