In-Depth

Building a Lasting Partnership

Partnerships can be powerful, and powerfully tricky. Follow these simple steps to put yours on a solid foundation. 

• By Lee Pender
• April 01, 2006

Bill Breslin understands the power of partnership. The sales director for a mid-size service provider and Microsoft Gold Certified Partner was just about to enjoy a Hootie & the Blowfish concert at a recent Microsoft Worldwide Partner Conference when he received an urgent call: a client's Exchange server was down. It was 6 p.m. on a Friday, and his Exchange experts were unavailable. Just then, a partner Breslin was having dinner with piped up.

"The smallest partner at the table said, ‘I think I can help you,'" says Breslin, of Houston-based Insource Technology Corp. and president of the International Association of Microsoft Certified Partners. "By the time the concert ended two hours later, they had rebuilt the server."

Breslin's experience illustrates how partners can help each other keep clients satisfied and businesses running smoothly. In the IT industry, partnerships have played a critical role in helping companies maintain and build empires.

But most of the time, partnership is neither simple nor straightforward. It can be fraught with risks and potential problems. Partnering can be a powerful and necessary business tool, but companies need to follow a few basic, critical steps to make partnerships succeed.

1. Set Mutually Beneficial Goals
Companies seek partners to provide their clients with a product or service that they do not offer. Companies can partner to co-develop unique offerings or keep larger, wealthier competitors at bay.

But partnerships have to live up to their name. Matches that benefit one partner far more than the other can have disastrous consequences for the second-place side -- companies that dump resources into an unfruitful relationship can find themselves wasting time and money and losing clients. At the same time, a company realizing the vast majority of the benefit from a partnership could quickly find its partner ending the relationship, eliminating the advantage the company sought by partnering in the first place.

"If there's a partnership by which one party stands to gain 90 percent of the advantage, they have to wonder if it's not something which would be beneficial enough and require too many resources of the partner that's not getting anything," says Carlson Colomb, director of business development at LPI Level Platforms Inc., a Gold Certified Partner based in Ottawa.

One way to avoid that situation, says Matt Pease, Microsoft vice president for the Western region, is to set specific goals at the relationship's outset that will ensure mutual benefit.

"They can be sales goals, goals relative to business development or marketing," Pease says. "They can be goals relative to competencies. There's got to be a foundation to build the partnership on."

2. Make a Cultural Connection
Simply finding equilibrium of benefit, though, is not enough to guarantee a successful partnership. Analyzing a partner's corporate culture, as well as your own, to assure a match is a critical step in finding the right partner.

"Many partnerships fail because the two corporate partners don't have in common what they think they have in common," says Edward O'Connor, managing partner of consultancy Exertus Partners in New Haven, Conn., and co-author of the book Partnering With Microsoft: How to Make Money in Trusted Partnership with the Global Software Powerhouse (CMP Books, 2005). "Some corporate cultures are driven by voice, others by e-mail. We speak the same language, but words don't always have the same meaning."

Determining cultural compatibility, though, is not as simple as is comparing products and services and setting concrete goals. This is a soft-skills area in which those responsible for forging partnerships must rely on their judgment.

"A lot of times you do have to go by your gut instinct," says Dean Bickmore, sales associate at Tulsa-based services firm SilverTree Technology Corp., a Gold Certified Partner. "Everyone gives you cues -- if they're talking more about their business and less about the customer, you kind of get the feeling that it's all about them. I'm not giving any of my customers out to anyone until I know that [a partner] has the same type of atmosphere that I have or the same type of commitment."

A Tale of Two Partnerships Perhaps the best known and most important partnership in the history of the IT industry is the famous Wintel alliance between Microsoft and Intel. Although the duopoly has had its ups and downs, it has remained an industry juggernaut for nearly two decades. It is, in many ways, a model partnership. It was also Wintel that led two other industry titans to partner unsuccessfully, as noted by Edward O'Connor and co-author Ted Dinsmore in their book. In the early 1990s, IBM and Apple formed two organizations aimed at knocking Microsoft off of its operating-system perch. Kaleida Labs was created in 1991 to develop the Script-X multimedia programming language. The oil-and-water cultures of the two very different companies soon clashed, and the technology found few takers. "Almost from the start, engineers had haggled over job responsibilities, and board members were distracted by more important jobs," BusinessWeek reported in December 1995. Four years after its opening, Kaleida Labs closed. The companies' other joint effort, Taligent, met with similar results. By 1995, IBM had folded Taligent into itself as a subsidiary. The technologies born from IBM and Apple's ill-fated joint efforts failed to make a serious dent in the Wintel machine. -- L.P.

3. Start with Baby Steps
Once companies have established competitive and cultural commonalities, they can begin to move forward with a partnership. Jumping in head-first, however, could be risky. A more prudent way to develop a relationship with a long-term partner is to start off slowly and let the relationship grow.

"What I recommend is to take baby steps," Colomb says. "You can begin in terms of forming a relationship whereby you will refer companies to each other. Slowly associate yourself more with an organization as you discover that your businesses are aligned. If the partnership is one which is going to last, it will evolve, and you will have an extremely close relationship."

But let that evolution happen gradually. Companies that put too much faith in a partner too quickly could find themselves hurting their own businesses. After a bad experience, customers are more likely to react negatively toward the company with which they already have a relationship rather than toward the partner that botched a job.

"You can lose a lot of customers," Bickmore says. "It only takes burning the bridge one time and that customer's going to say, ‘I don't want you here anymore.' We'll give [partners] leads that are nowhere near our best customers, but it's a way to evaluate them. I'm going to call that customer back and find out how they did."

That is not to say, however, that companies should fear commitment once a partnership starts to click. In fact, the opposite is true: trusted partners should be like best friends -- reliable, honest and always willing to lend a hand. Companies, especially smaller firms, should not be afraid to partner with competitors to resolve gaps in service or solution coverage, or respond to emergencies. Regional alliances can often come in very handy for smaller firms, even among competitors.

"I've reached a point here in Houston with some of my competitors that I call one and say, ‘Can I borrow your Active Directory guy?'" Breslin says. The competitor's employee then does the job as if he worked for Breslin's firm. "[The competitor] makes a little less money and I make a little less money, but we've got a happy client down the road."

Microsoft's Pease agrees. "Most partners don't do everything that a customer needs from an IT standpoint. The customer sometimes wants a broader solution. Partners that partner with other partners to provide a complete solution can be quite successful. Partners that avoid that [type of collaboration] limit themselves and sometimes miss opportunities."

4. Communicate Often and Clearly
Partnerships built on solid foundations can succeed at the outset, but maintaining a successful relationship requires as much work as establishing one. Undoubtedly the most critical aspect of a mutually beneficial long-term partnership is proactive communication on the part of both parties.

"Partnerships often fail due to lack of communication and therefore lack of collaboration," O'Connor says. "If you can't talk with your business partner, you won't be able to interact with your business partner."

Strategies for keeping communication open include the simple -- regularly scheduled meetings, emergency availability, even the odd social outing. But O'Connor says there is a more subtle strategy for making sure partners are on the same page.

"Put like people with like people," he says. "Don't put a sales guy in charge of talking with a tech guy and hope for good results. You have two people with a higher probability of speaking the same language about the same thing."

Speaking is not all there is too it, though. Partners should listen to each other as closely as they listen to their customers.

"I think it has to do with active listening," Bickmore says. "A lot of the time, when I'm with a customer, to make sure we're on the same page, I will repeat back to them what I thought they said instead of interpreting what they said."

Good communication, like so many other aspects of a partnership, relies on trust and reliability. If partners are consistently responsive to one another -- especially in emergencies -- they will be more likely to keep a dialogue flowing every day. Furthermore, Pease says that surprises are not a good thing. Predictability is critical.

Microsoft's best partners have "a regular rhythm of the business where we do things on a scheduled basis," he says. "Those partners that we do have a direct relationship with are religious about sticking to [a] process and [a] review schedule."

And, as always, honesty counts.

"It's standing by your word that is going to make or break you in the long run," Bickmore says.

5. Review and Refine Regularly
Even the strongest partnerships need regular evaluation to ensure that everybody -- both partners and customers -- is benefiting from the match. Regularly reviewing and renewing the goals of the partnership are critical, but there are other methods that can help produce success.

"In defining your partner program, it's important to be innovative and constantly review and refine your program -- test in focus groups and either further fine tune or move on to another idea," Colomb says. "Partners are always eager to participate in studies of partner programs or partner benefits because they'll be the first ones to benefit from them."

Because satisfied customers should be a main goal of any partnership, they should have a say in judging how well the partnership is working. Customers can also be the "X factor" that keeps partners honest with each other or injects new ideas into a relationship.

"If you call a partner, they'll say everything was great," Bickmore says. "Then you call a customer, and he says, ‘We think they could improve.' If [a partner] tries to hide the fact, that lets you know maybe this is not such a great fit. It gives you that gut feeling again."

Companies should also guard against letting a partnership -- or one side's participation in it -- become static. Like business, partnership changes. Flexibility is critical in even the strongest of unions.

"There are times in a partnership when we struggle," Pease says. "We generally resolve those [situations] successfully when we go back and look at analyzing why it failed and take corrective action. Sometimes we've got to change, and we do. Sometimes the partner has to change. Sometimes we both have to change."

The work involved with partnering can be tiresome, involving significant amounts of money, energy and hours. But the harder two well-matched partners work, the more benefit they will receive from each other.

"In any relationship, as your commitment increases, as your engagement becomes stronger, as your interaction becomes more frequent, special favors begin to accrue to you," Breslin says.