In advance of my upcoming participation on the “Art of the M&A Deal” panel during U.S. Black Chambers, Inc. 2019 National Conference, I’ve revisited one of my most relevant books, Strategic Partnerships: An Entrepreneur’s Guide to Joint Ventures and Alliances.
Over the past two years alone, more than an estimated 20,000 corporate alliances have been formed worldwide.
Such strategic alliances can provide business owners with long-term security, new revenue channels, and, often, the anchor needed to maintain stability in otherwise turbulent waters.
A successful joint venture can open the door to a world of future partnership opportunities. In this book, I highlight the many ways that business owners can use to conceive, develop, and execute such relationships between themselves and larger organizations in order to drive growth in impact, reach, and revenue.
I’ve extracted and condensed 5 essential lessons for any entrepreneur looking to build effective business alliances.
1. Leverage Your Emotions
In some aspects of life, we’ve been conditioned to believe that emotions are a weakness. In business, learning how to leverage the power of our emotions can actually be one of our greatest assets. When we find ourselves in stressful business situations, it’s important to be mentally resilient for our team but there is something special that occurs when we allow ourselves to experience healthy emotions. History is full of situations in which an extreme emotional reaction was exactly the catalyst for overwhelmingly impactful changes, from the American Civil Rights Movement to the historic scene of student protest in Tiananmen Square. This same model applies to your business; when you realize that the physical reality of your organization is in need of a major overhaul, sit with these feelings of dissatisfaction. Until there is an emotional reaction to environmental conditions, there will never be the same visceral hunger to innovate our way out of our current situation. It’s this desire for change that leads us to seek alliances and partnerships.*
*The Watch Out* Don’t allow your reflections to turn into rumination. What is the difference in this context? Reflection is taking a moment to check in with yourself; Where are you? Where do you want to be? What are you going to do about it? Rumination is simply focusing on the symptoms with no productive intention.
2. Your Present Does Not Define Your Future
Translation: Your dream must always be bigger than your present reality. If you allow yourself to be a slave to your present conditions, you commit two fatal errors of entrepreneurship. First, when you become complacent in your current station, you lose the desire to source and create new opportunities for growth. Second, if you allow the present conditions to serve as your truths, you begin to use them as excuses to why you can’t level up as an organization.
“We are too small to win that large contract” or “We don’t have the proper capitalization to compete on the next level”.
Let me be clear. I’m not saying that these sentiments are fundamentally invalid; I’m saying that they are not insurmountable. Many present obstacles can be overcome with the right strategic partnerships! Sometimes 1+1 doesn’t equal 2, but 10!
3. Allow Partners to ‘Do What They Do”
As we build partnerships, we must make sure to do the following:
Understand our partner’s skills and capabilities
Provide opportunities where they can excel and build their confidence
Provide partner enough space to discover the 'learning experience' of failure
Assure that 'calculated' failures are not fatal to your client or to your partnership.
In a nutshell: play to your strengths, give your partner the freedom to the the room to do the same. Don’t try to force them to fit into your mold but instead, find the ways in which their strengths compliment your weaknesses and vice versa.
4. Work Towards Shared Objectives, Independent of Distractions
One way we allow ourselves to be prematurely defeated is by focusing on distractions that hinder efficiency & effectiveness. When working in a partnership, you have to remember that some aspects of innovation, such as pivots and ‘slight’ modifications in the name of progress can no longer be exclusively evaluated against your organization in a vacuum. They will likely have some sort of impact on your partner organization and thus, on the partnership. When entering into a strategic partnership, it is imperative that you have a crystal-clear understanding of your mutual goals, objectives, and expectations. Leave no gray area or room for interpretation.
There are two main sources of distractions to keep an eye out for. The first, Internal Resistance, is when those on the team don’t share the commitment and vision for the partnership and create noise within the relationship. Second is External Resistance, where those on the outside don’t share the commitment and vision for the partnership attempt to undermine from the outside. These potential sources of interference have the same base solution. Executive commitment and honest communication around the vision, objective, and status of the relationship allows you to block out all of the noise that may attempt to distract you from the primary shared objectives.
5. Watch, Work, War (W3)
In a successful partnership, you must concurrently:
- Watch for Opportunity*
- Work to create and improve
- (War) aka Be willing to fight and defend (your partner/turf/relationship) at a moment’s notice.
*There is a difference between looking for opportunity and watching for opportunity. Looking is passive in nature;Watching is active. Looking is unemotional; Watching is emotional. Looking is limited in scope; Watching is unlimited in scope.
In conjunction with these 5 lessons, keep I mind that often times, opportunity, business, success, and business breakthroughs are shrouded in a fog and its form is often undefined. This cloudiness and lack of well-defined structure will make the weak hearted either give up or not try. Conversely, if you make the decision to commit to create opportunity where it may not presently exist, great things can happen. Growth thorough the leveraging of Strategic Partnerships, whether through a Merger/Acquisition or through a Joint Alliance will open new doors for your organization and allow you to reach new heights.
For more on my research into the habits of successful entrepreneurs and their uses of alliances and partnerships to drive growth, order your copy of Strategic Partnerships: An Entrepreneur’s Guide to Joint Ventures and Alliances today!
Has your organization leveraged Strategic Alliances in a unique or impactful way? What were some of the obstacles you encountered? The benefits? Comment Below!