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Why partnering?

The right reason to form a partnership is to increase sales or decrease costs. So will you recalculate the spreadsheet model of your financial projections if the partnership happens? If not, then the partnership is doomed. If you can’t quantify the partnership, then you don’t have one.


Make execution dependent on deliverables and objectives such as additional revenues, lower costs, penetration of new markets, and new products and services. The only way to determine whether a partnership is working is to answer quantifiable questions such as, “How many more downloads of software occurred because our two web sites are now linked?”

Ensure that your staff like the deal. The key is that the staff of both organizations like the partnership–after all, they will be implementing it. Indeed, the best partnerships occur when staff of both companies work together and wake up one day with a de-facto partnership that didn’t involve top management until it was done.

Make sure you appoint internal champions. Long after excitement of the announcements, one person inside each organization must remain the champion of the partnership.”

Use partnership to leverage your strengths; don’t use it to address your weaknesses. Companies form most partnerships to hide their respective weaknesses and it doesn’t work.

Always look for the win-win. A partnership seldom takes place between equals. As a result, the more powerful side is tempted to squeeze the other party. The weaker side, for its part, will begrudgingly accept such deals and try to get what it can. Bad idea. Bad karma. Bad practicality. If the partnership is a win-lose deal, it will blow up. Only mutually beneficial results can.

No matter how great the deal looks, put in an “out” clause so that both parties may terminate the partnership relatively easily. This may seem counter intuitive, but if companies know that they can get out of something, they’ll work harder to make it successful. Frankly, if all that’s holding the partnership together is a legal document, it’s probably not going to work anyway.

Don’t get lawyers involved too soon. Wait until agreed on the deal terms.. If you start the drafting process too early, you’re asking for nit-picking delays and blowups and you will kill the process. The best way to deal with lawyers is to simply say to them: “This is what I want to do. Now keep us out of jail as we do it.”

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