A strategic partnership is defined as an agreement between two or more organizations to create shared benefit of equal or similar value. An organization’s potential is limited by its internal constraints. The purpose of entering into such strategic partnership agreements is to dramatically reduce or eliminate these constraints.
We separate strategic partnership value drivers into two categories. Above the line value drivers affect non-core operating revenues and below the line value drivers affect core operating revenues.
Nine Core Values Drivers of Strategic Partnership
- Cost Abatement
- Non-Traditional Revenue
- Sponsorship Revenue
- Authority / Credibility / Trust
- Audience Experience
- Communication / Narrative
- Audience Access
- Shared Expertise
- Competitive Advantage
We are going to be releasing our new Strategic Partnership Guide™ shortly. This will go into greater depth on each of the nine core value drivers however in the interim it is important to recognize that for strategic partnerships to capitalize on their full potential, they must deliver on a minimum of five of these value drivers. Some of the things that are important to consider when developing a strategic partnership strategy are outlined below.
Organizations need to be ready to leverage the value drivers of strategic partnership. It is not enough to want the end benefit. Organizations need to be ready to change the way they look at and manage parts of their business. They also must be ready to commit to each of the five key pillars they are focusing on in order to leverage the full value that strategic partnerships deliver towards an organization’s business and marketing objectives.
For strategic partnerships to flourish, an organization needs to understand that the nine core value drivers they can leverage go beyond departmental lines and traditional organizational structure. This means a framework needs to be put in place that allows departments to collaborate in an operationally efficient manner. Strategic partnerships have the ability to create value for every single department within an organization, therefore the framework needs to be in place to allow this to happen.
Organizations must have clear expectations for what they are prepared to give as their value proposition to strategic partners and have clear expectations as to what they would like to receive in value back. The baseline for a conversation around a strategic partnership starts with each partner having a defined ‘give’ and a defined ‘ask’. From there the conversation becomes more holistic as the strategic partners explore ways to leverage all nine of the core value drivers that strategic partnerships represent. These expectations also need to be formalized by way of setting key performance indicators (KPI’s) that are going to be measured and reported.
Management & Measurement
Strategic partnerships are not a set-it and forget-it scenario. As such and in order to capitalize on the full value for all stakeholders they need to be actively managed and measured against the pre-established KPIs. Effective management also ensures that new opportunities for the strategic partnership are identified and can be explored.
With all stakeholders benefiting from a strategic partnership it is important that beyond management and measurement, they must be subject to continuous improvement. No new relationship is perfect. Part of the framework and expectations covered earlier have to do with creating channels of open and transparent communication. This means regularly communicating on what works, what needs to be refined, improved or changed and how can we introduce new opportunities that have been uncovered.
The Final Bell
This weeks final bell on leveraging the nine core value drivers of strategic partnership comes to you by way of our Managing Partner, Laura Richard. “ I often equate strategic partnerships to living, breathing beings. While this analogy might be a bit extreme, it points to the fact that strategic partnerships are not static – they are not managed by a contract. Strategic partnerships are an agreement in principle between organizations to work together for the betterment of each others’ businesses. While they take more time to develop, the outcomes are that much more valuable to the organizations and therefore incredibly rewarding.”