DISTINGUISHING A STRATEGIC PARTNERSHIP
A Word About Outsourcing
Outsourcing is a B2B contractual engagement to have services performed for your organization that you prefer not to do on your own. When you outsource, you can select the type of business engagement you would like to have which generally falls into three categories: fee for service, partnership, or strategic partnership. For this article, we will focus on strategic partnerships.
Why Choose Strategic Partnership?
There is ample evidence that Strategic Partnerships create better results over a longer period of time. These are results for both parties, not just one of the parties. A frequently used description of a Strategic Partnership is often expressed in an equation: 1+1=3.
Not every company is suited for a strategic partnership, primarily because it requires relinquishing power and control, to equally share it with another company. These organizations may be more suited for a simple partnership, or a traditional fee-for-service arrangement.
There are relationship characteristics that must be mutually part of the strategic partnership and mutually adhered to in order that it reaches the agreed upon goals. They are trust; transparency; collaboration; commitment to innovation; a vested commitment to the other organization’s “win”, and adaptable.
Purpose | Mission | Vision | Values
The skeleton of every organization is the Purpose (the Why), the Mission (the What), the Vision (the When), and the Values (the how). Strategic Partnerships should as well.
As an example, the Allies (strategic partners) in World War II formed a strategic alliance for the Purpose of defeating tyranny and liberating people to be free. The Mission was to join armed forces and implement a battle plan for the European Pacific Theaters of action. The Vision was to accomplish the purpose over a 3–4-year period. The Values were to conduct the war in accordance with the Geneva Conventions rules of war as they were established up until that time. The Convention developed more doctrine following the conclusion of WW II. Often companies call their set of Values Guiding Principles.
These should be reviewed by leaders at a predetermined cadence, particularly the Mission and Vision, for continued relevance to the Purpose.
Key Performance Indicators
The more “nitty gritty” of the Strategic Partnership are the establishment of specific performance outcomes that stem from the Purpose, Mission, Vision, and Values. The parties brainstorm what success will look like, how it will be measured, and how often. These are distilled into what is known as Key Performance Indicators, or KPI’s. This is the virtual scoreboard of operational outcomes. The expectation is that if these outcomes are met, the strategic Purpose, Mission and Vision of the partnership will also be met.
Grows Outside Boundaries
It is noteworthy to convey that traditional fee-for-service relationships and even basic partnerships have boundaries, or specifications to work within. In strategic partnerships, it is expected that there will be a spirit of “kaizen” as it relates to performance. This means regular continuous improvement and innovation around processes and technology. Even if this means bringing other aligned companies into the mix. This does not imply change without adherence to the Purpose, Mission, Vision, and Values of the strategic partnership. Some more impactful changes would be brought to the Governance groups leading the strategic partnership.
A strategic partnership, like most any initiative, needs governance for guidance and accountability. Strategic partnerships will have two forms of governance with two specific roles. The first is the Strategic Governance team that will typically meet at a cadence of twice or thrice annually. The second is the Operational Governance team that will meet at a cadence of quarterly at a minimum. In the beginning of the partnership, it is wise that this team meet monthly. They will focus on Mission execution and the KPI’s.
Should there be a disagreement between the parties, there should always be a process for expressing grievances, however the parties should make every effort to resolve differences at their level before bringing it to the Strategic Governance team.
It is one thing to outline the structure of how a strategic partnership will work, but success is entirely dependent on the team from “top to bottom”. Therefore an “embedding plan” should be developed giving rise to pushing out the information needed for everyone to own and take part in achieving the Purpose. From Board level meetings to Senior Leadership Meetings; to “Town Halls”, to new employee Orientation, and any appropriate forum that will get people on board. It is important that both parties’ senior stakeholders play key roles in this process.
Finally, Marketing and Public Relations should be instrumental partners in the embedding initiative. From developing catchy tag lines to website announcements; to visual communication brochures; to media Press Releases – their expertise will be essential in both the launch as well as the on-going communication of the Strategic Partnership.
Strategic Partnerships are the proverbial “fast ball” of the outsourcing play. They take time and courage to develop and maintain. But in my experience, they are worth it in every way.
ABOUT THE AUTHOR
Strategic Business Consultant
Sales Growth and Client Retention
Ed has over 45 years of progressive growth in leadership responsibility at two Fortune 500 management services and hospitality companies: ServiceMaster and Aramark.
At both organizations he was regularly promoted based on his performance and was awarded several awards in both sales and operational roles.
As Vice President of Operations, Ed provided leadership for a hospitality team of over 500 people and an operating budget of over $60MM which he successfully renewed for five years. He has extensive experience in a multitude of business capacities including strategic account management, sales, and growth leadership.
As Vice President of Strategic Partnerships, Ed was responsible for cultivating professional relationships for the company’s largest healthcare clients in North America valued at over $350MM annually. In that role he assisted in the writing of a living Strategic Account Management Playbook.
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PARTNERSHIP OPTIMIZATION PROGRAM (POP): launching a new partnership or reviving an existing partnership.
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