An article in Strategy & Business asserts inter-industry partnerships are the preferred pathways to growth.
The article does a good job in explaining:
two ways in which banks typically partner
how to find partners
why a better customer experience must sit at the core of any partnership
what the business development team needs to pay attention to when negotiating the financial structure of a financial services partnership
Using plenty of financial services and retail examples, Strategy&Business argues that financial services CEOs “need growth partnerships to kick-start their revenue engines” and that partnerships are one path to “quick, low-cost, low-risk scale.”
Unfortunately, the heading of the section - “making a partnership work” - seems somewhat optimistic, because much more goes into a successful, sustained partnership than negotiating a good deal for both sides.
The article repeatedly makes the point that partnerships need to be “well-executed”, yet spends only three sentences in the very last paragraph explaining what that means. There’s much more to a successful partnership than clarity of economic and strategic outcomes, trust and building goodwill early, as the article would lead its reader to believe.
Alliance management best practices
We like to offer these five critical alliance management best practices that help ensure financial services partnerships are successful:
Early involvement of a well-resourced, well-trained and experienced alliance manager as the deal is being negotiated to ensure not only trust building but also a smooth launch into operational steady state.
A realistic operational plan for the initial operating period, signed off by the future alliance joint steering committee as part of the agreement.
Frequent joint steering committee meetings at the beginning of the alliance.
A digital alliance management infrastructure - at best to enable both parties to manage the operational plan jointly, yet at least to empower alliance analytics, activities and decisions in support of alliance management and the joint steering committee.
Periodic health checks conducted across both parties and comprehensive annual reviews.
These suggestions aside, the article is a well-worth read for Heads of Business Development, Heads of Strategy and Heads of Alliance Management who want their teams to add value early in a partnering transaction.
Contact us today to speak with one of our senior alliance management experts about digitizing your alliance management.