Where's This Relationship Heading?
Best Practice Workgroup Report: B2B Business Arrangements
- Susan Dineen
- Steve Johannsen
- Kevin Hickman
- Tony Larson
- Tim Lerdahl
- Bill Mitchell
- Carolyn Tretina
- Derrick Van Mell
Who hasn’t entered a “strategic partnership” only to later discover a clash of expectations? A colossal waste of time at best. Covid accelerated the growth of B2B collaborations of all kinds, so The Center’s Best Practice Workgroup #1 combed through this complex management practice.
- There are different kinds of B2B arrangements. Confusion is costly, so get the definitions right.
- Many B2B arrangements begin with wishful thinking and enthusiasm. That’s too bad.
- Like marriages, it’s important to start well.
Definition and clarifications (see 1.2.3 Affiliation in The GMs Index)
Definition Creating, monitoring and managing a formal or informal arrangement between two organizations for a specific purpose. A consortium is generally for more than two organizations.
Types of B2B relationships
- Vendor : Vendee
- Affiliation and consortium
- Joint venture
- Association and chapters
Start with trust and trial
At least outline goals and governance ideas (see Criteria, below). Write an NDA. But don’t forget to take time in the beginning to build personal relationships. Without trust, you’ve got nothing.
There should be a risk assessment and a well-define trial phase. And there’s nothing like drafting an imaginary press release to get everyone to imagine the reality of what they’re discussing.
Tell me again: why are we doing this?
Your idea to collaborate might spring from one idea, but perhaps there could be several reasons.
- Leverage each other’s brands to expand awareness
- Lock in cost or price advantages
- Mitigate risk
- Share resources
- Expand geographic reach
- Share each other’s intellectual property
- Fill expertise or workload gaps (e.g., outsourcing)
- Share effective referrals
Elements of governance
Managers will overlook the obvious from a naïve hope that the other people will make your problems go away.
- Prioritized list of goals
- Decision-making process
- Conflict resolution
- Protocols for communication, evaluation and reporting
- Allocation of resources: money, time, IP, facilities
- Goals and budgets that allow flexibility
- Quality standards
- Delegation of duties and planning
- Exit and termination process
Characteristics of success
All parties should benefit consistently, through sometimes it will seem one party’s getting more than the other. Clearly, the relationship should be meeting its stated goals. Other indicators of success to keep looking for are:
- Generating new ideas, perhaps even new affiliations
- The common work has momentum
- A good culture starts to develop
- It’s enjoyable
Managing a collaboration deserves the same attention as managing internal projects. Don’t forget to celebrate success together!
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The Center for Management Terms & Practices is the standards body for general management. Our mission: Help people achieve great things together. See The GMs Index and The GMs Toolkit for the standard terms, tools and best practices.