Tag Archives: Competencies

How Do You Choose The Right Strategic Partner? Five Guidelines

Situation: A rapidly growing company is expanding in both its primary market and into new verticals. A number of companies are interested in strategic partnerships. How do you select the right partner in the right space? How do you choose the right strategic partner?

Advice from the CEOs:

  • At the end of the day it’s about a connection with the partnership which extends across both organizations. Look for cultural synergy with the other company. Do your and their managers and employees “click” or are they oil and water? This is a gut assessment.
  • Is the quality of people in both companies complimentary? Is there similar drive for quality and attention to detail? Will technical integration be smooth? Are systems complimentary? At a minimum on both sides need to possess the right skills so that these factors won’t hinder the project. Are sales and marketing approaches compatible? Will teams be able to work together?
  • You need to have strategic commitment across both organizations. Partnerships don’t work if there is only alignment at the top. Executives can’t shove a new opportunity down the throats of those who report to them. There must be excitement about the opportunity across both sides of the partnership. There must be complimentary competencies, capabilities and commitment. Is there a clear understanding of the goals and objectives required to succeed? Reward structures and incentives must be aligned down through the two parties. Conflicts will lead to struggles.
  • There must be a strategic alignment between the two organizations so that both see the partnership as complementing their broader strategic plans. There must be a fundamental strategic win-win. The venture must be seen by each party as core to their business, plans and results. If this isn’t present, the collaboration can collapse when a better opportunity that comes along.
  • Look for some gauge that the partnership is as important to the other party as it is to you. What other partners do they have? Is the size of the opportunity enough so that you are assured of their ongoing attention?

Thanks to Jim Soss of Red Aril for his contribution to this article.  

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What’s the Optimum Business Strategy: Going Broader or Deeper? Five Points

Situation: A CEO wants to expand her company’s business base, either by diversifying its client base, or by going deeper into current clients. What are some of the key questions that should be considered as they evaluate these two alternatives? What’s the optimum business strategy – going broader or deeper?

Advice of the Forum:

  • If the company diversifies, what will be the perception of current clients?
    • Will they see this as more or less beneficial to their interests?
  • What are the most important objectives – what is leadership trying to achieve? Does the response to this question weigh in favor or one or the other alternative?
  • Analyze the available markets, as well as the company’s current share of the existing market. Is the company the dominant player in its market or is there still ample growth opportunity by investing in deeper penetration of the existing market?
  • Are there important vulnerabilities regarding the current client base? Is the company too dependent on a small number of customers? What will happen if key customers decide to choose another vendor or to develop internal resources to meet their needs?
  • For the option to go deeper into the current client base, what is the resource match between the objective and current resources?
    • Do current employees have the appropriate competencies?
    • What is the available time and dollars to pursue the market?
    • What is the ROI target and what are the risks?
    • Does the company have the right infrastructure to pursue the market, or will it require developing additional infrastructure? What is the cost of development in time, money and resources?
    • It is an area in which the company can excel, and does it align with the passion and drive of the current business focus?

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