A recent study involving more than 200 organisations by Channel Dynamics has highlighted some of the key reasons why so many business partnerships fail. The results may come as no great surprise to any of you who have been responsible for recruiting, developing and managing partners for your own organisation...
My own interpretation is that many of these failing partnerships never passed the "what's in it for me" test for all involved - or were based on such an asymmetry of power between the participants that a balanced relationship was never on the cards.
It's hardly surprising, therefore, that the survey found that Accenture, BT and IBM were rated amongst the most difficult organisations to form productive alliances with. Those who have been through the experience often equate it to having root canal work done, or hitting your head repeatedly against a wall.
But what are the more generic reasons why so many partnerships fail?
5 Top Reasons B2B Partnerships Fail
- Reason number one - mentioned by more than half of the respondents - was differing business priorities. Which is all well and good, but leaves one wondering why the organisations saw fit to try and partner in the first place, or why someone didn't spot the issue before an immense amount of energy and emotion had been invested in a doomed relationship
- The second reason quoted - and one that will resonate with anyone who has had to manage a partner relationship on a day-to-day basis - was conficting sales incentives and behaviour. You don't have to pay an industrial psychologist to be told that compensation drives behaviour - so we shouldn't be surprised that poorly aligned incentives result in destructive field level behaviour
- The third reason? Lack of effective joint management structures. Many partnerships fail, not because they were bad in principle, but because they are poorly managed at the field interaction level. The hard work only begins when the contract has been signed - but the foundations need to be established way before that point
- Next, one partner attempts to dominate the other. Whilst it might seem attractive to play a game of "follow the leader", asymmetric partnerships are doomed to fail or fall into disrepair sooner or later. This doesn't mean that alliance ecosystems can't have an apex predator (a good subject for another blog), but all parties need to believe that their contributions are broadly balanced by the benefits they receive
- Finally, inadequate senior management sponsorship. It's true for internal company projects, so it's likely to be even more true for inter-company relationships: management has to show leadership - and and be prepared to step in and resolve show-stopping issues
So many partnerships struggle that you wonder whether the effort is worth it in the first place. My conclusion is that many partnerships are poorly founded and weakly implemented, and that in many cases the energy and resources would have been better spent elsewhere.
Start With The End in Mind
So my first recommendation is that organisations pause to reflect and carefully consider which partnerships and alliances they really need, what a good partnership really looks like, what's in it for all parties concerned, and whether they are prepared to invest the resources necessary to make them work.
Do a Few Things Well
The second: as with all successful business initiatives, resolve to do a few things well. Better a few effective partnerships than a page full of impressive but otherwise completely irrelevant logos on the partner page of your website.
So let me leave you with a couple of questions: how many of your current partnerships are truly productive? - and how much time, effort and emotion have you wasted over the years on ones that weren't?