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3 Exec Insights on Cultivating Successful Industry Partnerships
There can be an attitude that people who are partner managers are not as sensitized to achieving revenue, developing products and services or the challenges of taking them to market. Don’t ever believe that industry partnerships have little real effect on company revenues or market successes. The people in those roles must know their own corporate business and their partners' business drivers for anything of consequence to be accomplished. Let me walk you through the “why” behind that claim.
Everyone has a boss with authority to “fire” them.
I will start with the argument I’ve heard many times: “I can’t wait until I save up enough money so I can run my own company, no one can fire me!” Unless you are wealthy enough to pour money into a company that can’t cover its operating costs, your customers are your boss. They get to vote with their wallets and “fire” you by not buying from you at all.
A Board of Directors has “bosses” – shareholders, stakeholders and regulators. Shareholders can “fire” directors in a few ways – hostile takeovers, purchasing enough stock to have a voting seat on the board then voting everyone else off the board, or dramatically selling off the company’s stock from their investment portfolios. There are three primary duties for BOD members: Duty of care (diligence in being informed and involved), Duty of Loyalty (prioritize the corporations’ best interests along with its shareholders) and Duty of Obedience (personal and corporate actions comply with local, state and federal regulations).
CEOs have a boss – The Board of Directors. Two top failures by a director in exercising their fiduciary responsibilities are failing to oversee management and making decisions without adequate information. The implication is that a good director prioritizes preventative involvement with a CEO.
It is not “just business.”
Humans are social/relational – even engineers! Regardless of the title or level, humans all have similar fears, hopes and ambitions. In many cases, the fear of failure or being exposed as an imposter is highest in the C-suite compared to the working level.
Everyone has goals set by their “bosses” that advance personal success within the company or cause personal loss of capital with their management chain. Are you approaching a given partnership as if more than your goals matter?
Ask yourself if there is a way to help increase your counterparts’ chances of success while executing the work you want to accomplish with them. Understand the business they are in, how they are working to improve their profitability, and their brand value to their customers. Know whether your success results in their success – at both an individual level and a corporate level.
Do the math. Literally.
Over a decade ago I was responsible for executing a previously negotiated agreement between my company execs and a critical partner’s executives. My counterpart and I started hashing out how to adhere to the agreement while advancing the goals each company had for the partnership.
Just one tiny innocuous comment from my GM caused me to dig a little deeper after some puzzling behavior from my counterpart at our partner: “Don’t worry – they make so much more money with us; they have no interest in stalling our partnership in favor of other actions.”
I did the math. I truthfully hoped to calculate how much more money they would make from our partnership to present that in ongoing negotiations when I instead confirmed they did NOT make more money in our partnership as written. This explained why my counterpart, who like me was part of the pre-close negotiations, was so uncomfortable with the suggestions I made. Inadvertently, I was asking that individual to expend significant capital with their management chain, who were accountable to the CEO, who was accountable to their BOD, to shareholders, on down the line.
As much as my counterpart appreciated me as a person and valued the way I collaborated, they were unable to execute against many of the items my company hoped for. An action from my counterpart that either hurt or simply failed to advance their company’s overall business interests would ultimately be unwound.
Concluding thoughts
Industry partnerships are some of the most rewarding experiences I have had, because the sense of joint accomplishment in executing something that moved everyone’s business forward has very few equals. To take it to the next level, be a student of your own company’s business as well as that of your partner’s. You would be truly astounded at how often these simple concepts are overlooked, and surprised by what you discover when applying them to your own situation.
There can be an attitude that people who are partner managers are not as sensitized to achieving revenue, developing products and services or the challenges of taking them to market. Don’t ever believe that industry partnerships have little real effect on company revenues or market successes. The people in those roles must know their own corporate business and their partners' business drivers for anything of consequence to be accomplished. Let me walk you through the “why” behind that claim.
Everyone has a boss with authority to “fire” them.
I will start with the argument I’ve heard many times: “I can’t wait until I save up enough money so I can run my own company, no one can fire me!” Unless you are wealthy enough to pour money into a company that can’t cover its operating costs, your customers are your boss. They get to vote with their wallets and “fire” you by not buying from you at all.
A Board of Directors has “bosses” – shareholders, stakeholders and regulators. Shareholders can “fire” directors in a few ways – hostile takeovers, purchasing enough stock to have a voting seat on the board then voting everyone else off the board, or dramatically selling off the company’s stock from their investment portfolios. There are three primary duties for BOD members: Duty of care (diligence in being informed and involved), Duty of Loyalty (prioritize the corporations’ best interests along with its shareholders) and Duty of Obedience (personal and corporate actions comply with local, state and federal regulations).
CEOs have a boss – The Board of Directors. Two top failures by a director in exercising their fiduciary responsibilities are failing to oversee management and making decisions without adequate information. The implication is that a good director prioritizes preventative involvement with a CEO.
It is not “just business.”
Humans are social/relational – even engineers! Regardless of the title or level, humans all have similar fears, hopes and ambitions. In many cases, the fear of failure or being exposed as an imposter is highest in the C-suite compared to the working level.
Everyone has goals set by their “bosses” that advance personal success within the company or cause personal loss of capital with their management chain. Are you approaching a given partnership as if more than your goals matter?
Ask yourself if there is a way to help increase your counterparts’ chances of success while executing the work you want to accomplish with them. Understand the business they are in, how they are working to improve their profitability, and their brand value to their customers. Know whether your success results in their success – at both an individual level and a corporate level.
Do the math. Literally.
Over a decade ago I was responsible for executing a previously negotiated agreement between my company execs and a critical partner’s executives. My counterpart and I started hashing out how to adhere to the agreement while advancing the goals each company had for the partnership.
Just one tiny innocuous comment from my GM caused me to dig a little deeper after some puzzling behavior from my counterpart at our partner: “Don’t worry – they make so much more money with us; they have no interest in stalling our partnership in favor of other actions.”
I did the math. I truthfully hoped to calculate how much more money they would make from our partnership to present that in ongoing negotiations when I instead confirmed they did NOT make more money in our partnership as written. This explained why my counterpart, who like me was part of the pre-close negotiations, was so uncomfortable with the suggestions I made. Inadvertently, I was asking that individual to expend significant capital with their management chain, who were accountable to the CEO, who was accountable to their BOD, to shareholders, on down the line.
As much as my counterpart appreciated me as a person and valued the way I collaborated, they were unable to execute against many of the items my company hoped for. An action from my counterpart that either hurt or simply failed to advance their company’s overall business interests would ultimately be unwound.
Concluding thoughts
Industry partnerships are some of the most rewarding experiences I have had, because the sense of joint accomplishment in executing something that moved everyone’s business forward has very few equals. To take it to the next level, be a student of your own company’s business as well as that of your partner’s. You would be truly astounded at how often these simple concepts are overlooked, and surprised by what you discover when applying them to your own situation.
