“Partnerships Don’t Work”

That may not be what you’d expect from someone who builds partnerships for a living, so stick with me as I explain.

We’re all familiar with the dreadful statistics about acquisitions and how the large majority of them fail to deliver the promised results. The reasons are many, and we could easily spend several posts on the subject. I haven’t seen similar stats on partnerships, but they are probably just as bleak.

A funny term popped up in the 90s called “Barney announcements” based on so-called “partnerships” that began and ended with a press release whose message echoed Barney – “I love you, you love me” – but with no real substance.  During the runup to the internet gold rush, this type of announcement was all too common.

Many CEOs feel like they’ve been burned by partnering. They’ve gotten behind a proposed partnership, even passing up other opportunities to put resources into it. After the partnership produces a Barney announcement and ultimately fails to produce – greater revenue, more market visibility, access to customers, or whatever was promised – the CEO forms a bad opinion of partnerships in general.

So why is it that so many partnerships fail? The most common reason is that the people pushing the partnership don’t do the hard work and planning required for success. Either they don’t understand the process, or they are unwilling to invest the time and effort needed to create a productive partnership. Gaining an understanding of all the interests of the parties takes time, and if partnerships are an afterthought, the time just isn’t there to maximize the chances for success.

The nicest thing about not planning is that failure comes as a complete surprise, rather than being preceded by a period of worry and depression.

– The late Sir John Harvey-Jones, Former CEO of Imperial Chemical Industries

About Bob Barker
Bob Barker is a trusted advisor to CEOs, helping them identify, define, and execute new growth-accelerating opportunities. He also shares ideas on LinkedIn (robertgbarker), in guest posts on related blogs, and in industry publications. Contact him via email at bob@2020outlook.com.

Comments

3 Responses to ““Partnerships Don’t Work””
  1. John King says:

    Well stated. I did experience a productive partnership, but to ensure success we had dedicated staff within each partner who were accountable for given strategic and tactical objectives. Given the current economic climate, I suggest many organizations are unwilling to make that size of investment.

    I also suggest some less-scrupulous organizations may make Barney announcements soley for the short-term impact of press coverage and market perception – a kind of a “let’s run it up the flagpole and see if anyone salutes” strategy to limit costs until the true ROI is understood.

  2. Jim Altfeld says:

    Back in the very early 80’s I owned and operated an industrial auctioneering company in Los Angeles, Ca. The vast majority of the businesses I auctioned off were partnerships gone awry. I interviewed each and every one of them. The primary reason for the failure was a major lack of preparation, a lack of equal commitment, and a lack of understanding the word Bootstrap! And for those partnerships that do make it off the ground, they seldom if ever seem to have an exit plan which then creates a myriad of major problems when one or both want out. Should anyone one consider a business partnership, go in understanding that it is more difficult than a marriage and you damn well better do your due diligence before signing any papers.

  3. Bob Barker says:

    Thanks to both John and Jim for sharing your insights! It’s obvious you’ve both “been there, done that” and understand what it takes to build successful partnerships. I’m going to be posting additional comments about how to best position to grow a company’s valuation through partnerships and will be seeking feedback.