Ah. The famous handshake picture. What a treat.
Let’s discuss a potential collaboration, agree on the terms and shake on it / sign a contract. A partnership is born. And yet, so many partnerships fail. Because in reality, it is a bit more complicated than that.
Let’s start with the definition of a partnership. “A partnership is an arrangement in which two or more individuals share the profits and liabilities of a business venture.” (definition)
Okay, so in theory, not only the two parties discuss a collaboration and then sign a contract, but they then share the profits and the liabilities of said collaboration in the long term.
The main reason two companies enter into a partnership is that both parties are stronger together. They can go further together than either one of them could go by themselves. They have complementary skills, and they have decided that the effort of acquiring the skills they need versus entering into a partnership with someone already possessing them is not worth it.
It is about working together, more than working for one another.
What makes a partnership strategic?
Partnerships come in all shapes and sizes. But what makes a partnership a strategic one? For me, a partnership is strategic when the alliance fosters both parties’ internal strategies. Each company has their own short, medium and long-term goals, and a partnership of any kind should help them reach these goals more efficiently.
To do so, both parties need to understand each other’s core business with its priorities, challenges and expectations. But is this enough to ensure the partnership’s success?
What makes a strategic partnership successful?
Partnerships are complex. Most relationships are. I tried to think of all the reasons why a partnership can fail and come up with a list of elements I find crucial to a successful strategic partnership.
- Aligned goals & expectations: Many partnerships fail because both parties have a different understanding of the goals of this partnership and different expectations.
- Clear roles & responsibilities: A clear understanding of each party’s roles and responsibilities is crucial. No “but I thought you were taking care of this” or any doubt of any kind on who is in charge of what.
- Reactivity: We are all very busy. It is a fact. However, for a partnership to work, each party must take the time to provide each other with the tools, the information and the deliverables they need in order to execute on this partnership.
- Transparency: Probably one of the thing I find most important in a partnership is transparency. Having visible measurable results with clear KPIs. No hiding, everything out in the open.
- Communication: A partnership cannot be successful without a clear & frequent communication, whether is it via weekly emails or weekly meetings, combined with honesty, telling things how they are.
- Trust: I think that every partnership should have a common level of trust from the very beginning, but trust develops overtime and it is helped by all the elements mentioned above, especially transparency and communication.
To be a win-win, it must be based on performance
A partnership needs to be a win-win. Both parties need to share both the good and the bad, and what really tests a partnership are bad times when external factors influence business outcomes and results might be impaired. The partnership will only survive if each party knows the other is doing everything in their power to fix the situation.
The best way to have a successful win-win partnership is to base it on performance.
Relationships between agencies and clients based on performance models are far more efficient than commercial relationships where objectives are not aligned between both parties. That is why at JOT, we only work on performance with profit or revenue sharing agreements with our partners.
We help our partners acquire new audiences relevant to their business, understanding their objectives and goals, setting clear KPIs, working in full transparency, with weekly follow up meetings, and if they don’t make money, we don’t make money.