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Avoiding the Pitfalls of a Bad Alliance

Before you join forces with another company, do your research before you find yourself on the wrong side of a losing deal.

Have you ever noticed how everyone wants to be your partner? Everyone wants to find a way to help you increase revenue with the latest and greatest gizmos or "secret weapons." Too many times, we find ourselves in the "partner conversation" with what appears to be a great sales channel, only to find out quickly that it's a one-way street-'re finding sales leads and opportunities while your partner makes the money!

Partnerships, alliances, strategic networks...whatever you call them, on the surface, they're nothing more than two companies coming together to find ways to leverage each other's products and/or services. The goal typically centers on finding additional revenue streams and new market entry points. Very rarely is the word "partner" taken for what it really means, which is someone who shares your business values, ethics, visions and objectives. And a "partnership" is something that benefits both entities looking to find new revenue sources and business opportunities. Often, companies forget that once you find a partner, you need to nurture the relationship and cultivate opportunities so that you both can reap the rewards.

Before you decide to jump headfirst into finding the next great partnership opportunity, think about a few things:

1. Do some internal research. Find out where you have strengths and weaknesses. Look for areas where resources are lacking or could be in the future due to market trends and shifts in supply-and-demand needs. Talk to your employees about their needs for fresh ideas and creativity. Determine which market opportunities you want to seek out and champion in the near- and far-term. Talk with your sales and marketing teams to see what customers are saying about your services, product, processes, expertise and so on.
Rule of Thumb: Don't determine what or who will make a good partner in a vacuum. Partner relationships need company-wide support to make them work.

2. Who's already in your camp? Take note of those partnerships you already have and determine their value to your company. Determine where exactly they fit into your organization and offerings. From there, see if you find any gaps where another partner may be needed to complete the solution. Review your current and historical activities with your existing partners to see who's truly making a difference vs. who's just a name on a joint press release.
Rule of Thumb: More partnerships aren't always the best idea. They could actually lead to more management headaches and fewer results. Keep focused on a manageable handful that you can clearly see, and define their roles and objectives within your company.

3. Take the climate's temperature. Ask around to see if someone in your company or business network knows of a reputable company who may be interested in partnering with you. Does your company already use other businesses to complement your services? Determine whether the relationship can be improved and solidified with defined structure and measurements.
Rule of Thumb: Be careful of the "friends and family" network. Many times, business owners will work with someone they know through a friend or family link because it's an easy relationship and they often get a good price. These partnerships may seem great, but partners should be selected based on criteria such as market reputation, financial stability and longevity, cultural cohesiveness and similarity, strategic offerings, personality connection with key people, sales and marketing efforts, and so on.

A true partner relationship will provide you with the flexibility, confidence, expertise, resources and opportunities you need to drive down a mutually beneficial, two-way street to success. No one said that combining two or more companies to find new business or strengthen core offerings was going to be easy, so why think that way? If approached properly with a strategic plan, partner relationships can be critical to the success and survival of your business.

Here are some things you should consider as you identify and interview representatives from your potential partners:

  • Can they confidently outline their top objectives for developing partnerships?
  • Are they comfortable with offering information about their client base and partner network so you can see where your offerings fit in strategically?
  • Do they have the same sort of business culture, values and ethics that you do? And how dedicated are they to ensuring that everyone works toward that way of thinking?
  • Who are their other partners and what do those partners think of their relationship with the company? What results have they seen that have helped move their companies to new levels of success?
  • Do they have written partner agreements or are the agreements verbal?
  • Do you have leadership commitment from their company?
  • What can they bring to the table to begin the process of finding new business together? How open are they to doing so?
  • Is there an established process for passing leads back and forth?
  • Do they have someone dedicated to working with you and helping both companies achieve their mutual and individual options through the partnership?
  • Are they enthusiastic about working with you on building a mutually beneficial relationship? Do they actively participate in putting together meetings and discussions on next steps and partnering ideas?
  • Do they have an exit plan in case the relationship doesn't go in the direction you planned? If there is an exit plan, how easy is it to disengage and remove yourself from the agreement?

Finding, formulating, nurturing, strengthening and cultivating partner relationships takes time, resources, commitment, dedication, sometimes money, and most of all, a great deal of understanding, patience and trust. Therefore, before you initiate your first partner offering, think first, plan next, be strategic and always do your due diligence to make sure it's a partner relationship worth pursuing- worthy of your dedication and care.


Karin K. Schaff-Glazier is the owner of two small businesses, 3rd Floor Up Inc.and Pinpoint Positioning, in Rochester, New York. Shaff-Glazier has more than 12 years experience helping entrepreneurs and marketing professionals strategize, build, implement and measure their marketing and communications initiatives.

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