Note to Readers: This is the second of two parts on how to leverage partnerships as a business strategy in the dynamic IoT market. This part lays out ten best practices for partnering – from forming partnerships to managing partnerships successfully. These best practices are applicable for companies in early stage dynamic growth markets. Part 1, which describes the various partnership models, can be found here.
Best Practice #1 – Find and create joint value.
Successful and long lasting partnerships are built on the core of one or more strong joint value propositions. When considering potential partners, evaluate what each company gets from the partnership, and how these fit within each other’s overall strategy, capabilities, resources and offerings. Understand and quantify the extent of the value provided to the solution, the channel, and the customer. Avoid “one way” partnerships – focus instead on creating a “two-way” fit in as many areas as possible – from development, go-to-market and support.
Best Practice #2 – Define and prioritize specific partnership outcomes upfront.
Partnerships give IoT vendors key advantages – speed, capabilities, resources and credibility. Unfortunately, many partnerships don’t live up to their potential, delivering only a small part of what was envisioned. Other partnerships turn into “Barney” relationships in which both sides say “I love you, you love me” but nothing ever gets done.
In the dynamic IoT market, speed is of the essence. It is critical to define specific outcomes, deliverables and milestones before the partnership is formally executed. This one task then drives and secures the commitment, the priorities and resource allocations necessary to make the partnership work. If the companies are unable to agree or commit to specific things upfront, then there is no partnership.
Best Practice #3 – Plan ahead for changes in the partnership.
As the IoT market and ecosystems evolve, so will the partnerships. The nature of the changes in the market will drive how the partnerships are affected. Some partnerships will go away, while others need to be rescoped. For example, IoT connectivity technologies may coalesce around a certain standard, which will render some partnerships obsolete. In other cases, as IoT platforms expand to manage edge devices, analytics solutions providers will need to expand partnerships with edge device manufacturers.
Plan for changes in the partnership by reviewing the partnership programs on a quarterly basis. Update and adjust the partnership types, relationships and scope. Revisit the specified outcomes and priorities to determine what changes are necessary. When creating partnership agreements, specify how changes to the original partnership, including terminations, are handled. Avoiding overcommitting and locking into a partnership arrangement that is hard to extract from.
Best Practice #4 – Strive for quality of partnerships, not quantity.
It is critical for companies to partner selectively and not over-partner. It’s more important to commit to a small number of partnerships with strong joint value and get things done, than a large number of partnerships that drain valuable resources and accomplish nothing. Many times, smaller companies want to partner with more established companies because it provides them with fast credibility. But unless there is real two way value in the partnership, it is best to avoid those and focus on the few partners that can help advance the business.
Best Practice #5 – Drive accountability across all levels.
Partnerships are often crafted at the executive levels, but left to the field or working levels to implement. In the fast moving IoT market where changes happen in days and weeks, instead of months and years, it is critical that all levels are equally invested and accountable for the success of the partnership. Partnership relationship managers, on both sides, are accountable for the overall management and execution of the partnership. Executives are responsible for continuously reviewing, prioritizing and committing to the partnerships. At the execution levels, managers are accountable for staffing, prioritizing and implementing the partnership outcomes and goals. This accountability is connected across all levels, from top down, to ensure partnership success.
Best Practice #6 – Break the ice by prioritizing new markets and opportunities.
Partnerships often move slowly in the field initially, because the sales teams are reluctant to engage. They don’t want to disrupt current deals by confusing their customers. In addition, they have not yet established a working relationship with their counterparts and are learning to trust each other. One good ice-breaker strategy is to prioritize the pursuit new opportunities that neither side is currently in. This allows the field teams to work together on a “clean sheet” account in a “safe” environment, without being held back by personal interests.
Best Practice #7 – Build and maintain relationships at all levels.
Joint value is what brings partners together. But good relationships are the glue that holds the partnerships together on a day to day level. Mistrust, personal conflicts and self-interest will render the most strategic of partnerships ineffective. Good relationships can get things done, and done faster. Good relationships can make regular partnerships act like strategic partnerships. One key “must do” is to staff people with strong interpersonal, influence, and relationship building skills in critical partner management and liaison roles on both sides.
Best Practice #8 – Align your solution releases with each other.
Partners with IoT solutions that integrate with each other must align their roadmaps so that compatible products and upgrades are released concurrently. When the solutions are released out of sequence, customers will experience system compatibility issues. This ultimately results in system integrators and customers who refuse to upgrade their solutions to the latest version because they are afraid it will “break” something else.
Best Practice #9 – Continuously invest in the partnership.
It is easy to become complacent once the partnership is signed or when the partnership is producing. In order for the partnership to remain effective and productive on a consistent basis, management on both sides must continuously invest in the partnership. This can be in the form of adding more resources to the partnership, developing more solutions together, pursuing new markets jointly, or rotating in top talent into the partnerships.
Best Practice #10 – Develop “Ecosystems Thinking”.
As new use cases emerge and IoT ecosystems continue to evolve, solutions vendors must look beyond their corporate boundaries to be successful. Whether they like it or not, their success depends on the success of their partners and the ecosystem. They must design for their partners and the ecosystem as much as their own needs. Successful vendors are ecosystems architects, not just solutions providers. This is by training executive and managers to become “systems thinkers”, developing product managers and engineers into systems engineers, and incorporating systems engineering methodologies into their product development programs.
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