Strategic partnerships – one of the keys to turning around organisations

Strategic partnerships be they financial, commercial or industrial are powerful business development levers.

Why enter into strategic partnerships?

Strategic partnerships offer opportunities that enable businesses to accelerate their growth, pool investments, control operating costs, acquire specific expertise or even reduce risks.

As businesses now need to cope with the new challenges of increasingly tight investment, production and innovation cycles compounded by keen and unpredictable competition, partnerships can provide an effective response. For many years they revolved around established players to secure market shares, tap into new geographical zones and new users. Nowadays new forms of partnership are emerging with the major groups that are looking for the agility and creativity that start-ups offer in exchange for funding and experience. In recent years this desire to grow closer has spawned many initiatives such as the setting up of business incubators, deploying in-house campuses, taking part in hackathons, launching open innovation platforms, etc.

While partnership is a source of performance, its implementation is a delicate exercise that requires particular attention if the existing value is to be safeguarded.

What are the conditions for the success of strategic partnerships?

Certain preconditions must be in place to guarantee the long-term success of the relationship:

Target the right partner and the right partnership

The preliminary stage is to identify the right profile (industrial, financial, commercial, etc.) and check that the businesses are compatible (their core business, positioning, strategy, managerial structure, functional and operational organisations, values and cultures and so on). Once the partner has been identified, the very nature of the partnership is crucial, as is the need to embrace change to meet market challenges. For example, and if necessary, two businesses must be capable of upscaling their cooperation agreement into a joint-venture.

Building a balanced agreement

Each player must be committed and have a stake in the partnership’s medium- and long-term success by sharing costs and benefits, pooling means (resources, skills, network, etc.), implementing crossover profit-sharing mechanisms, innovation development and so on.

The following elements must also be considered and shared by the players: the impact of the partnership 4 or 5 years into the future, the value generated, how intellectual property rights are shared, how the commitment will move forward as well as the terms for making changes and leaving the partnership.

Durability

It is important to define clear, respected governance (roles and responsibilities of each party) to clarify the powers and decision-making capacity of each one. The role of governance will be to decide on the adjustments needed to enable the relationship to continue and increase value creation. Furthermore, it is vital to properly define and follow a set of tangible KPIs to measure the performance of the strategic partnership.

By.O supports businesses through the major stages of partnership, from identifying the target to operational deployment.

We have played a part in the success of several strategic partnerships, such as:

• Intermarché with its growth strategy in preparation for its acquisition of Bricorama
• the general management of La Poste enlisted our help on the strategic development of its services activities to accelerate its prospecting and implement national partnerships.
• we successfully developed and spearheaded a partnership between the Wensli group (leading Chinese silk producer) and Marc Rozier (French specialist silk and high-end scarf maker)
• the Square Habitat group commissioned us to organise the integration of new estate agencies and guarantee the operational continuity of the activities of the integrated agencies.