In the context of economic integration and increasingly fierce competition between companies, the solution of merger or association is very effective. The world has witnessed successful association between companies to become large corporations such as Abercrombie & Fitch, Procter & Gamble, Ben & Jerry.
If you are looking for a partner to manage your company, what kind of person should you look for? How can you create a lasting relationship and what are the potential risks you should be aware of?
Here are some lessons that businesses can learn from forming an association or partnership.
The key elements to creating an effective partnership are consensus, shared values, mutual respect, and complementary experience and skills.
unanimous
You can tell whether you can work with someone from the moment you first meet them. You should trust first impressions, because they are based on your own experience. But that doesn’t mean your first impression is completely correct.
Sensitive people can understand why you act the way you do and what you need from them, so improve your first impression by communicating in a variety of contexts.
What do you think of your dinner partner or group? Does this person leave a good impression on you at dinner with your fiancée or at a round of golf? Is there evidence that this person has a good rapport with others in your company, not just senior executives but receptionists, administrative staff, and others?
When Comcast CEO Brian Roberts hired Steve Burke as COO of the major cable company in 1998, the two men spoke many times in a variety of settings. One thing that neither could deny was that they became closer after these conversations.
Pay attention to how your feelings for that person change over time. It's a good sign if you feel more comfortable with them and vice versa.
Shared values
Your values such as dedication to work, fairness and ambition must be completely aligned with your potential partner's values or things won't go very far.
In the example mentioned above, the CEO assumed that the newly hired COO could work the same hours as he did and was completely satisfied with the company's existing facilities.
However, the COO had worked for many years in large corporations with excellent facilities. And he was used to the way of working there. He believed that working hours were not important as long as the work was done and the rewards for performance should be commensurate with the benefits that large corporations often offer. Therefore, in less than a year, the COO left the position because it was not satisfactory.
Mutual respect
Every successful partnership is built on mutual respect. Intelligence, education, and family background are factors that make you respect someone. And this is an important, indispensable factor, a catalyst for a successful partnership.
Additional skills and experience
Forming a partnership or partnering with someone means that the experience and skills you lack will be complemented by the experience and skills of your partner. Everyone wants to find someone who shares their views, but the goal should be to complement skills and experience.
For example, Martha Stewart is the innovator and strategic planner of Martha Stewart Living Omnimedia, while CEO Susan Lyne oversees all aspects of the business. Howard Schultz is the soul and marketing guru of Starbucks, while CEO Jim Donald is an experienced leader who delivers ideas, products, and services to millions of consumers around the world.
Ensure success, avoid potential risks
A fundamental aspect of a partnership is that responsibilities must be clearly defined, goals must be defined, and controls must be in place, as well as regular and effective communication. Here are some tips for success and avoiding potential pitfalls:
Assignment of responsibilities
When forming partnerships, there must be a clear agreement about the responsibilities of each party, not just on paper but also in specific situations. For example, you must consider who will handle meetings, develop advertising and promotion plans, confront directors, appear before the press, meet with investors, and execute investment plans.
When Michael Ovitz became COO of Walt Disney, he thought his job would be to coordinate the divisions and come up with strategic alliance plans for the company, among other things. But the more he tried to do his job, the more frustrated Michael Eisner and other senior executives became.
In an effective partnership or partnership, the CEO and COO will draft a document, almost like a constitution, that outlines the goals of the partnership, responsibilities, methods of cooperation, and ways to resolve disagreements.
Set goals and control them
The biggest risk of a partnership is when there are disagreements about goals, roles, and contributions. Even if everything is going well, if you and your partner are working towards different goals, all your efforts will be in vain.
When Bill Perez left consumer goods giant SC Johnson to become CEO of Nike, he thought his new job would be to lay down rules, study consumer markets, and run things more closely. But when founder Phil Knight realized that the changes Perez was making weren’t what he wanted and that Nike’s longtime employees were uncomfortable with them, Knight decided he didn’t need those new values—at least not the way Perez was trying to change things.
But having learned from the partnership, Perez agreed to become CEO of Wm. Wrigley Jr., the first non-Wrigley family leader in the company’s 116-year history, less than a year after leaving Nike. Before accepting the position, Perez spent weeks with CEO Bill Wrigley to define roles, work styles, and set goals. Early signs suggest that the partnership has worked well.
Regular communication
It is difficult to overstate the importance of frequent and effective communication in forming lasting cooperation. Poor communication mostly stems from differences in goals, blurred responsibilities, and overlapping orders.
At Martha Stewart Living Omnimedia, Susan Lyne regularly has scheduled lunches with Martha to discuss projects, priorities, and business decisions. They have dinner together once a month to catch up, and cultural issues and staffing changes are also discussed. They also exchange e-mails, voicemails, and have quick meetings at the company to make sure they’re on the same page and on the same page.
The above are some useful experiences for those who are looking for partners for their business projects as well as for those who are preparing to start a business and need someone to share the joys and sorrows. These experiences can help you find a suitable partner, thereby forming a company that operates effectively and stands firm against the challenges of the market.
BWP translated from finance
