It’s essential to identify elements that will help create a successful strategic partnership before signing the dotted line. A solid business partnership allows small companies to source additional resources, be it talent or finances, propelling them towards significant revenue growth.
That’s because strategic alliances, even a temporary joint venture, can prompt innovation and increase your customer base. Small businesses can particularly benefit from a collaboration or acquisition by a more prominent firm.
Mergers open up access to intellectual property and new technologies for product development and new markets for the new products. This article examines four due diligence tips an entrepreneur can follow to implement a successful partnership.
1. Identify shared vision, values, and Principles
When creating long-term mergers, identifying shared vision, values, and principles minimizes friction. A written vision statement provides a guide for all parties to refer to from time to time. Take it as a source of guidance on how to interact and collaborate.
As two separate companies, you will have different opinions on running things. However, having a set of common values acts as guidance for approaching new ideas to achieve objectives.
After identifying shared vision and values, it’s essential to have an agreement. Something formal protects the alliance and individual entities in times of conflict. It is an effective tool to help partner organizations get back on track.
Additionally, the process of identifying values and principles should include a shared work ethic. That way, you know what pace to adopt when interacting with customers and stakeholders.
2. Establish Joint Objectives and Goals
Establishing a list of joint objectives and goals reflecting the needs of both parties is essential for brand growth. Moreover, it’s necessary to take a realistic approach when creating goals and objectives.
Common goals and objectives should fall within the expertise and capabilities of either partner to make them achievable short term.
Additionally, it’s essential to leave room for adjustments with changing times when creating these joint objectives.
Scheduling regular meetings to review the assignments for each party towards the goals achievements is essential. Both parties have to put an equal effort and get similar benefits from the partnership. The objectives and goals should be measurable to monitor their progress.
You can use digital signage to chart and monitor the goals achievement progress, timelines, and metrics. Utilize the vivid displays to create graphs showing how you cater to the target market and customer needs.
Demonstrate how you are leveraging the merger to find better deals from suppliers, distributors, manufacturers, and other participants.
3. Cultivate a Culture of Honesty, Transparency, and Communication
Integrity goes a long way in ensuring partnerships last. Achieving long-term goals in partnerships requires frequent communication and transparency. Honesty within a partnership about resources and shortcomings ensures partners complement each other.
If you have doubts about whether you made the right decision, transparency helps express your doubts or optimism. In addition, communication about the good and the bad needs to remain open for trust to develop.
Honesty, transparency, and communication may not always give you what you want. Still, it’s essential to remain respectful of your partner’s feedback.
Dishonesty and lack of transparency are major causes of breaking up promising partnerships. Transparency about financial transactions is crucial to ensure fairness.
Therefore, before going into an alliance, take time to weigh in on how transparent you want to be. If you conclude that you cannot be forthright with your partner, reconsider the partnership.
4. Develop Conflict Resolution
Once you create a strategic partnership, it’s also essential to develop conflict resolution systems. The system should provide guidance and common ground for disagreements. Agreeing to disagree on various factors is almost inevitable, and it rarely fosters the partnership.
However, conflict resolution should be hasty so that you get back to focusing on brand and product development. The last thing you want is conflict to affect the partnership and compromise the expected returns.
Further, conflict resolution is more straightforward when parties have a safe space within the partnership to express themselves. When setting up a conflict resolution system, it should focus on finding solutions rather than laying blame.
Moreover, it should be flexible to accommodate breakups. You are on your way to success once you work out the characteristics of a functional conflict resolution system. Here are some features that your system should have:
- Impartiality
- Attacks the problem directly
- Creates safe space for communication and expression
- Future-oriented
- Innovative
- Has an exit strategy in place
- Flexibility
Final Words – Creating Strategic Mergers
Finding business partnerships that last can be a golden opportunity. Going into a merger knowing what it takes to make it thrive should be your goal. It helps to evaluate your potential partner thoroughly before putting ink to paper.
Once you do, cultivate a culture of honesty, establish common goals and objectives, and create dispute resolution systems. That is the winning formula for developing strategic partnerships.
