Up to 75% of partnerships are failing; it’s time to reassess the why.

It’s maybe a bold way to utilize the world’s largest IT failure for it; but I can easily imagine a corporation managing 70+ partnerships and then realizing nothing is working out.

It’s like this screen, imagine you wake up and start to work, and you’re computer is not working. You partners are giving up on you. They say they quit.

It’s time to debug the faulty system here; and re-asses the why.

The Disturbing Truthg: Partnerships are Failing

According to many sources; alliances for the majority – failing, but here is what I found:

According to a HBR article from 2007; we already knew the complexity of alliances “60% to 70% of alliances fail,” often due to insufficient attention to collaborative behavior and internal stakeholder management.

Strategic alliances and strategic partnerships are made to conserve financial capital, reduce risk, and leverage core competencies, among other motivations (Zajac, “The Promise of Strategic Alliances,” 2022).

Now, what partnerships are we talking about? I believe to bring everyone onto the same page, let’s focus on these two graphs.

However, as highlighted in Peter’s great graph, they differ in terms of complexity. A transaction such as a referral can be considered ‘easy,’ but strategic alliances are much more complex. Therefore, many initiatives and efforts have to be put in place to mitigate the risk

Common Pitfall in Partnerships

According to Edward J. Zajac’s presentation “The Promise of Strategic Alliances,” strategic alliances fail due to:

Environmental changes that partners fail to anticipate. (Market changes, wars, IT blackout like microsoft x Crowdstrike etc)
Poorly articulated strategies or misaligned strategic goals between partners.
Structural forms that are too complex, slow, expensive, or one-sided.
Behavioral issues such as ego clashes and personal dislikes.

More details about it

Culture Misfit: “Alliances involve interdependence between companies that may be competitors and may also have vastly different operating styles and cultures.” (Harvard Business Review Analytic Services. “Driving Innovation in Health Care through Strategic Partnerships.” 2021.)
Soft factors: As highlight in the article of Art Boni; “We highlight the ‘softer factors’ of the partnerships and collaborations that relate to the commonality of culture and vision of the partners and how they ‘fit’ into a working, collaborative partnership and/or M&A transaction…” (Boni, Arthur A. “The ‘Art of Collaborations’: Understanding the Anatomy of Transformative Transactions in Biopharma.” Journal of Commercial Biotechnology 25, no. 4 (2020): 50-56. doi:10.5912/jcb955.)
Lack of ressources: as the artcile from Phillips CEO is mentioning “Strategic partnerships are essential for health care providers, with 41% of health care leaders recognizing the need for such collaborations to implement digital health technologies effectively, though only 8% currently prioritize this investment. The report highlights that partnerships can drive innovation and operational efficiencies, such as Phoenix Children’s nearly doubling MRI throughput through collaboration with a global health tech company.” ((Harvard Business Review Analytic Services. “Driving Innovation in Health Care through Strategic Partnerships.” 2021.)
KPIs not properly set, and therefore. Partnership teams don’t hit quotas: “Only 35% saw 75%+ of their team hit quota, this is an industry standard for a healthy quota achievement.” John Doe (https://stateofpartnershipleaders.com/)
Lack of executive sponsor: “65% lack of awareness from top management, insufficient dedicated teams and resources, and bureaucratic hurdles.” ” (https://stateofpartnershipleaders.com/)

Now if you think about it; one of the major issues is that Partnerships is a bright term; and if not properly defined, and properly alining with your partnerships your achievable, realistic outcomes, the likehoood of failure will be high.

Proposed Solutions:

1. Process, Process, Process

2. INTERNAL STRATEGY FIRST ; what KPIs we want to achieve?

Among them:

Percentage increase in revenue attributable to the partnership
Number of new joint customers acquired per quarter
Customer retention rate for integrated solutions Percentage of integration projects completed on time
Increase in market share or geographic coverage
Number of leads generated from joint marketing campaigns
Number of new features or products developed
Customer satisfaction scores (CSAT) or Net Promoter Score (NPS)
Number of partners’ staff trained or certification completion rates
Average response time and resolution time for support tickets
Frequency of joint meetings, workshops, and collaboration sessions
Average lead time from customer sign-off to implementation completion
Reduction in operational costs or increased efficiency metrics

Know once top KPIs are selected.

5. Dedication of ressoures to execute the partnership

Once an internal strategy is aligned, it’s crucial to dedicate the necessary resources, secure executive endorsement, and equip the team with the right tools to effectively execute the partnership. Without proper data and reporting tools (Account mapping tools, CRMs, PRMs and more if needed); monitoring progress and measuring success becomes impossible.

4. IPP and Partner Selection

Establishing an Ideal Partner Profile (IPP) and careful partner selection are essential to ensure alignment of goals, values, and capabilities between parties, significantly enhancing the likelihood of a successful collaboration. Identifying the right partner and having a detailed profile helps mitigate risks, optimize resource allocation, and create a solid foundation for achieving mutual objectives.

For this; feel free to read https://nearbound.com/resources/nearbound-daily-504-use-the-value-chain-to-determine-your-ipp

5. Soft Skills

As mentioned above; Soft skills are crucial for the success of any partnership, as they facilitate effective communication, conflict resolution, and collaborative problem-solving. Building strong interpersonal relationships and fostering a culture of trust and empathy within the partnership can significantly enhance overall cooperation and productivity. Prioritizing soft skills development in your team can lead to more resilient and adaptable alliances.

That means, hire the right partnership professional!

As reported; by LinkedIn, “Head of Partnerships” is among the top 25 growing jobs in the US, in 2024.

Partnerships Head are very social; with the ability to orchestrate different business units. Select well.

Conclusion:

The blog shouldn’t be finished here; as the operational planning, partnership structure and terms are as crucial but I do believe that to reduce the failure rate; it’s so important to get first this internal clarify; the resources, and the right KPIs. At the end; the most important factor is trust. Do whatever is needed to establish trust between all partners involved.

For more; feel free to read my other blog posts and / or reach out to hello@mikelmangold.com