The future of the leading companies depends on the following four things namely, functions, capabilities, channels and insights, that they can tap by working with others.
It has always been a critical strategy for businesses that have been in partnerships looking to grow in markets that are unfamiliar, tap new customer segments or selling products and services. They have also been notoriously tricky to make works. In today’s hyper-connected, hyper-competitive marketplace, partnerships have taken on even greater importance and complexity.
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Business to business and business to consumer companies are in a race to develop innovative user experiences and capture new sources of monetization as well as expand distribution. Leaders of the digital world are discovering that the future of the company does not just depends on what their companies do but also on the functions, channels, capabilities and insights that they can tap by partnering with others.
We have developed five key rules for successful partnership in today’s digital world through our work with leading companies and in thoughtful discussions with more than 300 senior leaders who attend regular forums conducted by Digital Services and Strategy.
Rule 1. Never plan alone
Companies cannot imagine their business for a digital world within their four walls. Partnerships are now essential to scaling investments, talents or other innovation-focused resources in case via joint ventures, strategic investments, acquisitions or ad hoc collaborations which are required to support new businesses, user experiences and products which are transformational. Most open source developments are relatively important. This stands in absolute contrast to traditional approaches to innovation.
Rule 2. Learn that no single company has a user preference or lock
Consumers are the targets that keep on moving. Companies must engage with others that have complementary information assets and at the same time they even need to realize that they don’t have all the data and insights for themselves. Partners are now imperative to build market and get an advantage through superior knowledge capital, and the new and normal high performing partnerships are fast becoming through robust information exchange.
Rule 3. Focus first on a great user experience rather than focusing on value exchange
Nowadays partnerships are built on trust or around creating new user experiences rather than just exchanging values between companies. Accepting this approach requires a human-centered design emphasis that pushes the partnership to solve a real user problem and they need to concentrate entirely on transactional benefits.
Rule 4. Attain the right balance between customization and scale
Creating a wide-ranging network of partnerships can be expensive because major partners will usually demand distinguished solutions that are unique to their needs. Acquiring a partnering methodology that associates maximum reach (scalability) with low-cost customization and which is something special for each partner is critical. Designing technology and tools such as software and apps development kits around specific partnership objectives can give your company a bigger and longer-term advantage.
Rule 5. Handle your partnership like your company
There is a reason that too many strategic partnerships cannot come close to achieving their intended results.
The reason can be that the partners might never dedicate the resources, ongoing commitment, and possession needed to drive significant impact. Achieving success with joint ventures or product development collaboration is hard work. It takes time and at the same time costs money. And it doesn’t happen instantly. To get it right, you have to run the company more like a true business firm and less like a deal.
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Partnerships cannot be understated because of the strategic importance it provides in reinventing approaches. If it’s not previously on every leadership team’s plan, it should be. The need to build capabilities for managing and delivering against these new partnership rules has never been greater as customers jump from experience to experience with increasing speed and traditional sources of scale and differentiation decline in value.