I had been thinking of doing a post on the topic of business partnerships for some time now. About the nature of partnerships, alliances, coalitions; the strategic or tactical nature of the relationships that businesses form with vendors, customers and sometimes competitors. Then I saw this provocative tweet from @FailedCIO “Do you measure vendor management on how much you beat up the vendor? This eliminates the strategic element of relationship”.
This was quickly followed by spotting an article from @ronadner on the HBR Blog Network “A Sad Lesson in Collaborative Innovation” retelling Nokia’s struggles to harness innovation within their developer community having (inadvertently) applied hand-cuffs through its strategy of customising hardware to meet the needs of its customer base, which “had the unintended effect of imposing high customization costs on would-be developers”.
I started to think about why some partnerships work and others clearly do not. Reflecting on my own experiences within IT consultancy service companies and outsourcing organisations, I considered the factors that lead to some relationships being successful and others not.
Firstly, some definitions for some of the terms frequently applied to business relationships that are meant to convey something more than a purely transactional supplier-customer interaction: -
Partnership - while intended as a more formal and legal interpretation, businessdictionary.com defines a partnership as – “A type of business organization in which two or more individuals pool money, skills, and other resources, and share profit and loss in accordance with terms of the partnership agreement.”
Alliance - courtesy of wikipedia.org – an “alliance is a relationship between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent organizations.”
Coalition – “a temporary alliance of distinct parties, persons, or states for joint action.. for some temporary or specific reason”. Coalition is also used in the context of nature, e.g. “when a group of male lions band together to drive off and replace the male lions in a pride in order to mate with the females and protect the resulting offspring.” (source thefreedictionary.com)
Continuing this parallel to the natural world – mutually beneficial relationships in nature are highlighted brilliantly by “Carnivorous Plants Eat Ant Poop” featured by @WiredUK. Scientific research from University Montpellier has shown the intimate and unusual “symbiotic relationship between a carnivorous plant and a species of ant, where the ants living in the plant fight off enemies and feed it with their faeces.” [in return for shelter].
There are many examples of symbiotic relationships in nature and many of them, on the face of it, look like potential suicide. Would you step into the mouth of a crocodile to get your dinner? You might be more inclined if you understood the mutual benefit from each others’ actions and trusted that the other party did too.
Further explanation of the biological basis for these relationships in nature is provided by my friend and colleague Dr Phil Richardson (@thoughtcrew). In his insightful paper “Symbiosis: Natural Partnering”, Phil describes the spectrum of symbiotic relationships that exist in nature:
- Mutualism – both organisms need and benefit from the relationship
- Commensalism – using another organism to gain advantage without harming that organism
- Neutralism – no real benefit
- Parasitism – the host is eventually killed or is damaged in some way
- Competition – both lose out as a result of the relationship
- Antibiosis – creates a hostile environment for all other organisms
Phil goes on to outline frameworks that can be used to analyse existing business relationships and develop plans to improve or further their success.
Perhaps more than ever, partnering and managing relationships with third-party organisations is critical to business success, and press releases announcing the signing of new partnering agreements are increasingly common-place. And yet, too often they develop into one-sided relationships that benefit one party more greatly than the others or become neutral, empty statements of intent that derive no real benefit for any of the parties involved.
Why is this? It may be a lack of clear, shared purpose for the embarking on the relationship in the first place. It may even be the unfortunate result of the underlying values of some businesses and human beings, looking for ways to exploit the networks that surround them for their own gain. It can also be explained by a lack of capability in organisations to plan partnerships in a structured manner and to pay as much attention to the skills required to develop, manage and sustain these relationships, as much as the nature of the relationship itself.
With this in mind the British Standards Institute (BSi) developed BS 11000 Collaborative Business Relationship Management systems. BS 11000 provides a framework to help companies develop and manage their interactions with other organisations for mutual benefit. The standard offers an eight stage approach to enable organisations of all sizes to apply best practice principles to managing business relationships. BS 11000 highlights the key elements for success, provides a common life-cycle based route map and can be used to create a measurable platform to monitor progress.
There is no doubt that the terms Partnership, Alliance and Coalition are often used loosely, and interchangeably, to describe a whole variety of business relationships. They are liberally prefixed with “strategic”, often without real thought to what this means, in an attempt to try to convey some inflated notion of their importance. Whether they are formally documented or not, business relationships can apply for sustained periods or just for the duration of a specific deal, after which the parties might revert to being active competitors – think of the lions!
What is consistent though is the notion of “specific purpose”, “investment” be it time, money, resources or knowledge, and “shared risk and reward”.
Fundamentally we need to think about “Why?” the relationship needs to exist and what creates the “win-win-win” between business partners and their customers – the “specific purpose”.
Organisations involved in these business relationships need to be prepared to invest and share risks and rewards – the downside as well as the upside.
Businesses need to manage their own internal capability to design and manage business relationships.
Combining analytical frameworks based on natural analogies with a structured implementation approach such as that offered by BS 11000, provides a logical basis for analysing, describing, establishing and sustaining business relationships.
However, it is only by addressing the behaviour of those involved in the relationship – creating a common sense of purpose; trust and commitment, that business relationships will truly be successful.
And, sometimes, you might just need to trust that you won’t get eaten or be grateful for someone-else’s “poop” as part of the deal!



