By: Joseph Pastore

Whether it involves two parties or more, a business partnership has followed a certain convention of thought for decades.

Start with a comprehensive business plan and a business partnership agreement with clear, understandable metrics that capture the sense of accomplishment for your alliance. Systems and procedures should be part of the overall structure built for success.

That’s the winning recipe, right? Well, not necessarily. Researchers Jonathan Hughes and Jeff Weiss, who authored “Simple Rules for Making Alliances Work” in the Harvard Business Review, believe more rules are needed to improve the long-standing fail rate for business partnerships, which hovers around 70%. Although the research focuses on corporate alliances, it has implications for the intricacies of business partnerships.

Based on their findings, the researchers propose several complementary rules to elevate conventional wisdom.


Business Partnership Insight: Place more value on working together

A solid business plan and contract are crucial, but those two instruments alone are not enough. When it comes to business partnerships that fail, the paperwork is rarely called into question while communication and trust grind to a halt.

Diversity of ideas is one of the benefits of starting a business partnership. Aren’t two heads still better than one? More ideas often lead to more opportunities and improved efficiency.

The notion of working together implies two-way communications that can counter many possible negatives associated with business partnerships, such as confusion. Of course, the business partnership agreement would spell out areas of responsibility. But once you drill down to day-to-day activities, it can quickly become gray areas that fester. Is your partner really working as hard as you? Is he moving into my area of expertise, which could create further internal conflict?

Hughes and Weiss recommend that alliances, such as business partnerships, put less emphasis on the business partnership arrangement and more energy behind the working relationship.


Business Partnership Insight: Highlight Progress, Goals

Building a successful business partnership is a process. The wins don’t happen overnight, especially when the relationship is a new one.

Achieving desirable outcomes takes an investment of time, money and third-party resources that come in the form of more relationships, which most likely will be time-consuming and inconvenient—although worth it. In a practical sense, this effort, which could take 12 months or multiple years, could lead to barren monthly reports for the foreseeable future.

Blank reports can lead to lower morale and lost confidence. It would also feed a popular negative about business partnerships, which centers on personalities. When interacting with another person, you will have to navigate their quirks and emotional levels on a daily basis. In sports, it has been said that winning is the best deodorant because everything smells bad when you are losing. A slew of negative reporting, especially at the beginning of a project or relationship, could tip the scales in the wrong way.

Researchers urge business partnerships to place emphasis on “means” metrics as opposed to “ends” numbers. For psychological reasons, highlighting the road to success will go a long way to sustaining the effort so all partners feel the initiative is moving forward—although not complete yet.


Business Partnership Insight: Transform Differences Into Opportunities

Matching strengths and differences are often driving forces why two parties should partner together.

However, the difference in backgrounds and experiences can quickly turn into a negative for the business partnership. Assuming one way to solve a problem at another company would work in the current partnership may be naïve. Resenting the other partner without working toward finding common ground would be unproductive.

The researchers reference a real-work example of two companies partnering in an alliance when good faith and communications started to break down. Company executives created working sessions with team members from each company to address differences between the companies. Individual competencies and culture were issues that topped the list, which is why so few were initially open to joining the conversation. When the negatives were highlighted, the reluctance stopped and team members began to provide frank feedback, which ultimately turned the tide and allowed the two entities to work more closely together.

Eliminating differences and embracing collaboration serve as the third complementary rule from the researchers.


Business Partnership Insight: Find Collaboration Beyond Structures

In most situations, corporate structure is a framework that leads to positive outcomes. Sometimes, however, it can feed the blame game when surprises become negative.

There is nothing more draining to productivity than team members spending their energy pointing fingers and assigning fault to others. Instead, researchers recommend that the partners discuss how each contributed to the problem and what they can do to address it today and prevent it tomorrow. Refusing to tear down the other partner preserves the relationship, avoiding a situation where information could be withheld out of self-preservation—something that wouldn’t be positive for a company.

Reaching a stage of collaboration underscores the chief competitive advantage of any business partnership.


(Joseph M. Pastore III is chairman of Pastore, a law firm that helps corporate and financial services clients find creative solutions to complex legal challenges. He can be reached at 203.658.8455 or

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