Business partnerships vs competitors: what road to take?

Many partnering opportunities fall short of their potential because of differences – different goals, different cultural norms, different business systems, different national attitudes – to name a few

If business partners approach each other as real allies rather than enemies, both can become more competitive in the marketplace, writes Dave Hanna

Today’s global marketplace offers a multitude of opportunities for different players to collaborate in business ventures. Business partnerships, strategic alliances, mergers and acquisitions, joint ventures, cross-functional teamwork, and work teams are some of the most common relationships being employed to extend one’s global business reach.

As the table shows (in research conducted by Forbes, Harvard Business Review, McKinsey, and others), these relationships disappoint their partners more often than not (note the benchmark of these organisational partnerships versus divorce in the home).

Much has been written about the cultural barriers to partnering and how to overcome them. Certainly egos must be restrained, strategies must be reshaped and structures may need to be altered. But there is a person-to-person element in these relationships that too often is overlooked.

Many business partnership opportunities fall short of their potential because of differences – different goals, different cultural norms, different business systems, different national attitudes – to name a few. And all partners want their differences to prevail over others. Those who cannot get past their differences will not be able to forge a successful union.

George, the general counsel for a large global company, provides a good example of shaping an effective partnership out of major differences. George had been designated to represent an industry association to reach agreement for recycling aerosol spray cans with a major waste disposal company. This company had steadfastly refused all such previous requests.

Rather than try to “sell” the CEO on the industry association’s need, George started the conversation this way: “I would like to understand the problems you see with having your operation recycle these aerosol cans. If we can’t find a way to address your concerns, I will go home and leave you in peace.”

“Too often we transfer our ‘survival of the fittest’ mentality from the marketplace to those we need to work with as partners”

The CEO said he was concerned about recycling because it would release fluorocarbons into the atmosphere and there was danger of the cans exploding and injuring his employees.

Then George said, “So, we need to find a way to recycle the cans without releasing fluorocarbons and endangering your employees.”

“That’s right,” said the CEO.

The two then brainstormed some ways to meet this goal. After a lengthy discussion, they found a solution. In the aftermath, a contract was signed and both parties won – a new piece of business for the waste disposer and $40 million in annual savings for the aerosol can manufacturers.

This breakthrough was fuelled by the managers’ willingness to understand and respect each other’s needs. Their competitive energy to maximise their own gain took a back seat to the greater need to collaborate.

Too often we transfer our “survival of the fittest” mentality from the marketplace to those we need to work with as partners. When partners treat each other as competitors, the relationship falls apart – as the research shows. If partners can approach each other as real allies rather than enemies, strategies, structures, systems and culture all can be adapted for successful outcomes.

The bottom line is this: competitors make poor partners. True partners become more competitive in the marketplace.

How to approach a business partnership conversation
This process can be used to facilitate partnership discussions at the outset of negotiations, mid-stream as new differences arise, and in times of crisis when previous plans need to be redrawn:

  1. First, explore other’s points of view before expressing your own view. Listen to and list the needs of others. Understand what it would take for the other person to “win” in the partnership. Then clarify what your win needs to be.
  2. Next, identify the key issues (not viewpoints) involved. Differing viewpoints frequently are polarising, such as, “You must reduce your staff” and “We can’t cut our staff”. The underlying issue might be profitability. It’s far easier to reach agreement on what the key issue is – and agreeing to this is a big step towards leaving differences behind.
  3. Determine what results would constitute a fully acceptable solution. If the issue is profitability, “How profitable do we both need to be?” Answering this question is a second agreement – and a new discussion pattern has been formed.
  4. Consider possible new options to achieve the agreed-upon results. Be patient and determined to find solutions that work for all parties. Stay in the conversation until that legitimate “win-win” solution is found and agreed to.

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