15 Rookie Mistakes To Avoid When Setting Up A Strategic Partnership
One of the key challenges any novice business development professional faces is how to forge lasting partnerships that provide mutual value.
If executed well, strategic partnerships can have a great impact on a business, helping it grow exponentially with overall lower risk. Likewise, a strategic partnership that fails can have catastrophic effects that your company may never recover from.
So how can you build a strong, lasting relationship with a business partner to make sure your partnership will thrive? Below, 15 members of Forbes Business Development Council list some of the most common mistakes a rookie biz dev pro can make when sealing a strategic partnership.
1. Over-Promising Just To Get The Deal
One of the most common mistakes is over-promising or saying “yes” just to get the deal. Keeping your word is one of the most important pieces of building a professional reputation, especially in business development. If you expect people to take you seriously, you must keep your word. People you meet end up in all types of positions. You may even change companies. They will never forget your character. – Amy Cooper, VortexLegal
2. Failing To Forge Win-Win Relationships
In my experience, successful long-term strategic partnerships are ones where win-win relationships (i.e. fair deals) are formed early on. As tempting as it may be to negotiate a one-sided agreement (even when you might have the leverage to do so), I would strongly advise against this if your expectation is that the relationship last over time. Balanced relationships tend to be much more important than legal contracts. – Jeff Herbst, Nvidia
3. Lacking Transparency And Honesty
One mistake that business development professionals make in forming a strategic partnership is a lack of transparency and honesty about the revenue expectations, the cultural similarities and differences, and the simultaneous lack of vetting and checking references. – Barbara Read, Lifescript
4. Over-Trusting Your Partner
When setting new strategic business partnerships, too many novice business development professionals trust their partners too much and do not build the necessary protection for their intellectual property into their contracts. While you should partner with people you trust, sound legal advice on how to protect your company and its IP is critical to a successful relationship. – Joe Dooley, Ascendum
5. Not Cultivating Relationships After Initial Agreement
The biggest mistake is not cultivating and growing the relationship after the initial agreement has been “signed.” In many instances, the business development professional does not work to get something out of the relationship, which results in something that looks good on paper or a website, but in reality does not contribute to the revenue or growth of the company. – Mike Michalakis, Shindig
6. Not Understanding How You Can Help
The biggest mistake business development professionals make when creating strategic partnerships is not having a clear understanding of how they can help the company they are approaching. The best method is to understand the value you can provide to the potential partner whilst having a clear understanding of what you need help with from their end. The key is to move slow and methodically. – Dane Matheson, Sourcebits
7. Ignoring The Future Impact Of A Deal
The mistake I often see junior biz dev people make is when they don’t review the deal for its future impact. In the very narrow case of a deal impacting a future acquisition, questions such as, “Is the deal term transferable?” or “Does the deal set up a legal roadblock for a future acquirer?” are not usually top of mind for folks who have not “gone through the ringer.” – Nitin Gupta, Sticky, Inc.
8. Forgetting A Relationship Is Built Over Time
One mistake novice business development people make is to think that a deal is over. Most of the time, in business and in life, you can revisit or change an existing relationship with thinking outside of the box, defining a new strategic approach, and good old-fashioned finesse. Always remember you advance a relationship in time, even if currently your potential partner is not interested. – Jack Wagner, Zedo Inc
9. Lacking Clarity And Flexibility
The No. 1 issue is the lack of clarity about what each party’s objectives are and what each of them is committed to contributing. The other issue is flexibility to make the relationship work. Just like in human relationships, business partner relationships have their ups and downs, and maintaining a commitment and flexibility is crucial, rather than just watching the bottom line. – Hanna Zubko, IntellectEU
10. Building A Partnership Just For The Sake Of It
Getting a partnership in place for the sake of having a partnership rather than building an efficient and productive business relationship that will generate revenue thanks to this partnership. Build it if there’s an actual business case. – Idan Maron, Applicaster
11. Not Thinking About The Benefits For Your Partner
Successful business development folks think about how to build long-term, mutually beneficial partner relationships. It’s easy to sit around and discuss how various partnerships will benefit your own organization. What’s not always obvious, but is a key ingredient for a successful partnership, is to have a compelling answer to the question, “How does this benefit our partner?” – Matt Daniel, WayBetter, Inc.
12. Failing To See Each Partner’s Value
They fail to see the benefits that each offers the other. If a partner can not clearly define to the other the value they will contribute, then the partnership will be a waste of time. On the other hand, if value can be found and common customers can be identified, then the partnership can expand opportunities that make the sum of the parts greater than the whole. – Adam Feiner, FirstFuel
13. Misrepresenting Your Organization’s Capabilities
Not being transparent about expectations and internal limitations is a big mistake. Misrepresenting your organization’s capabilities is a classic recipe for failure down the road. – Kabir Mathur, Kiip
14. Having Only One Point Of Contact In An Organization
One mistake that can lead to failed relationships is not having multiple contacts within a partner organization. Whether it’s during the early phases of structuring the partnership, or in the later stages of an established deal, having your one contact leave the organization can be a disaster if you don’t have other channels to explore. – Jonathan Yagel, Spire Labs
15. Focusing Too Much On PR, Too Little On Strategy
I often see people focus too much on the PR or launch and too little on ensuring the companies are aligned on a strategy that creates value for both companies in the longer term. – Scott Porter, Box