SMART Partnering: Orchestrating Success in the Era of Connected Ecosystems

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*The Status Quo Is No More*

In every sector of the economy, there is a new normal. It has been developing for many years – as always brought about by technological advances. Business models are increasingly based on consumption, not ownership. Services and information are built into products. Customers expect similar experiences across all channels of interaction and want to be in control. Concerns about privacy and security of data increasingly enter into every decision – from whether or not to ask your doctor about a health concern to where you bank.

Welcome to the era of connected ecosystems.

New competitors emerge every day from unseen quarters. Incumbents struggle to shift their businesses from legacy cash cows to emerging new models. Some will – many will not. Resiliency and the courage to be bold and think big are essential in the face of ever-changing market dynamics. The challenge is that decisions have to be made quickly and with incomplete information. If decisions were black or white, they would be easy. The challenge – and where opportunity lies – is in the gray.

Traditional build-buy decision making cannot address these dynamics. It simply isn’t possible to control all the sources of innovation, routes to market – or the customer. While the capital markets currently favor acquisition, the dynamics of a marketplace in flux demand that partnering be considered equally and in many cases favored over building or buying.

The problem is that in most companies, the executive suite doesn’t understand partnering. Yes, partnering gets lip service. But it rarely gets its due in the strategy discussion and it is not appropriately resourced. Nor do organizations truly have a partnering capability that allows them to assemble the right portfolio of partners and manage it, leveraging the collective resource pool to deliver customer value — and create and capture value for themselves and their partners. As a result, about half of partnering efforts fail to deliver intended results. That success rate has remained constant regardless of the tools, processes, and skill-building efforts of the alliance profession. It simply isn’t acceptable any longer.

It is time to recognize that the partnering status quo is inadequate. Adding a dedicated partner management group or groups, building traditional reseller channels, and licensing intellectual property can only go so far when these efforts remain outside of the core strategic decision-making process and the mainstream of operational thinking. They are add-ons, “bolted on” to the core business, and thus do not get the resources and focus required for success.

As the great Peter Drucker said in 2001, “The greatest change in the way business is being conducted is the accelerating growth of relationships based not on ownership, but on partnership.” It is time to fully integrate the mindset, skillset and toolset of partnering into the DNA of organizations – to “bake it” into strategy development, resource allocation and the execution of strategy, which is the day-to-day operations of the business. From the executive suite to the field, across business units and functions, and in metrics and financials, the partnering gene must be developed if organizations are to thrive in the new normal of the era of connected ecosystems.

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