Strategies for Go-to-Market Partnering Programs and Initiatives
"If you don't know where you're going, how will you know when you get there?"
- Casey Stengel, Hall of Fame baseball player and manager
This post is part of a series to help B2B high technology organizations improve sales and marketing channel partnering. In part one, you’ll get the key issue high-tech companies face when developing their partnering programs.
After witnessing, and, in past years being a party to, poor partnering practices by technology companies, I have developed a mental picture of the approach I would like to hear more often expressed by CEOs or BizDev executives:
"As a promising player in our area of enterprise software, we have long harbored a desire to become the leader in our product category, but we have been hampered by a number of factors, including an unclear market strategy, and a consequent inability to execute any plan effectively.
"Based on recent feedback from other players in the market, including potential business partners, it seems that a critical problem we face is the strong perception that we are not easy to do business with, and not able to follow through on our commitments to partners. In a market dependent on technological 'openness,' the willingness to collaborate formally with other technology-focused companies is undoubtedly a key component in every company's success, from Microsoft, Oracle, Salesforce, and SAP to the smallest start-up. In our case, we have clearly failed to build any value chain around our key products, and consequently, customers have been hesitant to buy from us, preferring to wait and see which of the potential winners can actually put a complete solution together in convincing fashion.
"Therefore, in order to accelerate the achievement of our corporate agenda, we have worked to define a new partnering approach that distinguishes between different types of partnership arrangements, and is aimed at enabling us to rapidly extend our reach and market penetration through an 'ecosystem' approach, rather than a verticalized, go-it-alone approach that confuses other companies and forces them to either be neutral or even hostile to us in critical marketing and sales situations.
"From now on, with respect to go-to-market partnering initiatives and programs, in particular, we are adopting an approach aimed at driving (a) a single strategic market dominance initiative requiring intimate partnership arrangements with one or two management consultants, integrators and/or ISVs; (b) as many as three to five tactical initiatives/programs involving three-ten product or service partners in total; and (c) any number of more casual relationships with third parties on an opportunity-by-opportunity basis, to be handled more often than not by our field organization.
"In order to execute effectively on this plan, we have defined a set of templates designed to help us manage our portfolio of partnering relationships, in addition to suitable rules of engagement for each type of partner, and a suggested process for managing and legislating each relationship. Finally, we are presenting a picture of how the organization should in our view look to reflect the commitments we shall be making to partners, and the skill sets and headcount/other resources we shall need to reallocate to manage the new strategy."
The reason I know that the above speech is still a dream, as far as most tech companies are concerned, is that, unfortunately, what we most often see in our industry is a style of 'partnering' that (a) fails to discriminate between different arrangements with third parties, (b) relies excessively on declarations of good intentions, and (c) therefore is 'set up' for one outcome - failure or, in the odd case, moderate success. It is no use just being optimistic in partnering activities, nor is it enough to publish a press release to announce that the alliance is going to dominate the world and solve world famine. In fact, this creates more harm than good, because each failed partnering experience poisons the well for all future such initiatives.
In this article, I shall describe some of the peccadilloes committed by many companies in today's marketplace (despite the avowed recognition that no one can make it on their own), then suggest where partnering fits, the kind of objectives it should serve, followed by examples of relationship types, the order of priority in which specific joint activities should occur and, finally, a short taxonomy of different partnering roles. Just to be clear about which forms of partnering I am addressing and which ones I am not considering in this article, let me remind readers that I am focusing my comments on just one of many types of alliance: go-to-market partnering, in other words, the joint marketing and selling efforts aimed squarely at achieving sales and conquering markets.
In contrast with other collaborative efforts as (formal or informal) knowledge-sharing agreements, technical alliances, or even mergers and acquisitions, this form of market-focused collaboration is undoubtedly a critical tool for increasing revenues and maximizing market power in today's high-tech marketplace. Equally, undeniably, it almost always fails to deliver the expected results, disappoints stances a disappointing initiative, most often resulting in recrimination between erstwhile allies regarding stated (or unstated) expectations of joint success have been completely or largely missed. I have compiled below four examples of common mistakes that either result from, or directly cause, a lack of clarity, and thus usually missed expectations, in either the strategy or the implementation of partnering initiatives.
- Executives get together and 'do' lunch: This is usually where the trouble starts. In a typical scene, a key executive from company A meets with their opposite number from target partner X, and the two quickly agree to an ambitious joint revenue objective, as in this sample dialogue: "There's no reason why our two companies cannot do a couple of (hundred) million in business jointly, so why don't I get my people to talk to your people and we'll get something going." As soon as each executive returns to their respective office, they get their biz dev or field alliance people scurrying to set up a joint program, which usually requires the use of time and resources to put a campaign in place, and before you know it, a lot of resource has been initially spent on positioning, messaging, issuing press releases, and even drawing up legal agreements.
- 'Press-release' partnering: Speaking of press releases, this is the strategy in which all efforts are focused on producing a joint release quoting executives from both companies saying that, in light of the enormous synergy between their respective offerings and markets, they have agreed to a 'strategic alliance.' This tactic, once so prevalent during the bubble, is in most cases a criminal waste of energy and a sure way to make partnering fail - because it is almost never accompanied by a clear statement of which specific target market the alliance is going to address together, and why on earth anyone should take the resulting marketing campaign seriously.
- Companies are not honest about their agendas: More often than not, organizations make vague statements of intent and end up making difficult-to-fulfill resource commitments to each other. If instead of basing everything on general aspirations such as 'better serving the market,' they stated clearly what specific market needs their partnering initiative would be serving, and if they each set out to understand the other's agenda, the track record of company-to-company collaboration in the high-tech industry would be quite different.
- Everyone's a 'partner' and everyone's 'strategic': What's in a name (or term)? Well, in partnering, I would argue that everything depends on each side being clear with the other(s) about how important the relationship is because all relationships are most certainly not created equal. In other words, it is vital that when companies come together to help each other achieve greater success in the market, they should be crystal clear about what kind of collaboration they are prepared and able to deliver, and what kind they expect. While many business developments encourages an ambiguous situation in which virtually every partner is considered to be 'strategic' (whatever that means!), the near certainty is that very few of the partners will receive or contribute the attention or resources that such designations confer on the relationship.
Where Partnering Fits in Company's Business Priorities
So, as a matter of perspective, where does partnering fit in any technology company's order of priorities? In first place, there is the company's own goals and agenda, i.e, to maximize its power (as measured by market capitalization, revenue growth, and/or profitability) by winning dominant share in specific target markets as well as more moderate share in many markets; next comes the specific market penetration or dominance strategy; as a part of which, partnering can be a critical vehicle to accomplish the objective, possibly alongside M&A, outsourcing, subcontracting and straightforward purchase of products or services, all of which are means of 'acquiring' the necessary resources to make something good happen.
Thus, in contrast with all the hyperbole that companies indulge in about the need to partner to serve others, go-to-market partnering occurs in order to serve key objectives in each company's corporate agenda - in fact, it is critical not to lose sight of this guiding principle, because it is what provides the required measure of 'enlightened self-interest' to motivate partners to follow through on the commitments they make to each other. Below are some specific motivations that belong on the list of key reasons for go-to-market partnering initiatives and programs of all types:
- Increase share and even gain dominance in specified target markets
- Gain access to markets and customers we could not do without a partner
- Accelerate or shorten sales cycles
- Build power in your value chain or ecosystem
Therefore, if given go-to-market partnering initiative or program does not significantly enhance your chances of achieving one of these objectives, then I suggest that both sides should ask the question "why bother to invest in it?"
In Part II, I will cover the types of partnering relationship to serve corporate strategies, the order of priority of key engagement activities with each partner, and the taxonomy of go-to-market partners.
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