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Why examine partnerships?
Why am I writing this? Why should you read it?
Every company that sells a product faces the same question as they seek to grow: should we build, buy or partner? Much has been written about how to build great products, especially with the rise of Product Managers over the last 20 years. And thanks to the merger madness of the 1980s, there are thick textbooks and graduate-level courses on how to acquire companies. But very little has been written about how to partner. And yet partnerships are a critical lever for a high-performing company pursuing growth. This for That will set out to change that by exploring answers to questions like:
when should we partner (versus build or buy)?
what are the necessary ingredients for a great partnership?
who in our organization should lead partnerships?
how should we evaluate the success of a partnership?
But why explore partnerships? Because partnerships shape business outcomes. Transformative partnerships are hard to pull off. And partnerships are largely overlooked.
Partnerships shape outcomes.
Partnerships can fundamentally alter a company’s trajectory. Google’s rise seems obvious today but it was not as clear in 2000 when they had just 75 employees. That year Google had just 1% of the search market when they secured a deal to power AOL’s search engine. Even Google’s leadership was unsure about their ability to deliver on the terms of the agreement. “The AOL deal was a really big bet for our company. We thought it might bankrupt us. I don’t know what would have happened if we hadn’t won that AOL deal,” Google’s co-founder Sergey Brin told John Battelle.
“Do you notice anything about this parade?” Disney’s CEO Bob Iger asked his CFO in 2005 at the opening of Disneyland Hong Kong. “There are barely any Disney characters from the last ten years.” Iger was face-to-face with the reality that Disney’s partner — Pixar — was generating more hits than Disney’s own animation group, which had once been Disney’s cash cow. Pixar blockbusters like Toy Story 2, Finding Nemo and The Incredibles generated profits for Disney while its own animation group was losing money. The partnership with Pixar arguably saved Disney. And as a result, Disney ultimately acquired Pixar for $7.4B in 2006.
Beyond Google and Disney, partnerships transformed consumer companies like Apple, Lego and Target and have been critical to the growth of enterprise companies like Microsoft and Square.
Transformative partnerships are hard to pull off.
Have you ever been in a relationship? Then you know how difficult it can be to align two people around a shared goal. Have you ever worked in an organization or led a team? Well, then you understand how hard it can be to get a group of people to work together towards a common goal. A corporate partnership is essentially two organizations – dozens, hundreds or thousands of people – working together to pursue a shared goal. Different teams need to join forces for the partnership to work. A single skeptical leader or unwilling group can cause a carefully designed partnership to crumble. Even when successful, most partnerships are fleeting.
Partnerships are largely overlooked.
Even the most basic question — who leads partnerships? — is often loosely defined. In many organizations, the answer is everyone — and no one specifically. The Chief Product Officer learns about a valuable integration partner over dinner with investors. Then the VP of Sales finds a customer willing to help incubate a new product. Next the CMO returns from a conference raving about a new channel partner. Suddenly, multiple teams are signing partnership agreements with dependencies across the organization. And yet the company lacks a cohesive approach for how to identify, evaluate, execute and maintain partnerships. There is no process for securing buy-in across functional leads. No consistent way to ensure that deals minimize risk and maximize ROI. This is a common reason that partnerships fail. Like most anything in life, you get out what you put in. And many organizations do not prioritize creating and maintaining the systems needed to support transformative partnerships.
What you’ll find here: perspectives on partnerships
This for That (TfT) will examine partnerships as a craft. My aim is to highlight stories, perspectives and useful tips that are actionable for readers based on a few basic principles:
Partnerships are critical to companies large and small.
Insights on partnerships are valuable across job functions, sectors and geographies.
Unrelated domains (e.g. science, sports, government) can help illuminate useful lessons.
Stories and conversations are some of the best ways for us to consume, digest and retain information.
Diverse perspectives are key to uncovering the truth and a virtual conversation where different voices contribute and (respectfully) challenge each other is the true potential of this medium.