Over the last couple of weeks there has been a big noise about the coming of Apple’s new iPhone4. The interesting thing is that Apple is not responsible for all of the noise itself as much of it has come from its partners, companies like Orange in the UK. Apple is a keen believer and user of partnerships to leverage its new product launches and distribute its products and this strategy has been one of the components at the heart of Apple’s growth strategy in recent years.

There are only three ways to grow your business: buy, build or partner. Most businesses concentrate on the ‘build’ part and reject the ‘buy’ part as too risky and expensive. However, many do not consider partnership as a route to growth.

Partnership can be a great way to leverage your existing strengths and combine them with another firms to grow your business, enter new markets, develop new products/services and reach new customers. However, many businesses, particularly smaller businesses, do not use this strategy for a number of reasons including loss of control, inability to find and engage the right partner, reputation risk, time and investment required to set up a partnership.

A partnership can be as flexible as you want it to be and, in some senses, is a bit like a marriage or a relationship but it does take work and communication to make it work. If not, according to Dr Alan Barlow, former CEO international engineering group and former partner at PricewaterhouseCoopers in an article from the Chartered Institute of Management Accountants (CIMA):

40% of joint ventures and strategic alliances result in divorce within five years.

This might seem a lot but that shouldn’t stop you exploring the idea and, after all, five years in business terms can be a long time.

Whether it is a short term venture or a long time commitment you are after, it is important that you learn how to make it work. Here are a few tips to help you make partnerships work:

1. Make sure that your end goal and the way you want to go about doing business is shared and agreed between both parties – It’s all about agreeing upfront where you want to go and how you want to go about achieving that. Get this wrong and it’ll cause tensions straight away.
2. Understand each others expectations – Different businesses will enter into partnership for different reasons. It’s important to understand these at the outset and review them regularly to make sure everyone has a common understanding about the partnership.
3. Who is strong where – A strong partnership works best if you identify the strengths of you and your partner and leverage those strengths to the mutual benefit of the partnership.
4. Where are your weaknesses and limitations – Just as important is understanding the limitations or weaknesses of the partnership and partners. These need to be acknowledged and accepted and decisions made if they need to be filled before they become a problem.
5. Set goals – If you want to have a business partnership that really works, then you need to both set goals and strive for them. Have individual goals, but make sure that these goals will support the goals of the entire company. Make sure that you take a look at these goals together and then follow how well you actually achieve them.
6. Set a timeframe – This is a bit like Apple and O2 when Apple first brought the iPhone to the UK. Initially, O2 had an exclusive distribution partnership with Apple that came to an end after about 2 years (It was argued in the press and industry that O2 didn’t strike a great deal and may not have made any money from the agreement). Following the exclusive period, the iPhone became available on other networks. So, don’t let partnerships fizzle out. Set a timeframe on them to review progress. If it is still working at the end of the time then reset expectations and goals and start again.

I hope that these pointers will help you explore the partnership growth strategy option.

Let me know if you would add any other tips to help make business or any other partnerships work better.