Telecom & Technology Consulting
When it comes to technology, success isn’t strictly determined by the products you create or the services you offer. Competitive advantage, and the profits that come with it, often stems from the strength of your business partnerships.
But developing a valuable alliance requires more than a handshake over coffee. Many estimates show that nearly 70% of strategic partnerships end in failure. That’s due to unrealistic expectations, misaligned objectives, and lack of precise communication.
Don’t let that glum analysis bring down your partnership enthusiasm. When you and your potential partners dial up the right agreement, each party receives exponential value compared to going at it alone.
The winning formula isn’t so complicated. Successful partnerships occur when each party genuinely looks out for the needs of each other. It’s not so much about money, but rather making sure that each partner gets what’s in their best interest.
That’s an important concept to remember, as tech companies traditionally see partnerships as a purely transaction-based relationship. “How much can we make on this deal?” Based on that attitude, there’s little or no value to the partnership other than the bottom line. With everything being boiled down into dollars, the relationships aren’t built to last. The partnership is based only on fulfilling contractual obligations.
This isn’t to admonish all transactional relationships; in some cases it’s the right approach. However, tech partnerships based on relationships tend to have longer-term rewards. Each party is inherently motivated to look for mutually beneficial solutions.
These are called relational contracts, where partners deliver skills, innovation, and technology to your organization. Accordingly, relational contracts shift from solely providing specific services and offerings to a relationship based on mutually desired outcomes.
And in order to form that type of bond, it’s essential to have solid communication and collaboration from day one of the relationship. That communication and collaboration determines shared goals, how value will be assessed, and formalizing the structure of how each party will perform their work
Most enterprises understand – at least intellectually – the value of collaborative solutions. “Value” means getting more than a basic exchange of one thing for another. As the relationship evolves, each partner gains new opportunities, be it with a specific partner or within the tech community as a whole.
At their best, these relationships spark both sides to determine which solutions are ideal, or how they can collaborate to solve a specific challenge. With this spirit, they never settle for homogenous, universal solutions; they understand that the right answer must be customized for the specific needs of each other.
None of these efforts are possible, however, without deep trust. And lets’ be real – even the most forward-thinking executives can have trust issues, given the often tooth-and-nail ethos that pervades the tech community. Lack of trust can directly impact productivity, employee turnover, and ultimately the quality of products and services.
Relational contracts foster trust, due precisely to the collaborative nature of relationship. Of course, both sides must bring an open and transparent perspective to table regarding what they seek to gain from the partnership. Trust does take time to develop, but genuine collaboration goes a long way towards forming it.
Some may claim that this type of agreement necessitates more upfront effort than a traditional contract. That may be true. But relational contracts end up providing greater return in the long run.
Technology companies, whether justified or not, have been heavily criticized for being solely focused on profits, the relationship (with customers and partners) be damned. The tide is turning to focusing on relationships instead. Because as tech leaders are noticing, there’s more long-term value in mutually beneficial agreements.
