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Human relationships are extremely important in the business world. Some of the most interesting stories come from unique partnerships in the early days of business. All partnerships begin with a common goal of working together to create more value than either party could do alone, but not all are successful. In fact, as many as 70% of business partnerships fail in the long run.
As a scholar who studies strategic partnerships, I always strive to learn from business owners, experts, and case studies to obtain advice on keeping strategic partnerships healthy after the initial decision to form them. Here are four ways to strengthen key third-party business relationships.
1. Open communication channels widely
The best advice is to communicate and keep communicating. Regardless of the communication mode, it’s important to encourage third-party partners to share valuable insights, feedback, and ideas that contribute to mutual success.
David Nudelman, CEO of Scandinavian Capital Markets and an expert in strong business partnerships, has led Scandinavian Capital Markets to become a leader in foreign exchange trading in Sweden and beyond. His advice? As he told me in a recent email exchange, “Through our years of experience, we have honed our approach to relationship building, and our basic advice is simple: .It’s about listening intently.”
Nudelman explains how easy it is to not follow this recommendation. “It’s amazing how many companies ignore the importance of listening to their customers and partners and choose to focus solely on sales.”
Nudelman continues. “Active listening not only builds a bond, but also gives you the opportunity to gain deeper insight into your partner, paving the way for a deeper understanding of how you can collaborate effectively in the future.”
2. Define clear expectations and responsibilities
Another key element to strengthening key third-party relationships is setting clear expectations from the beginning. Document detailed roles, responsibilities, and deliverables for everyone involved to avoid misunderstandings later. One way to do this is to co-create classifications and workload assignments.
A taxonomy is an end-to-end inventory of all the work that needs to be done to achieve the desired outcome of the partnership, regardless of which party is doing the work. Once the parties have defined all the work that will be included in the taxonomy, the next step is to collaborate on workload assignments that define who will do what.
The combination of classification and workload allocation provides parties with a clear understanding of the end-to-end process, as well as clarity on who is doing what to support the partnership.
Magnus Kuchler, Market Leader at EY Nordics and Country Manager at EY Sweden, has helped over 250 organizations develop strategic business relationships. Kushler said in an interview: What I like about using taxonomy and workload allocation is that it gives stakeholders a complete picture of the relationship. ”
3. Invest in relationship building
Treat third-party partners like internal team members by nurturing and growing the relationship over time. Invest the time and effort to understand your partnership’s cultural fit and learn your partner’s work culture, values, and goals to build a strong foundation for collaboration.
Look for opportunities to get involved on a personal level by attending events together or organizing team-building activities that encourage employee-coworker bonding.
It is very important to remember that partnership is a two-way street. The huge profits you get from your business are ideally equal for your partners too, so celebrate, honor and respect them together. Partners and employees are on the same footing. Working effectively and happily often requires a welcoming and appreciative work environment.
4. Fostering opportunities for mutual growth
Partnerships with a win-win mindset can foster mutual growth opportunities, such as the creation of innovative products and services. One great example of this growth opportunity is in Avanade, a joint venture between Microsoft and Accenture.
Microsoft’s extensive network of AI modeling and cloud analytics makes it the perfect partner for consulting firm Accenture. By combining their respective areas of expertise under the Avanade umbrella, both companies are now able to provide services that cannot be provided alone.
Avanade’s data and cloud-driven solutions leverage Microsoft’s cutting-edge technology and Accenture’s expertise in finance to provide clients with unparalleled access. Through this partnership, both companies are building their own brands, generating additional profits and discovering new ways to leverage the expertise they already have.
conclusion
What is the conclusion?
It’s your bottom line. When built correctly, partnerships can generate millions of dollars, euros, and yen in business value. But if you do it wrong, you can lose millions of dollars, euros, and yen.
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