In the business world, we come across multiple challenges and opportunities, often beyond our capabilities or focus areas – the main reason we look for partners, partners who are specialized in certain core functions. Hence, instead of addressing all the challenges in the business world within the organizations, commercial or government entities often partner with companies who are specialized in or focused on certain core services or products they bring to market. We might experience repeated statements "we could do it ourselves" from in-house departments when a business challenge is addressed with a partner. This is like a man stating, 'I can deliver my child on my own'. This does not mean that we should outsource all non-core functions. There are many examples of in-house projects which have produced great results.
How to choose the Right Partner?
Now let us analyse the factors to be considered while selecting the right partner.
- Partnership for purpose: The first point to consider while selecting the right partner is to have clarity on the purpose of the partnership. This includes understanding, defining, and documenting the area or scope of the partnership. From a project management perspective, this is related to scope management. The partnership is not open for all the purposes between the two companies. The partnership is to address a business requirement, where a company realizes that it requires a partner's help in addressing their weak area. Hence both entities should have clarity on the purpose or scope of engagement. The partnership is narrowed down to that area – this is where the life partnership differs in business partnerships.
- Identifying the potential partners: Once we have clarity on the scope or purpose of the partnership, we should search for potential partners and try to understand each other. This search is often similar to the life partner search. We should build a good understanding of the 'purpose' (not just the company) of the engagement before getting into a formal agreement. A good market analysis of the potential partners needs to be carried out at this stage. Beyond search on the web, this requires gathering information from our contacts with references
- Sharing the business requirements with the potential partners: Whether we are working on big tender projects or small projects - documenting and conveying the requirements to the partners is key in generating interest from both sides. This is a romantic affair. Partners will have interest in good reference projects with challenges once they understand the client is serious and have clarity on their requirements. Professionals work on projects not just for money. It is a passion for achieving something unique together. Hence it is important to share the requirements connecting it with business and strategy and generating interest to achieve a unique result together.
- Gathering the partner references and experience: This is another important step in which we validate the promises from a partner with their previous engagements and success stories. This is beyond a background check of a bridegroom. Analysing the previous similar projects to validate the domain expertise on the related scope or purpose is important. This domain expertise of partners in similar projects makes the clients' 'response to the market' faster. Otherwise, it ends up in spending a lot of time in KT (Knowledge Transfer) from client to vendor.
- Identifying the matching partner: This is a crucial step- and often confusing. Partner selection should be matching to the purpose as well as for the company. A short boy is not a match for a tall girl. In our daily life, we do not approach engineering architects for small civil maintenance work. Hence identifying the right size company for the purpose is important. The partner selection process should be considering the project size, cost, schedule, risk, etc. The financial strength of the partner to manage the project volume and cash flow is important at this stage. There are multiple parameters to be considered as in the case with life partner selection – in short, it is not the best partner but a perfectly matching partner for the purpose.
- Understating the focus area of the partner: This is correlated with the matching processes, however a bit different. Once we have a business requirement, either 'ongoing - operational' or 'temporary - project related' – understanding the focus area of the partner is important in the selecting process. In this era of specialization, understanding the core strength of the partner company is key in building the partnership. As explained earlier, one of the key reasons to partner is by understanding our weaknesses and realizing the need for special skills. Hence the preference should be given to those who are specialized in the area of scope or purpose we are looking for. Often, we end up meeting with companies who offer a wide range of products or services with little knowledge on the subject. Once we are clear about the requirements, it is important to partner with those who are focused on the subject area.
- Understanding the organizational hierarchy: It is important to understand the partner company's organizational hierarchy and power structure. You won't be able to get the best out of the partner company unless you know the decision-makers. Hence it is important to know the people, process, and reporting hierarchies within the partner company even before we engage with them.
- Scalability factor: Even after understanding the focus area and the decision-makers of the partner company, we must evaluate their current capabilities to deliver. Getting inputs from past references, current engagements, and the capability of the organization to scale as per client business needs is also important in selecting the right partner. One simple tool to check this is by evaluating when do they say "No". Do they promise for all our requirements or do they evaluate and reply No at times when they realize those are not achievable within the time frame.
- Trust and transparency: Once we decide on a partner, to get the best out of the partnership, the relationship should be strengthened with trust and transparency. I don't have to share examples here as we all experience successful couples around. In the business environment, as the partnership is for a scope or purpose, all correlated information should be shared promptly between the teams and the chemistry should develop as we progress with the project.
- Appreciation and acknowledgment: You all might have heard the 3As in couple relationships – Acceptance, Appreciation, and Acknowledgement. However, in a business relationship as well, appreciation and acknowledgment are important in building the partnership and achieving great results. For a vendor to accept the pitfalls in their delivery, and to make them agree to fix those pitfalls, the dialogue should be correlated with appreciation and acknowledgment – not just in words, but sincerely.