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How to establish a successful digital partnership
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Digital partnerships are an alluring prospect for many reasons, but an alliance can also have its pitfalls. In the second part of this series, Nick Spooner offers a navigational guide to establishing a successful working relationship.
Digital transformation often calls for a partner to help bridge the gap between your current vision and future goals.
According to Connected Companies: Strategic Partnerships for the Digital Age, a June 2015 report by Telstra and The Economist Intelligence Unit, 38% of companies surveyed say they have “embraced” digital disruption and 50% plan to partner with a technology or service provider in the next 12 months.
A digital partnership is an alluring prospect for a variety of reasons: it can provide an organisation with access to expert knowledge or skills, offer a pathway to a new customer market, or lend itself to a more agile approach. Essentially, it allows you to focus on your core business while outsourcing its growth.
The benefits of finding the right digital partner are well-documented and the appetite is there: 53% of Australian CEOs plan to enter into a new strategic alliance or joint venture in 2016.
This doesn’t mean to say that partnerships are always successful. With so many possibilities for the form that an alliance could take, and as many pitfalls to avoid, it’s crucial that ‘team fit’ is front of mind, the goal is well considered and any potential issues are addressed as early as possible.
If you’re looking to ‘up’ your digital credentials or sell on your technology expertise, there are a range of points to consider, including:
Know what you want
The first step is to refine your goals. Are you hoping to find a service provider whose analytics capability will help you decipher your data, a vendor equipped to turn your enterprise into a nimble, cloud-based operation, an industry stalwart that can deliver the technology to improve customer service or a combination of the above?
There could be a range of outcomes you seek so it’s important to clarify and rank them. For instance, are you trying to reach new markets, improve user experience, access a greater data pool, save money, or enhance your brand? Often, this question anchors on the digital maturity of an organisation; those at the lower end of the scale may struggle to articulate what it is they really seek.
Refining your goals may lead you pursue more than one alliance depending on criteria. In most cases, partners are looking for specialist, high-calibre resources – they aren’t seeking generalists.
Know when you want it
Before you start courting prospective partners, make sure you have your high-level objectives in place. It’s vital to establish timeframes, agree on milestones and put deliverables against your long-term goals.
Bear in mind that the nature of a relationship changes over time, so take this into account when plotting objectives. This case study by PwC’s Strategy& offers an interesting breakdown of an alliance lifecycle.
Once you establish a strong, trust-based partnership (more about that later) then your strategic partner can help you refine a more detailed and achievable roadmap.
Research your potential provider
Your ideal digital partner might have conceived a state-of-the-art piece of technology or written the textbook on customer engagement but the decision to work with them isn’t down to their credentials alone.
You’re essentially ‘throwing in your lot’ with an alliance – this isn’t just about trading services and value exchange. Do you really know who you’re dealing with?
Make sure you have a checklist of service criteria and don’t be afraid to spend time researching the market or seeking referrals (if you can) from previous clients or partners before you sign up to a deal.
Also, why not try before you buy? Consider doing a small-scale project together to test the nature of the working relationship. A minimal test in this way might also help you challenge and articulate what you think you want.
Prioritise compatibility
There’s no denying that a digital partnership has the potential to accelerate growth and help you tap into new markets but having the right technical skills is only part of the requirement. Behavioural and team fit are also hugely important.
Partnerships are about being innovative, accelerating outcomes, and achieving new things that simply aren’t possible alone. Can both parties inspire and accommodate each other to make this a reality?
It is important to have a partner that understands what drives you. Both parties need to earn trust through open and authentic conversations. Once trust is in place, the conversation turns from ‘What I want’ to a two-way conversation that helps scope out successful outcomes regardless of the partnership’s direction of money. Feedback I hear time and again is, do not underestimate compatibility and a good working relationship.
Discuss the limits of your data
In a digital alliance, it is almost inevitable that sensitive data will be shared, so security and privacy should be cause for consideration.
Data sovereignty, for example, is a big issue for some companies, especially those in the US, where the US Patriot Act (which gives the government the power to undertake surveillance on data beyond its shores) prevents business information from being stored outside the country.
In some cases, such as with Google, migrating to the cloud means your data is replicated in multiple countries so that it’s easier to access when travelling. This does cause problems for businesses in some countries.
Don’t be afraid to ask all the questions around data. Often, this topic is seen as a difficult area that participants are reluctant to delve into. Yes, it’s complex – but it’s also important to discuss from the outset.
There may be no right or wrong answers. The important thing is to agree on what is an acceptable level of risk and who is across that risk. Make a collective decision about your risk appetite when it comes to data.
Manage the partnership
For an enterprise to run smoothly, it’s important to form the right management structures and accountability.
Always have someone representing your business who has oversight into the streams of work – this becomes more acute the greater the number of partners involved. You don’t want teams heading off in different directions so have structures in place to ensure there is guidance and oversight of business and technical requirements.
Be flexible and responsive
Partnerships must be agile. They need to share information quickly, respond and ramp up in an instant if they need to. Again, this relies on forming the right structures and accountability. It also demands that you have suitable tools in place – there are plenty of good collaboration tools and apps available to support this.
Also, forming a partnership outside of your industry or capability presents an opportunity to challenge the status quo. Approach things differently and make the most of the insights that your new partner has to offer.
From establishing clear objectives to working through complex conversations, the best digital partnerships are based on transparency and trust. What steps has your business taken when it comes to establishing a winning digital partnership?
With thanks to Greg Taylor, Paul Bamman and Josh Teichmann.
Read part one of this series, Perfect match: Why it’s important to find the right digital partner.
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