Knowing How to Form Partnerships is a Critical Success Factor
The IoT market is in its early stages and this challenges solution vendors to remain relevant as requirements and outcomes constantly change. In this setting, knowing how to form partnerships is a critical strategic skill that can make the difference between staying relevant and going out of business.
In Part One, IoT Partnerships – A Guide to Partnerships Types and Relationships, we looked at the benefits of partnerships and the three components of a partnership – what you’re partnering for (partnership type), how you work with each other (partner relationship), and the scope of your engagement.
Now we’ll examine 10 best practices for actually developing those partnerships.
How to Form Partnerships in IoT – 10 Best Practices
1. Find and Create Joint Value
Successful and long lasting partnerships are built on one or more strong, joint-value propositions. When considering potential partners, evaluate what each company gets from the partnership, and how these fit within each other’s overall strategy, capabilities, resources and offerings.
Understand and quantify the extent of the value provided to the solution, the channel, and the customer. Avoid “one way” partnerships – focus instead on creating a “two-way” fit in as many areas as possible – from development, go-to-market, and support.
2. Define and Prioritize Specific Partnership Outcomes Upfront
Partnerships give IoT vendors key advantages – speed, capabilities, resources, and credibility. Unfortunately, many partnerships don’t live up to their potential, delivering only a small part of what was envisioned.
Other partnerships turn into “Barney” relationships in which both sides say “I love you, you love me” but nothing ever gets done.
In the dynamic IoT market, speed is of the essence. It’s critical to define specific outcomes, deliverables and milestones before the partnership is formally executed.
This one task then drives and secures the commitment, the priorities and resource allocations necessary to make the partnership work. If the companies are unable to agree or commit to specific things upfront, then there is no partnership.
3. Plan Ahead for Changes in the Partnership
As the IoT market and ecosystems evolve, so will the partnerships. The nature of the changes in the market will drive how the partnerships are affected. Some partnerships will go away, while others need to be re-scoped.
For example, IoT connectivity technologies may coalesce around a certain standard, which will render some partnerships obsolete. In other cases, as IoT platforms expand to manage edge devices, analytics solutions providers will need to expand partnerships with edge device manufacturers.
Plan for changes in the partnership by reviewing the partnership programs on a quarterly basis. Update and adjust the partnership types, relationships, and scope. Revisit the specified outcomes and priorities to determine what changes are necessary.
When creating partnership agreements, specify how changes to the original partnership, including terminations, are handled. Avoiding overcommitting and locking into a partnership arrangement that’s hard to extract from.
4. Strive for Quality of Partnerships, Not Quantity
It’s critical for companies to partner selectively and not over-partner. It’s more important to commit to a small number of partnerships with strong joint value and get things done, than a large number of partnerships that drain valuable resources and accomplish nothing.
Many times, smaller companies want to partner with more established companies because it provides them with fast credibility. But unless there’s real, two-way value in the partnership, it’s best to avoid those and focus on the few partners that can help advance the business.
5. Drive Accountability Across All Levels
Partnerships are often crafted at the executive levels, but left to the field or working levels to implement. In the fast moving IoT market where changes happen in days and weeks, instead of months and years, it’s critical that all levels are equally invested and accountable for the success of the partnership.
Partnership relationship managers, on both sides, are accountable for the overall management and execution of the partnership. Executives are responsible for continuously reviewing, prioritizing, and committing to the partnerships. At the execution levels, managers are accountable for staffing, prioritizing and implementing the partnership outcomes and goals.
This accountability is connected across all levels, from top down, to ensure partnership success.
6. Break the Ice by Prioritizing New Markets and Opportunities
Partnerships often move slowly at first, because the sales teams are reluctant to engage. They don’t want to disrupt current deals by confusing their customers.
In addition, they haven’t yet established a working relationship with their counterparts and are learning to trust each other.
One good ice-breaker strategy is to prioritize the pursuit of new opportunities that neither side is currently in. This allows the field teams to work together on a “clean sheet” account in a “safe” environment, without being held back by personal interests.
7. Build and Maintain Relationships at All Levels.
Joint value is what brings partners together. But good relationships are the glue that makes the partnerships on a day-to-day level. Mistrust, personal conflicts and self-interest will render the most strategic of partnerships ineffective.
Good relationships get things done, and done faster. Good relationships can make regular partnerships act like strategic partnerships. It’s critical to invest in building good professional relationships across all levels of the organization.
8. Align Your Solution Releases with Each Other
Partners with IoT solutions that integrate with each other must align their roadmaps so that compatible products and upgrades are released concurrently.
When the solutions are released out of sequence, customers will experience system compatibility issues. This ultimately results in system integrators and customers who refuse to upgrade their solutions to the latest version because they are afraid it will “break” something else.
9. Continuously Invest in the Partnership
It’s easy to become complacent when the partnership is signed or when the partnership is producing. In order for the partnership to remain effective and productive on a consistent basis, management on both sides must continuously invest in the partnership.
This can be mean adding more resources to the partnership, developing more solutions together, pursuing new markets jointly, or rotating top talent into the partnership.
10. Develop “Ecosystems Thinking”
As new use cases emerge and IoT ecosystems continue to evolve, solutions vendors must look beyond their corporate boundaries to be successful. Whether they like it or not, their success depends on the success of their partners and the ecosystem. They must design for their partners and the ecosystem as much as their own needs.
Successful vendors are ecosystems architects, not just solutions providers. Training executive and managers to become “systems thinkers”, developing product managers and engineers into systems engineers, and incorporating systems engineering methodologies into their product development programs are all important approaches.