Thursday, 13 August 2015

WHY YOUR ORGANIZATION MUST BE IN STRATEGIC PARTNERSHIP TO ACHIEVE WORLD CLASS STATUS

“Experience has taught me that any company that is not planning to be a world class one is planning to close down. The easiest way to be a world class company is to go into strategic partnership with a world class company.” ~ Chief Ugwokeh Nnaemeka, P.Geol

Yes, Tectono Business Review is aware that chief executive officers across many business sectors are of the opinion that strategic partnerships are essential for any company aspiring  to compete on a global scale and that new ideas and innovation are the lifeblood of today’s business world. It is very unfortunate that despite the increasing need to develop partner relationships, most enterprises lack the knowledge, connections and management capabilities to realise the full potential of partnering. Many companies lack the formal strategies and expertise to identify and nurture the most beneficial relationships. As a result, almost all are seeking new and better ways.

Tectono Business Review discovered that 42 per cent of companies are not satisfied with how well they leverage their partnership and alliance potential. While 85 per cent of companies view partnerships and alliances as essential or important to their businesses, only 33 per cent have formal partnering strategies, and almost half report failure rates of 60 per cent or higher.

These are the two most important benefits of strategic business partnership, according to Tectono Business Review:
Increased revenue, innovation and customer base
Acquiring customers and increasing revenues are seen as the primary benefits of partnering. Smart companies see partnerships as a way to acquire customers, drive revenue and enter new markets. The companies also rely on partners for new ideas, insights and expertise that can impact business performance, market understanding and product innovation. It also revealed that 40 per cent of businesses seek partnerships to reach new geographical markets or expand their online presence rather than focus on customers in their existing markets.

It facilitates business growth
Prominent chief executive officers have always cited strategic partnerships as their number-one growth strategy. Big companies today are making strategic partnerships a centerpiece of corporate strategy, committing more than 20 per cent of their assets to developing and managing partnerships. However, small to medium-sized firms are at a disadvantage because they do not have the domain expertise, business networks or management bandwidth to support the arduous and time-consuming process of identifying, cultivating and making the right partner connections – regardless of whether this is for revenue gain, new market access, product line extension, geographic expansion, customer access, domain knowledge, IP licensing or capital sourcing.

Most companies, including the 230 million that make up the global business market, do not have an effective, trusted online platform to automate business partnering, alliance building, and organic and inorganic growth. They continue to work within inefficient, tedious and expensive processes for research and outreach, along with hiring outside bankers and brokers to fulfill their expansion goals.

The next question now is how companies achieve partnerships. You will be amazed to know that only about 10 per cent of management feel they were extremely good at identifying, qualifying and securing partnership introductions. Some 60 per cent are focused on developing a strategy and targeted approach for sourcing alliance opportunities and building out contact networks.

The marketplace is evolving rapidly and companies need to look closely at their offerings and ask themselves if they are in the right business, if they are going to market in the right way and if they are doing that as effectively as they need in order to support and grow their client base. Companies are constantly changing in today’s marketplace. To be nimble and able to adapt to the market, you need to have a highly executable vision. And to achieve that vision, you need the right strategic alliances with a framework approach that supports it.

Improving relationship with partners
As a result of the high rate of failure discovered in most partnership, the role and value of strategic partnerships and alliances in contributing to corporate growth and development should not be ignored. The capacity to identify, qualify and secure the right introductions to relevant and valued partners and business opportunities is important. Challenges and complexities associated with selecting, closing and nurturing the right partnerships should be identified. So, reasons for partnership failure and how to manage and maintain relationships should be paid attention to.

Incidence of formal partnership strategies and how these are implemented, staffed and funded; intentions and plans to improve networking, partnering and sourcing of growth opportunities worldwide; channels, networks or resources that are being evaluated or used to advance business networking and relationship building. Variations in business partnership capability across industry sectors, cultures and company size; and internal systems or outsourced services that are helping to automate and optimise business partnerships and customer acquisition are areas of exploration and discovery.