7
Steps to Creating Great Partnerships
by Barri Carian
In today's business environment, establishing some form of collaboration, whether it is a loose alliance or legal partnership, can help small businesses create quantum leaps in growth. But what about the horror stories of partnerships gone bad? The costs, both financial and emotional, have left many entrepreneurs vowing "never again!"
But it doesn't need to be that way. Creating great partnerships requires us to look beyond the surface when selecting a partner. While knowing your potential partner's skills and expertise is important, it's only the beginning.
The following seven steps can enhance your chances for success:
| 1. | Do your due diligence. It's not enough to get along well. Do you share core values, vision and expectations? Most fatal conflict will arise as a result of these unexplored areas. This is the step many people either ignore or gloss over because they are uncomfortable asking these questions, take answers at face value, or are too vested in the outcome of selecting a particular person as a partner. |
| 2. | Establish roles and responsibilities. Fortunately, we usually team up with someone who has complementary skills. Understanding our differences as strengths and recognizing each other's weaknesses is critical. Defining roles based on a candid assessment of these areas will prevent ego conflicts, duplicating efforts and sending out mixed signals. This does not mean rigid job descriptions, as the organization must remain fast and flexible. |
| 3. | Define your decision making process. How will both the day-to-day and major decisions be made? Look at every aspect of running an organization then define how decisions will be made. Will they fall under each partner's functional area or will decision making be shared? How will differences of opinion be handled? Partnership does not necessarily mean consensus, and disagreements are inevitable. Know how you will deal with them before it happens. |
| 4. | Establish leadership role. Partnerships are not flat organizations. They do have leaders. Leaders play multiple roles, and the partnership may have multiple leaders depending on the situation or task at hand. What is the most effective leadership model for your organization? |
| 5. | Communicate. Know and respect your different communication styles. How do you each best receive and process information? How often should you be communicating? About what? Be aware of the quality of your communications-are you falling into the trap of "group think?" Successful partners know how to cultivate disagreement by challenging each other's position in an effort to reach the best solution. |
| 6. | Embrace and plan for change. Everything you put in place in the beginning will change. As your partnership matures, the need to confer on every decision, for example, will probably disappear. Markets change, customer needs change and products and services may change. How will these changes impact your initial agreements on roles, leadership, decision-making, etc.? Planning for and agreeing upfront on how you will tackle these critical junctures is key. |
| 7. | Have an exit strategy. Personal circumstances (divorce, death, etc.), may force one partner to reevaluate their commitment to the partnership. A once-thriving partnership can become untenable. If you can't renegotiate the terms of the relationship know ahead of time how you will handle it if you decide to part ways. |
It is important to memorialize your understanding with your partner(s) in writing to include the initial equity investment amounts, roles and responsibilities, voting arrangements and your exit strategy. Investing time in the beginning will pay big dividends in ensuring a successful partnership.
Barri Carian is Principal of Carian Consulting, providing solutions for organizational growth to small and mid-size companies. She has helped numerous partnerships thrive through intervention coaching. Barri can be reached at (949) 640-2141.