Companies can build partnerships with other companies, customers, nonprofits, community groups, or employees. Partnerships between multiple SaaS businesses allow them to quickly and efficiently grow their customer base or strengthen weak parts of the business. Also, building partnerships allows a business to provide more value to existing customers and better gain their loyalty. One key objective of these partnerships is synergy, or combining two entities to achieve benefits greater than the sum of each individual entity; in other words, 1+1 =4.
By building partnerships in the workplace, companies can dramatically increase employee engagement and productivity. These partnerships can be between management and employees or between employee teams from different departments.
Building Successful Partnerships
To survive and thrive, smart companies build successful internal partnerships. Here are tips on how to build partnerships within an organization.
- Establish direct communication. Establish clear expectations of what each partner hopes to gain from the partnership. Define responsibilities clearly.
- Build trust by being transparent.
- Be positive. Inspire others with a vision toward the future.
- Create and nurture a community. Create an environment where all partners feel free to offer and critique ideas. Respect each other and appreciate each other.
- Learn from each other. No one succeeds in a silo.
- Allow and encourage autonomy. Studies have shown autonomy increases employee satisfaction and retention.
Smart organizations also partner with other businesses. Here are tips on how to build partnerships in business.
Set clear expectations of which partner will do what.
- Ensure products don’t overlap or compete. Competitive product conflicts are the reason 80 percent of partnerships fail.
- Be flexible and allow the partnership to grow.
- Make sure each partner receives equal benefits from the partnership.
- Communicate honestly and transparently.
How to Build Strategic Partnerships
Strategic partnerships can help companies gain access to new products, increase customer loyalty, reach a new market, launch a new project, or block a competitor. The first key to establishing an effective partnership with another company is to determine goals. Here are a few tips on how to create partnerships with other companies.
- Establish goals first because goals will drive the choice of a partner. For example, is the goal brand alignment, finding complementary products, or marketing or distributing the product? If the goal is brand alignment, the values of each company’s brands and cultures will need to be similar for the partnership to work well. SaaS firms often form partnerships because they have complementary products. For example, a business that installs water softeners might partner with a water softener manufacturer. For another example, MediaTek which makes a 5G modem, partnered with Intel to build a 5G solution for laptops. The two companies then partnered with computer manufacturers to help distribute the product by including it in their laptops.
- Agree on joint goals and roles.
- Ensure that each receives what they need from the partnership.
Companies also can form strategic partnerships with stakeholders. When companies partner with their stakeholders, they deliberately focus on building the relationship based on trust and positive expectations. Here are some tips on how to build partnerships with stakeholders:
Understand the stakeholders. Stakeholders are organizations or individuals who have a role in the project or business or will be affected by it.
- Engage in an honest, one-to-one conversation. Communicate clearly and transparently. Talk about how to work together.
- Ask them what a successful project looks like in their eyes.
- Be sure each of you understands roles and what you will contribute to the process.
Companies also may form strategic partnerships with community organizations. A company’s social responsibility within the community can be key to employees’ active engagement, says The Society for Human Resource Management. Engaged employees are more productive. For a community partnership to engage employees, it must provide an opportunity for the employee to engage with the cause beyond just making a donation, SHRM says. Here are tips on how to engage community partners:
- First, create buy-in for the cause within your organization.
- Determine the partnership level. The four levels — communication, coordination, cooperation, and collaboration — each reflect increasing levels of interaction and sharing of resources. Also, determine whether the partnership will be for one event, such as an Employee Giving Day or Martin Luther King Day, or for a longer time.
- Define joint goals and desired outcomes.
- Foster trust and respect.
Partnership Building Strategies
Partnerships must create new value, and the partners must work well together. To ensure this occurs, companies and organizations will want to develop an agreement that clearly delineates responsibilities and states how joint decisions are made. The agreement also lists how each partner is compensated for its activities.
Some companies find using partner program templates and software to be helpful in developing the partner strategy framework. While not all types of agreements or partners will require the same documentation, having a template that covers all the aspects of the agreement will save time. Companies also may use software to help track progress toward goals and help companies manage their relationships with partners.
Once a partnership is created, the partners must work hard to ensure the relationship works well. Each partner might consider hiring a partnership relationship manager to advocate for its side while hearing the other. The manager also can help ease tensions when conflict arises. The manager also should be sure that the benefits are balanced between partners.
What Makes a Good Partnership?
One key to a good partnership is ensuring value to both parties. For example, consider Podia’s referral program. Podia helps independent content creators build their online businesses. Its Refer- a- Creator Program partners with existing customers to boost referrals. It offers a 30 percent referral bonus for the lifetime of referred customers. It also helps customers promote their referral links. The partnership works for Podia by providing extra customers; it works for current customers by increasing their revenue stream.
Another key is a shared goal. For example, an engineering business might partner with a historically black university to help train minority engineers. The goal for both parties is more qualified minority engineers. Both parties also gain. The university is able to offer a unique and effective learning opportunity for its students. The company gains qualified engineers while improving the diversity of its staff.
Another key is similar brand reputations. An example is a partnership between well-known and popular brands such as Dell and HP with Intel and Microsoft, which also offer solid brands.
Another important factor in a good partnership is compatible skills or products. One example is the partnership between Internet Movie Database (IMDb), which Amazon bought in 1998. IMDb provides information about movies and suggests readers buy the movies on Amazon or through Amazon Prime. It also partners with movie theaters to allow readers to buy tickets in-app. Another example is Easyjet, which books flights, partnering has partnered with Booking.com and Europcar so that its customers can also book hotels and rental cars.
Most partnerships fail. Here are some ways to make partnerships work:
- Be upfront about accountability — who will do what, what results are expected, and what the consequences will be if the results are not satisfactory.
- True commitment from both partners. Each partner must have some “skin in the game.”
- Focus around a shared goal. Both parties also must commit themselves to the success of the other.
- Balanced rewards. The necessity for each organization to give and receive equally in the partnership cannot be overstressed.
Finally, to form successful partnerships leaders need three important partnership building skills. The first is tracking and monitoring partnership performance. To do this, the organizations must first list their formal and informal partnerships. Then they measure the performance of the partnership itself, including collaboration, engagement, trust, meeting attendance. They also measure whether each partnership has achieved the desired outcome.
The next skill is determining whether to keep or dismantle the partnership. Sometimes organizations have accumulated partnerships that no longer serve a purpose yet are zapping resources that could be used more effectively elsewhere. One way an executive might do this is to make a checklist of the qualities the partners must have to start working together and keep working together. Then review the partnerships regularly to determine if they still function and are still in line with the organization’s strategic priorities. Organizations also should keep a checklist of the circumstances when a partnership should be dissolved.
The third skill is the ability to dissolve partnerships that no longer work without damaging the relationship so that the two partners cannot work together in the future. The wellbeing of your organization depends upon the ability to end a partnership that seeks to fulfill its purpose or may even be causing harm in other areas. Experiences such as irreconcilable conflicts, lack of trust or respect, or withholding important information can be toxic. If a partnership is mandatory, but the relationship between the partners is poor, consider hiring a neutral third party to resolve conflict. Fixing broken partnerships or ridding the organization of partnerships that no longer work clears resources for forming those partnerships that build value for the company and help drive its sales, technology, or marketing.
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