Building Strategic Partnerships – Trade & Construction Businesses
Strategic partnerships/alliances are a critical element to many trade & construction businesses. No business can do everything, so alliances become a powerful means of enriching the solutions and value you provide to your customers as well as improving your access to new markets and customers, and growing your own knowledge, capabilities, and future. You can also extend your core competencies through entering into relationships with organisations that have capabilities that complement yours.
Here are a few of the key benefits of strategic partnerships:
- It is mutually beneficial in that each partner can leverage the customers, contacts and partnerships of the other
- It spreads the marketing workload when it comes to mutual promotional efforts. They promote you to their customers and contacts and you promote them to yours
- Customers benefit from an expanded referral pool of trusted resources, strengthening your relationship with those customers.
Partnering seems to be the automatic answer to expanding sales, markets and growing a company, so how is it that the majority of partnerships and alliances fail to achieve their objectives? A common mistake occurs when vague agreements are made, especially in situations where financial commitments are not clearly established, specific commitments and accountability are not defined in detail, leading to false expectations. Other common mistakes include not defining the marketing support each firm will provide the other, or the training requirements for the sales, operations, and customer service teams.
Finding the right strategic partner is the same as building solid relationships in other areas of your business and life. You’ll be working closely together, so it’s important to have a good connection. Don’t be afraid to trust your gut. If your instincts tell you that something isn’t right, even when everything looks good, it’s smart to be cautious.
Based on experience, effective partnerships are a combination of the following factors:
- Shared Risk: Each partner bears a fair and appropriate share of the risk in the alliance. No partner has a disproportionate level of risk.
- Shared Resources: Each partner commits an appropriate proportion of the resources, whether they are capital, people, knowledge, technology or other.
- Shared Rewards: Each partner shares appropriately in the rewards, the partners work together to create mutual wins.
- Shared Vision: The partners share a common view of the objectives, results and outcomes of the alliance. They share a common vision of the importance of the relationship.
- Shared Values: They share common value systems and complementary cultures. This shared value system is the bedrock of the relationship, providing the means, motivation and commitment to resolve problems with the relationship and growing the relationship.
Ensure both parties are committed to the overall success of the partnership and key objectives and the tasks required to reach them are detailed. Establish a pattern of meeting regularly to keep each other updated on progress, to discuss any roadblocks and to create any new objectives to keep both parties on track for great results.