I was speaking at a payments conference in Manhattan last fall and we got the Q&A part of the evening. As the crowd got warmed up, and the questions became more honest and genuine, someone asked me why I thought so many partnerships in the payments space failed.
I had recently experienced a lengthy, frustrating couple years – yes, years – trying to get an established partnership launched with one of the major banks in New York. We had everything going for the partnership: we had a unique capability, they had a need for the capability; we were focused on something their consumers wanted, they wanted to improve services to their consumers. In fact, they even invested in our company. If you can’t get a partnership to work when the partner is also financially invested in your company, then it is a good time to contemplate why.
All this was running through my head as the question was being asked, and I responded with the most truthful answer that I could provide on such a complex issue: I answered that in the SOX compliant world in which we live, most banks and corporations have significantly limited the signing/decision authority of leaders in their own company, and only a select few executives are empowered to say “yes”, while risk concerns can be voiced by anyone, meaning that virtually everyone is empowered to say “no”.
I completed my short answer by saying “the fundamental problem with many partnerships is that they deal is struck by the ‘yes’ people, but implemented by the ‘no’ people”. In addition to some laughs, I got a lot of head nodding in the audience.
So how to make partnerships work? Three ideas….
1. To steal a line from former House Speaker “Tip” O’Neil, “All politics are local”. If you’re going to expect the field to implement a partnership, don’t only have Corporate Development execs cut the deal at the HQ – have a sales manager on the deal team. If sales won’t participate in the formation of the deal, they probably won’t put their shoulder to the plow when it’s time to implement the deal.
2. Make a formal governance process part of the deal at the outset. Understand that nothing goes according to plan, and you have to meet occasionally to course-correct. Include both the “yes” people and the “no” people in the meetings.
3. Earn the right to the big partnership deal by closing some number of deals together. Formal partnerships should be second acts in a play – not the opening act.
Like many things in life, partnerships look easier from a distance. They require perseverance and investment. In the end, what defeats so many of them is the disconnect between the deal creators and the deal implementers.
Got any good partnership stories involving the disconnect between “yes” and “no” people in your own career? Fill us in!