How Can Partnerships Create Leverage?

“In this new wave of technology, you can’t do it all yourself. You have to form alliances.” — Carlos Slim Helú, Mexican business magnate (and wealthiest person on Earth as of 2012)

How Can Partnerships Create Leverage? - Laura Stack #productivity
While individual effort serves as the foundation of all human activities, true accomplishment requires partnership. The trick here lies in figuring out how to cooperate in such a way that 1 + 1 = 3 or more. We call such leverage points synergy, wherein the whole exceeds the sum of its parts.

So before you take on a prospective business partner, ask yourself these questions first:

1. How well do our strategic priorities align? Aligning strategy within one organization is hard enough, much less between two. The better your missions match up, the more likely you’ll be able to leverage off each other. But don’t expect a slam-dunk; other factors may stifle synergy. For example, PETA and the ASPCA have similar end goals, but their tactics differ drastically—so they probably wouldn’t make good strategic partners.

2. Do we both have strengths we can leverage? Don’t dismiss an organization out of hand just because it’s bigger or smaller than yours. If prospective partners had to be equal in size, we’d have no A-Rods or Oprahs. Instead, look for what you can each bring to the table that maximizes everyone’s productivity and profits. Sometimes individuals can successfully partner with organizations consisting of thousands of employees, because each side wants what the other side has.

3. Are we in direct competition? If you offer complementary products/solutions that fit hand-in-glove or function in non-overlapping geographic areas, you can leverage a business partnership effectively. Otherwise, it’s extremely difficult. You can join the same industry groups, but you can’t expect to partner well with organizations competing for identical resources.

4. Will they give me access to pre-established relationships? The easiest way to acquire profits, working capital, and influence is to leverage existing relationships with clients and contacts. A new partner can let you take advantage of existing relationships you don’t have to build at all and might not ordinarily have access to.

5. Do they have relationships I value? Take great care in the selection process. Make sure your prospective partner’s existing relationships represent the type of relationships you’re looking for. Similarly, be careful whom you introduce to your own contacts and clients, since a bad partner can damage your existing relationships. If anything seems fishy, back off.

6. Can we multiply each other’s efforts? In some cases, the right partnerships can put you in multiple places at once without increasing your workload. Let’s say you and a partner agree to write guest blogs for each other. Right there, you’ve doubled your online visibility without increasing your workload or duplicating content. You can also share jointly written copy identifying all partners involved, so you multiply your exposure by the number of partners without multiplying your marketing expenses.

7. What’s my exit strategy? If the relationship goes sour, you need a way to escape before you incur permanent damage. As you map out your strategies, devise a way to safely and fairly dissolve the partnership if it starts going in the wrong direction.

From Me to We

We all know the value of teamwork, but many organizations fail to consider opportunities outside the immediate family (so to speak). Rather than go it alone, consider developing ties with organizations independent of yours. Just proceed carefully, asking yourself the questions I’ve outlined above before you “tie the knot.” Poorly considered partnerships can end disastrously. On the other hand, a good partnership, properly leveraged, can benefit you in ways you’ve never before experienced.