Developing and Managing Partners
- 1. Copyright 2012 Thomas Burky Rigour.systems@gmail.com 1 Why Develop Partnering Relationships and How Do I Manage Them?
- 2. Often businesses need to share the risks of new growth product development Partnering is a force multiplier that can be applied to many business areas Leverages strength and competency of diverse businesses Increases market intelligence Spreads risk across multiple businesses Partnering is part of Product Management discipline 2
- 3. Develop descriptions of competencies in the value network that have well defined handoffs or interfaces Conversion of raw material into basic components Assembly of subsystems Integration of subsystems into product or product components Integration of hardware and software Marketing Sales Distribution Installation / Service Decommissioning or recycling 3
- 4. Generate a rough estimate for the business volume associated with each business segment Generate a rough estimate for the product development effort associated with each segment Market assessment R&D Manufacturing engineering (product and packaging) Transition to production Installation / Fulfillment Training of service network 4
- 5. How much of the development can you afford to undertake? What are the resources available to you? Staff Facilities / Equipment Enabling technology Defendable IP Capital Market position / knowledge Time to market What is the risk/reward of retaining control over each segment versus partnering? 5
- 6. Have key product features (enabling technologies) that will allow them to really boost their part of your product Share your ethics and culture You need to be able to get along with them at the working level regardless of the size of the organization Are respected in the marketplace If they are embroiled in lawsuits with their current partners, this is not a good harbinger for your relationship Typically are not direct competitors 6
- 7. Approach these prospective partners one at a time with the non-proprietary, rough business case to gauge their reaction Allow time for them to digest and understand the impact of what you are proposing in terms of the product and their segment of the value network If they don’t bite on the opportunity, then part amicably and move on to another partner They may come into play at another time or may reconsider the opportunity later 7
- 8. As the relationship develops, expose them to more of the picture so that they understand their part and how they fit Start slowly with non-binding agreements and as you gain trust for one another work towards a contractual agreement for co-development and production with the business segments carefully defined Don’t get your legal department directly involved too early Wait until the trust is there and the business principals are in general agreement 8
- 9. As the relationship matures: Update the business plan for the product as new information becomes available Be prepared for this because information can flow very quickly sometimes! 9
- 10. One unintended consequence of having good partners is that you, as a team, may decide to abandon the development Negative market or technical feasibility information results from the team analysis May be a natural consequence of broader perspective that partners will provide as part of their contribution 10
- 11. It’s OK to kill a product development if it is does not meet the expressed market need or is not technically feasible It’s better to “fail” when it is small and survivable Don’t completely disband the team or the interaction You have identified good companies that you may be able to partner with on other opportunities 11
- 12. Greater resources for market assessment and product development Better business intelligence and decision making More market power Agility Speed Impact Reduced overall risk (everyone invests) Reward is divided equitably (everyone gains) 12