5 Types of Strategic Partnership Models to Achieve Greater Results

5 Great Types of of Strategic Partnership Models

Introduction

Strategic partnerships are integral to modern business strategies, and they offer a versatile framework for achieving greater results. When considering the multitude of partnership models available, it's crucial to align the chosen type with your specific business needs and objectives. These models provide innovative ways for separate companies to collaborate and capitalize on shared strengths and resources, ultimately leading to sustainable growth.

One prevalent model is the technology partnership, where partner companies with complementary technological expertise come together to develop and integrate cutting-edge solutions. This approach fosters innovation and can be especially beneficial for a growth company seeking to stay competitive in a rapidly evolving market.

Another widely adopted model is the strategic alliance, which encompasses various forms of collaboration, such as joint ventures, equity partnerships, and non-equity partnerships. These alliances allow businesses to pool resources, share risk, and tap into each other's customer bases, enhancing their market reach and competitive advantage.

The concept of a strategic partner is central to these models, as they are the entities with which your company forms these alliances. These partners can range from suppliers to distributors, service providers to fellow businesses in your industry, and even cross-industry collaborations that open new opportunities.

In the world of business, it's essential to understand that these partnerships are not just about shared resources or market access. They often involve a deeper integration of business models and strategies.

Ultimately, the choice of partnership model should align with your specific target audience and the channels you intend to leverage to reach them. Effective partnerships can provide a significant boost to your go-to-market strategy, enabling your business to expand its reach and achieve greater results in a competitive market landscape

What Makes for a "Strategic" Partnership in Business?

Strategic partnerships are the cornerstone of effective business strategies. These collaborative endeavors, often referred to as marketing partnerships, exemplify the power of planning and foresight in achieving success. To embark on this journey, the first crucial step is the identification of your ideal partner. This process involves a comprehensive assessment of why they are well-suited to promote your offerings to potential customers, what aligns them with your brand and its culture, and where their reach could effectively introduce your product or service.

The first step you need to do in order to identify your ideal partner is to ask several questions:

  • Why are they suitable to propose what you sell to potential customers?;
  • What makes them the right fit for your brand and its culture?;
  • Where would they end up selling your product or service?‍

strategic business partnership model

Within this intricate planning, the business aspect is deeply ingrained from the outset. It's an integral part of the partnership's foundation. The key lies in ensuring that your ideal partner's target audience, whether it's a tightly knit small business network or a broader, expansive audience, closely matches your ideal customer profile. This alignment creates a symbiotic relationship where both parties stand to gain.

A strategic business partnership, therefore, embodies the essence of cooperation between two or more companies, rooted in the principles of mutual benefit. The emphasis here is on mutual benefit rather than exploitation. Such partnerships are built on the premise of harnessing the collective strengths of all sides involved, working collaboratively to ensure the sustainability of the partnership, with the ultimate goal of achieving both financial gains and long-term success.

What Types of Strategic Partnerships Are Out There?

When embarking on a new business venture, one of the "obvious" choices is to form a partnership that involves the splitting of equity among one or more business partners. This approach allows for the distribution of risk associated with launching a new venture, offering a collaborative means of sharing responsibilities and resources.

Nevertheless, it's essential to note that this type of partnership falls under the purview of various laws, contingent on the specific country of operation, and it comes with its distinct set of rules and legal requirements that must be diligently addressed.

For companies operating in the B2B domain, particularly those that have already surmounted the initial hurdles of gaining traction in the market, the focus often shifts toward "channel" partnerships, in contrast to the more conventional equity-based business partnerships. These channel partnerships concentrate on external providers and collaborators who share a common brand vision and have the capacity to deliver added value to your customers.

Unlike the internal shareholding structure of traditional business partnerships, channel partnerships emphasize the establishment of synergistic relationships with external parties, thereby extending the reach and impact of your offerings while fostering an environment of mutual benefit for all sides involved.

How Does a Channel Partnership Work?

Channel partnerships represent a dynamic form of strategic collaboration between companies, facilitating the alignment of external providers with performance metrics closely tied to your product. This synchronization optimizes their existing marketing and sales endeavors, ultimately bolstering their profitability and generating a favorable return for all parties involved.

Typically structured on a tier- or contract-based model, these partnerships are forged with clear objectives in mind, with the partner committing to specific goals that the provider actively supports achieving.

strategic business partnership model

The core principle behind channel partnerships is the cultivation of an external salesforce, extending beyond the confines of internal efforts. This strategic approach permeates even the smallest business communities that may otherwise remain beyond your reach, broadening your market influence. However, it's essential to recognize that initiating a business solely through a channel partnership is not the recommended path.

Instead, it's advisable to possess a profound understanding of your target market before committing to such a partnership. This prerequisite arises from the necessity of equipping external providers with the knowledge of what resonates with the target market and what information should be communicated, ensuring that expectations are managed effectively and the partnership's success is maximized.

strategic business partnership model

5 Business Partnerships To Consider in 2021

There's no shortage of examples today of what a successful channel partnership looks like. However, there are 5 specifically which are worth your time more than others.

Business Partnership #1: Affiliate Program

Affiliate partnerships , a relatively novel addition to the array of strategic collaborations between companies, possess the extraordinary potential to magnify the scale of a channel program by several orders of magnitude. The influence of individuals who have successfully garnered the attention of hundreds of thousands of highly engaged followers translates into a readily responsive audience poised for conversion.

Nevertheless, the critical facet of affiliate marketing hinges on the harmonious alignment of the right influencer with the right product or service, as a misalignment could jeopardize both the influencer's reputation and the credibility of the offering. This underscores the delicate balance of reputation and reach that defines this facet of marketing partnerships.

To establish a thriving affiliate program, several key steps must be undertaken. Firstly, a profound understanding of the required size of an influencer's engaged audience is paramount to assess whether reaching out to them is a worthwhile endeavor. Additionally, the prioritization of the channels through which you wish to appear and the desired perception you seek among the target audience are strategic considerations to be made prior to making any overtures to potential affiliate partners. Furthermore, it is advantageous to initiate contact with influencers once you already have an affiliate program in place. Doing so sets clear expectations from the outset, preventing protracted negotiations over compensation.

The implementation of PRM software tools, such as Kiflo , can facilitate the structuring of affiliate tiers and commission per sale, streamlining the onboarding process for influencers. By providing direct sign-up links, affiliates can seamlessly become part of your program, and you can actively guide them through the intricacies of promoting your product or service to their audience in a natural and unforced manner.

Crucially, the journey with affiliates extends beyond the initial engagement. Well-constructed affiliate contracts typically outline a predetermined number of appearances, ranging from 5 to 25, ensuring a sustained and fruitful partnership that continually reinforces the marketing impact on both sides of the deal.

Business Partnership #2: Co-Branding or Co-Marketing

Co-branding, a strategic marketing approach, involves the collaborative efforts of two entities coming together for specific marketing initiatives, encompassing a wide array of content marketing forms, such as guest posts, webinars, eBooks, research papers, and more. In recent years, B2B companies have displayed a heightened acumen in capturing audience attention through the art of invitation, especially when engaging industry experts in casual "chats" or webinars.

This approach serves as a potent catalyst, eliciting genuine interest not only from the expert's established audience but also from the companies themselves, creating a symbiotic relationship that typically yields beneficial outcomes for all involved.

To ensure the success of co-branding endeavors, a set of best practices should be conscientiously adhered to. Firstly, it's imperative to maintain a clear agenda, regardless of the nature of the proposed collaboration. This ensures that the partnership remains purposeful and aligned with its intended goals.

Equally significant is the need to exercise patience in the production process; it's essential to refrain from rushing into content creation unless one genuinely believes in the value it will deliver. Taking the time to comprehensively comprehend the points of convergence between the two collaborating brands and presenting them as an upsell can enhance the overall efficacy of the co-branding effort.

When executed with precision and dedication, co-branding emerges as an astute partnership strategy that can trigger a cascading effect, leading to invitations to industry podcasts and, ultimately, driving substantial revenue for the businesses involved. This strategic synergy often amplifies the reach and impact of each brand, contributing to a mutually beneficial, thriving partnership.

Business Partnership #3: Referral Program

Distinguishing itself from the customer referral program, this strategic partnership model is rooted in the premise of encouraging partners to refer their established business network to your company actively. In return, partners receive a percentage share of each sale or a one-time referral fee, creating a dynamic that goes beyond simple customer recommendations.

Unlike affiliates, who often address a broad audience, referrers operate with a more targeted approach. They deliberately channel highly qualified customers your way and, in doing so, effectively set the expectations on your behalf.

strategic business partnership model

This distinctive mode of partnership not only translates into the acquisition of new business seemingly out of thin air but also endows the referrer with a unique role as an advocate for your company. Their endorsement carries a level of trust that can be unparalleled by other partnership types, fostering a deeper connection between your brand and the referred customers. This depth of engagement is typically rewarded with longer-term commissions, signifying the lasting impact referrers have on your business growth.

For instance, consider a scenario where a customer is referred by one of your partners. In such cases, the partner may be entitled to a substantial 20% of the recurring revenue generated from that particular deal for up to 6 months. After this initial period, the commission might taper down to 10%. Depending on the pricing of your product or service, this can amount to a significant financial incentive, making it an appealing proposition for partners who are keen to promote your offerings and cultivate a lasting referral relationship actively.

Business Partnership #4: Technology Integration

This distinctive form of partnership thrives when your business boasts a technology product with the capability to support integrations, much like a robust platform. The foundational pillar of this partnership lies in providing your partner with comprehensive developer documentation, enabling them to create a tailored solution that augments your existing features and extends the functionality of your product.

strategic business partnership model

There are various of technology integration examples:

  • Airtable's marketplace - A place to build an app on top of a powerful project management tool that is used primarily by marketers around the world;
  • Zapier's "Platform" - A fully automated development environment to integrate any app with Zapier's famous software that makes automation accessible to anyone;
  • ActiveCampaign's Apps - A single spot where 100s of third-party apps are listed as one of the most trafficked email marketing tools available on the market;
  • Freshworks - A software solution to help businesses improve and manage their customer experience, sales, marketing, IT, and HR management in a simple and effective way, along with a successful partner program for SMBs in the B2B tech industry.

In essence, technology integrations represent a more advanced and sophisticated type of partnership, ideally suited for software tools that possess a platform-like structure and offer a certain level of functionality. These integrations often transcend the realm of basic software collaborations, delving into the intricacies of code and seamless interactions between different systems, thereby enhancing the overall user experience.

Even for smaller SaaS companies, the realm of technology integrations holds immense potential. They can leverage this approach by integrating key third-party applications directly into their ecosystem. This strategic move not only enriches the value proposition of their product but also assembles a more comprehensive and enticing package for specific user segments.

This way, technology integrations become a powerful tool for enhancing the attractiveness and functionality of the software, ultimately serving the broader goal of meeting the diverse needs of their customer base and remaining competitive in the market.

Business Partnership #5: Reseller Program

Undoubtedly, one of the most potent and multifaceted forms of business partnerships for B2B companies is the reseller program. This type of partnership represents the apex of third-party channel collaborations, involving a holistic and comprehensive approach that essentially initiates from ground zero and embarks on the transformative journey of turning a lead into a loyal customer.

Reseller partners occupy a unique position within the realm of third-party partnerships, as they demonstrate a remarkable level of commitment to a specific third-party offering. Their dedication extends beyond mere affiliation; they willingly incorporate the partnered product or service as an integral component of their own sales pitch. This strategic choice significantly elevates the intricacy and depth of their work, as they are entrusted with representing and advocating the value and utility of the offering to their own client base.

However, the substantial investment of effort and resources made by reseller partners in integrating the third-party offering into their sales approach comes with the potential for substantially higher returns. This elevated level of involvement and commitment often yields enhanced rewards, particularly when they successfully close a deal.

Through their intensive engagement with the partnered solution, resellers not only expand the reach of the product but also establish a compelling sales channel, fostering trust and credibility among their clientele. This deep level of collaboration underscores the transformative potential of reseller programs in boosting revenue and extending market presence, making them a cornerstone of success for B2B companies.

strategic business partnership model

Scale Your B2B Company with a Channel Partnership

Forming a well-suited strategic alliance opens the door to a wealth of opportunities and invaluable insights that can significantly enhance your brand. These alliances are a potent avenue for generating more revenue and increasing the exposure of your products and services in the market. Whether your primary goal is to reduce operational costs or to create greater brand awareness, a strategic partner can play a pivotal role in helping you scale your business, allowing you to tap into new markets and leverage additional resources and expertise.

To effectively harness the potential of these strategic partnerships, you need a structured approach to manage and organize these collaborations. Kiflo provides you with a comprehensive solution to maximize the potential of your partner relationships!

From the initial stages of partnership formation to the final roll-out and ongoing management, Kiflo streamlines the entire process, making strategic partnerships more accessible and efficient for all parties involved. It achieves this by keeping partners engaged, fostering collaboration, and providing you with full visibility into their performance.

With Kiflo, you can gain valuable insights, track progress, and ensure that your partnerships are delivering the desired results.

Experience how Kiflo PRM helps SaaS SMBs to scale, manage and grow partner revenue.

Looking for inspiration to never stop learning.

strategic business partnership model

5 Best Practices of Deal Registration in a Partner Program

strategic business partnership model

7 Steps You Need to Apply For a Successful Channel Partner Strategy

Your right to know, what is a strategic alliance, what are the models of strategic alliances, what are the 4 stages of building a strategic partnership, what are some alliance examples and equity alliances, what is a strategic partner, still have questions.

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Business tips

16 ideas for developing strategic partnerships

Experts weigh in on how to build strategic partnerships that last..

Hero image with a person with arrows all around them (skills)

Building strategic partnerships is key for any growing business. We asked experts for their tips on how to build strategic partnerships, and this is what they said.

Look for overlapping core values

Establish criteria where both parties can win

Be confident

Conduct a partnership audit

Look for the right team at the right level

Show your product in action

Take your time

Build a personal brand on social media

Identify your business goals

Ask for an introduction

Know your target's other strategic partnerships

Find businesses with similar clients

Start with "what's in it for them?"

Demonstrate value immediately

Give more than they ask for

1. Make your pitch hyper-targeted

"To land a strategic partnership, ensuring that your initial outreach pitch is hyper-targeted to your future partner's interests is important.  

If you reach out with a generic pitch that isn't targeted to the potential partner, they are less likely to be interested. But if you can provide specific detail on why a partnership makes sense, your interest will soar.  

Most companies only have a few high-value strategic partnerships, so sending the right message to ideal prospects is essential."

Axel DeAngelis , Founder, NameBounce

2. Look for overlapping core values

Greg Gillman pull quote about strategic partnerships

"You may be in synergistic industries, but a strategic partnership has to begin with shared core values . Much like personal relationships, there will always be differences between businesses, but if there are not enough shared goals, visions, or values, then any long-term partnership can be doomed to fail, no matter how promising it may look on paper.

Therefore, when looking to partner with other businesses to enhance your offering to clients, really get to know the solutions in which your customers place their trust, as well as the competitive landscape, to ensure they’re working with the best options available. In doing so, you will gain the valuable information you need to identify businesses that share your core values and build a partnership that benefits both you and your customers."

Greg Gillman , Chief Revenue Officer, MuteSix

3. Establish criteria where both parties can win

"When looking to partner with another company, it's important to remember that you are looking for a relationship, not just a transaction. That means you should look for a company that has similar values and goals as your own. You should also be willing to make concessions in order to make the partnership work.

Of course, you don't want to make unlimited concessions just to make the deal work. In my first company, WriteLab, we formed several strategic partnerships with companies in Asia, licensing our technology to power their products. Aside from visiting and spending time with them, we focused on developing an objective set of criteria we believed would help us facilitate our negotiations. In this way, we could negotiate on the merits and not succumb to tactics of positional bargaining or appeals to relative power. By negotiating on objective standards of value, price, and access, not only were the deals much easier to close, but both parties felt they got a good deal."

Matthew Ramirez , CEO, Rephrasely

4. Be confident

"Confidence remains one of the most attractive traits in general and can play a major role in securing a promising collaborator. 

If you want to land a strategic partnership that will be a golden ticket to join the industry's top dogs, own your ideas and show that you have full confidence in their potential. Add to that a bit of charisma, and you will undoubtedly catch the attention of potential strategic partners."

Natalia Brzezinska , Marketing & Outreach Manager, US Visa Photo

5. Conduct a partnership audit

"Strategic partnerships changed the way I do business. The one tip for landing a strategic partnership is to conduct a partnership audit. Prior to establishing partnerships, you want to be sure that you evaluate your partnership potential. 

This audit will allow you to take an inventory of the current state of your business and determine if you are prepared and positioned to establish, secure, and retain strategic partnerships. Once you complete the audit, you will discover whether you are ready to share your vision with your ideal powers, or if you should focus on restructuring elements of your business. If it's the latter, concentrate on nurturing the relationship with your prospective partner before you try to pitch."

A. Margot Blair , Author, Educator, and Strategic Advisor, AMB Consulting & Co.

6. Look for the right team at the right level

"It can be tempting, when you're looking for a strategic partnership, to go to the biggest company and solicit their services. They have thousands of people and millions in profit. They must be the best option, right? Unfortunately, it's often not the right choice. Small to medium-sized businesses are a blip on the radar for these enterprises, so you will talk to a junior person or team without the benefits of a tailored approach. 

When you partner with a company that is smaller, you're more likely to get an agile team of experienced strategists who have your best interests at heart and who can adjust their approach to suit your needs. Bigger is not always better."

Matthew Stibbe , CEO, Articulate Marketing

7. Show your product in action

"Showcasing your product in action is one of the best ways to land a strategic partnership. When a potential partner can see how your product is being used, they'll be able to better understand its value. 

In addition, seeing your product in action will give them a taste of what it's like to work with you and your team. If they like what they see, they'll be more likely to want to collaborate with you on future projects. 

So if you're looking to land a strategic partnership, make sure to put your product front and center. Show them how it's being used and let them experience its value for themselves. With a little hard work and some luck, you should be able to secure the partnership you're after."

Lorien Strydom , Executive Country Manager, Financer.com

8. Take your time

Gates Little pull quote about strategic partnerships

"The thing about strategic partnerships is that they take time. A deliberate effort to connect, strategize, and decide to collaborate will always take time, as two major parties are involved. The partnership needs to be mutually beneficial, and you just can't rush a good thing. 

Take the time to get to know your contacts at the partnership business and allow all parties to bring ideas to the table before putting ink to paper. If a potential partner feels rushed, they may walk, so court them a little and don't worry about how long it is taking. 

With this in mind, start early; giving yourself a few weeks or even a couple of months won't be enough, so plan ahead!"

Gates Little , President & CEO, altLINE Sobanco

9. Build a personal brand on social media

"Landing a mutually lucrative strategic partnership is only possible if you connect with the other party. Otherwise, everything is extremely transactional. What really helped me was building my personal brand on LinkedIn and connecting with other professionals, some of which are now my most valued partners. 

We often forget that we work with people, not companies, and we end up looking at partnerships solely through the lens of gaining. But at the end of the day, those decision-makers are still humans and still want to feel an actual connection with their strategic partners. 

The beauty of social media is that we can stay connected and top of mind by creating valuable content and offering actionable advice publicly, which definitely played a huge part in all of our partnerships."

Gordana Sretenovic , Co-Founder, Workello

10. Identify your business goals

"Landing a strategic partnership may be difficult for you if you don't know what you want out of it. So, I recommend you first clearly define your business goal before going for a partnership. 

You need to keep in mind what exactly you are trying to accomplish. Every successful enterprise looks for a partner that can help their business enter a new market, increase sales in an existing market, obtain financial or human capital, and improve access to technology.  

Further, define each point of your goal clearly about what you want to achieve from it. And be ready to give as much as you want in return. Plus, make a deal with a partner who can move full steam ahead."

Joe Troyer , Chief Marketing Officer, ReviewGrower

11. Ask for an introduction

"One tip for landing a strategic partnership is to follow networking best practices. Instead of doing a cold outreach, try to find a common contact between you and the company and ask for a warm introduction. 

The reason this introduction is important is that it vouchsafes you to the company as a valuable contact. When you follow this method, you want to make sure that when you reach out, you have a message that is tailored to the company and that you can provide value."

Kate Duske , Editor-in-Chief, Escape Room Data

12. Know your target's other strategic partnerships

"You can save a lot of time and effort by understanding the types of strategic partnerships your target(s) like. Do your research and find out—for each potential partner—what other partnerships they have. This will tell you:

If they are similar to you. If so, how?

Do they provide the same win-win that your partnership will provide?

Do they encourage strategic partners? Or would you be the first?

If you learn and understand your target's goals by reviewing the other strategic partnerships they've done, or have to date, you'll be way ahead of the game.

If partnering with you will provide similar benefits, talk about how. Their ears will perk up when you tell them you can provide the same—or better—results from a strategic partnership!"

Janet Granger , CEO, Marketing Strategist, Mentor, & Coach, Two Beagles

13. Find businesses with similar clients

"One tip for landing an effective strategic partnership is to find other businesses who serve the same clients or customers as you, but not in a way that overlaps with what you offer. The two businesses need to be complementary, but not directly competing. This is the sweet spot.

As an example, our email agency here at Ecommerce Intelligence tries to partner with other agencies, consultants, and service providers who work with eCommerce brands like we do—but don't sell our primary service. Companies selling services such as SEO, content marketing, or Google Ads are great potential partners for us. It would make sense to recommend each other's services to our respective client bases.

It's also a good idea to make sure any potential partner does not have immediate plans to expand their offering to compete with you directly."

Ryan Turner , Founder, Ecommerce Intelligence

14. Start with "What's in it for them?"

"Getting the attention of a potential strategic partner is really hard. That's why you need to start with 'what's in it for them?' A partnership should benefit both sides, but the other company doesn't care how you benefit from the partnership; they only care about how they benefit.

With the last SaaS company I sold, I wanted to offer add-on services on the backend of the software as an upsell. I didn't have the infrastructure to fulfill those services in-house, so I reached out to a few companies as potential partners.

In order for our partnership to work, they were going to have to give me big discounts on their services that I could mark up to my users. Of course, I didn't lead with that. I talked to them about how I had a bunch of users that were looking for their services and I was trying to find the right partner who could help my users out. This would be a huge revenue boost for them.

This approach got the attention of every company I reached out to."

Adam White , Founder, SquidVision

15. Demonstrate value immediately

"In order to build our partner marketplace, we needed to get strategic partnerships set up with companies that were much bigger and more established than we were. We learned early on that going to each of those companies and explaining our hypothetical value proposition was far less effective than coming to those companies with a real-life example of our value.

We help businesses shop for the right HR software platforms, and coming to the HR software vendors with actual live customers that were interested in their platform helped to grease the wheels internally and move partnership conversations around significantly faster."

Brett Ungashick , CEO & CHRO, OutSail

16. Give more than they ask for

"Strategic partnerships come down to being as present as possible, so you remain top of mind, just like in customer marketing and business development. Doing the work before they ask for it helps make it harder for a partner to say no to working with you. Build the sales enablement resources they need in different variations and formats.

Proactively seek event activation timelines or offer account introductions to those in their ICP (Ideal Customer Profile) to show you would put in more work on your end of the partnership. 

Being proactive and present are great ways to show a partner they should trust and work with you."

Charlie Riley , Founder & CMO, Charlie Riley

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Brett Farmiloe is the founder of Terkel, a Q&A site that connects brands with expert insights.

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strategic business partnership model

How to Build a Successful Strategic Partnership

Laura Richard — May 13, 2021

Over the past decade, Level5 has helped a number of clients establish strategic partnerships to deliver on key objectives and add competencies or capabilities identified as growth imperatives.

Partnerships have become more important than ever in the high-risk, uncertain environment that we’re all operating in today. Even so, the failure rate of partnerships is 60% or higher. So, why don’t most partnerships work? Our experience tells us that the answer lies in the lack of discipline. Too often, a partnership makes conceptual sense, but the parties don’t have the necessary frameworks to systematically consider, explore, structure and manage these relationships.

Before tackling how to set your partnership strategy up for success, let’s fully define we mean when we say “Strategic Partnership”.

By our definition, a Strategic Partnership is an agreement between two or more organizations that creates shared benefit and accepts shared risk of equal or similar value. While monetary exchange is often included in the structure of a partnership agreement, it’s not a requirement. In fact, some of the most powerful partnerships we have helped to establish were built through non-monetary value creation.

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Why organizations should consider strategic partnerships

With 68% of executives stating that they see partnership ecosystems as the only way to survive in today’s market , it would be easy to consider strategic partnerships as imperative for every organization.

At Level5 Strategy, we say not so fast.

Past experiences establishing successful partnerships have shown that these relationships serve a specific purpose; they should only be considered under the right conditions for success.

Factors that indicate a Strategic Partnership approach may be appropriate for your organization include:

strategic business partnership model

Your organization requires a new competency or capability that, while important as an enabler to future success, will not become foundational to your business model in the future.

strategic business partnership model

You’re pursuing a high-risk strategy and/or entering uncertain market conditions.

strategic business partnership model

Your brand doesn’t have permission to play in the areas you’re pursuing and you require another brand’s equity to endorse this evolution or transformation.

strategic business partnership model

You’re seeking to broaden your reach and engage with new audiences.

strategic business partnership model

Scenarios where maintaining independence of brand, processes and customer relationships is advantageous.

Rather than jumping into partnership exploration, organizations should establish a decision-making framework. This framework will help the leaders determine whether a new capability or approach is best delivered by building it internally, accessing it through an acquisition or vendor relationship, or partnering to deliver the value required.

Building strategic partnerships for success and longevity

Once you have determined that a strategic partnership approach is ideal for meeting your organization’s goals and requirements, leaders should consider Level5’s four pillars for strategic partnership success. These pillars should be leveraged when negotiating, implementing and managing strategic partnerships to ensure that your organization is aligned with best practices, while increasing your odds of success:

1. Articulate both sides of the value equation before seeking a partner

Outlining and quantifying the value that your organization is seeking, and the value that your organization can contribute to a partnership, will guide both the ideal structure of the arrangement and the preferred type of partner you’re seeking (size, industry, capabilities, etc).

2. Take the blinders off

Organizations often enter into agreements with partners that they’re familiar with. This is a limiting strategy. Generally, the value companies require is best found in a non-traditional sector or partner. Likewise, the value contribution is more frequently optimized by a partner whose business is quite different but who has complimentary capabilities.

3. Negotiate to assess fit, not simply to structure the relationship

In our experience, the number one reason that partnerships fail is a lack of alignment. As the partnership is being negotiated there must be alignment to shared objectives. Most importantly, organizations must assess whether their values and cultures will be supportive of a dynamic relationship during implementation.

4. Manage towards the partnership goal, not the contract

Linked to the principle above, partnership implementation rarely goes exactly to plan. With the variable of independent stakeholders, it’s inevitable that new learnings will surface and that they’ll need to be applied during deployment. Every successful partnership needs to adapt to these realities. Negotiate a rock-solid contract – and then set it aside in implementation! Managing a partnership based on defined objectives requires the creation of a shared scorecard, regular touchpoints to review the progress against the scorecard and flexibility to adapt your organization’s contribution to the relationship based on a constant feedback loop.

Strategic Partnerships can be powerful levers to drive tremendous growth. Take for example the partnership between Uber and Spotify. Uber users can sync their Spotify account and control the music they listen to during rides. This partnership has not only created a great customer experience, it has also opened access to the partners’ respective audiences, leveraging a unique value proposition to drive new customer acquisition. Success through strategic partnerships is achieved when organizations tackle the appropriate business objective with partners that have aligned values and complementary capabilities and assets. This is why the work required to establish the right frameworks and models can offer tremendous upside.

Laura Richard

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10 Steps to Attracting Strategic Partnerships to Grow Your Business

strategic business partnership model

System Architect | Pauline Martin-Brooks:  paulinemartinbrooks.com.au

Many of the most successful marketing campaigns in recent years are born out of successful strategic partnerships. Think Apple and IBM, the World Cup and Adidas, or Aussie music streaming company Guvera and Accor Hotels. And in today’s social media-obsessed consumer market, the most savvy brand marketersf orm alliances with online influencers to generate a buzz around their products and services.

Strategic partnership is one of the most time and cost-effective ways to enhance a brand, expand your market, generate new leads, increase revenue and grow your business. In a symbiotic fashion, it allows you and your partner to tap on resources that you wouldn’t generally have at your own disposal, resulting in a win-win collaborative experience.

Small and medium size companies like yours can also reap the benefits of partnering with other businesses, but it’s not as easy as it may sound. Some partnerships with the best intentions could end up failing for many different reasons. So, before you venture into any strategic partnership, it pays to know some important steps in identifying and attracting potential partners that will complement your core values, your brand, and your business goals.

Australia’s  “Partnership Queen”  and international bestselling co-author of  “Millionaire Mentors”  Pauline Martin-Brooks has made millions of dollars in revenue for the companies she’s worked for through what she calls joint ventures. Pauline’s first ever partnership took her six months to close and brought in 732 leads in an hour! After years of managing hundreds of successful partnerships, Pauline has developed a systematic process of identifying, attracting, and winning strategic partnerships to help scale up businesses. Eager to learn how?

Here’s her 10-step process on how to develop strategic partnerships that will help you grow your business in less time and more importantly, with less money.

Ways to Attract Strategic Partnerships for Business Growth

Step 1: Identify the types of partnerships that complement your core offering

  • If you get creative, there is no end to the businesses you can partner with. Here are a few suggestions: o   Affiliates – will work with you when they have the time and when they need the money. o   Content Partners and Blog Contributors – you’re sending traffic to them and they’re sending traffic to you. o   2-Way Referrals – the perfect partner who you can help and who can help you. o   Joint Webinars – where you present to someone else’s audience. o   Speaking Opportunities

Step 2: Do these things prior to starting a partnership

  • Make sure you have a great Lead Magnet / Freebie / Opt-in / Taster, etc.
  • Setup Facebook Pixel to re-target the people who don’t take action on your lead page.
  • Create a nurture sequence – have a series of small emails which build trust and directs them to blogs you’ve written. The more you can automate this, the better.
  • Video – have it on your About page and LinkedIn profile.

Step 3: Brainstorm your perfect product and services partners

  • Build a profile of your ideal partner. o   What compliments your core offering? o   What do people need before they need your products and services? o   What do they need after they’ve had your products and services?

strategic business partnership model

  • Make a list with the providers of your perfect product and services and rate them from top to bottom. o Subscribe to their opt-in form. o Download their Lead Magnet. Would you share it? o Repeat for 10–30 prospective partners.
  • Learn more about the prospective partners. o   Do they email their lists? If so, how often? o   Did they offer another product or service? If yes, make note of who they promoted as that may be another. o   Did they provide value through their emails? Rate it from 1 to 10. o   Did they provide value in their lead magnet? Rate it from 1 to 10. o   Does their messaging feel right to you? Rely on your gut. o   Does it align with their values? More importantly, does it align with yours? Tip:  Go through the journey you’re expecting your client to take.
  • Shortlist the prospect partners that rate highly, have great lead magnets and provide value. Suggestion!  Once you do the whole process yourself you can outsource the research of the prospects, list creation and shortlist candidates.

Step 5: Connect with your potential partners

  • Engage on other social media platforms – Connect on LinkedIn, join Facebook groups – share, like and comment.

Step: 6: Create a pitch that outlines the benefits of them partnering with you

  • What are benefits to you, to them and to clients? Win-win-win.
  • Who are you?
  • What are your values?
  • Who do you help?
  • What do you help them with?
  • Anything else that stands out about your company versus a competitor?

strategic business partnership model

Step 7: Prepare your post-call email template

  • Create a canned response: o   Re-iterate the benefits of partnering – “I know who you are, I know the value that you bring and I want to share it”. o   Ask about the next steps – how you can move forward. o   Don’t sell the sausage, sell the sizzle. Don’t put too much into the email. Be respectful of people’s time and energy. Example:   Thanks for your time. It was lovely to connect with you. I’ve been on your list for 6 months and I’m really impressed with what you’re sending out. I particularly love your lead magnet. I’d like to talk with you about sharing it with my clients. Tip:  This kicks off the law of reciprocity. The response will be “… what can I do for you?”

Step 8: Call the company you’re pitching to

  • Refresh yourself with their website / LinkedIn / YouTube channel and look for: products or services they offer, about page, team, values and testimonials.
  • You need to know: o   What the company does o   Who their raving fans are o   The quality of their lead magnet o   You are willing to share it

Tip!  The more you know about each other businesses the easier it will be to create a win-win partnership. Tip:  Try to speak to the business owner. Call at about 8.15 am to avoid the “gatekeeper”.

strategic business partnership model

Step 9: Keep Exploring and communicating – the fortune is in the follow up

  • Send follow up emails – stay in touch
  • Keep the communication open
  • Make sure you both know what the next steps are
  • When they are to take place
  • Who is responsible

No doubt strategic partnership is one of the keys to scaling up your business, saving you time and money. But before you jump onto the partnership bandwagon, be aware of potential pitfalls. Although many joint ventures are often successful, sometimes this is not the case.

It pays to get to know your prospective partners well. Do they share your core values? What makes your business unique and what value can you bring to the partnership? What benefits could they offer you in return? How do you approach potential partners, build rapport, and communicate your win-win strategy? The steps above will help you make informed decisions and reap the mutual benefits of partnering.

And remember, there’s no limit to the type of strategic alliances you can build. Sometimes the most unlikely partnerships are the most successful ones. So be creative, think out of the box and explore limitless possibilities by having that win-win and abundance mentality. You’ll be surprised at the results you’ll get!

strategic business partnership model

System Architect – Pauline Martin-Brooks

You might have heard of a free fast growth marketing strategy that savvy business owners have been employing for many years.

The strategy is known by several names, some call it Joint Ventures, others Partnership Marketing or Strategic Partnerships/Alliances or even a Joint Marketing Collaboration…no matter what you call it Pauline Martin-Brooks is the expert and has been doing it for nearly 15 years!

If you are looking to scale your business then you need to be rolling out this strategy in 2017.

In business circles, Pauline is known as the Partnerships Queen and she has been responsible for bringing in Millions of Dollars of revenue by focusing specifically on this one Marketing strategy. She has used it to fill both small and large entrepreneurial events, sometimes up to 2000 people.

She has co-authored an international best seller called Millionaire Mentors using the connections that she has created through Strategic Partnerships. She is a business mentor on several programs here in Australia, she also does keynote presentations as well as guest webinars and most of all she loves to connect good humans!

She’s a lifelong learner of all things marketing and most importantly she is here to help you get your ducks in a row so you can capitalise on this Strategy and scale your business.

Oh and she loves to dance and get out in nature as much as she can!

Website:  paulinemartinbrooks.com.au

strategic business partnership model

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strategic business partnership model

Partnering to shape the future–IT’s new imperative

When IT acts as a partner to the business, rather than as a technology consultant or supplier of IT services, the benefits are striking. According to the newest McKinsey Global Survey on business technology, IT organizations that play a partner role—that is, actively collaborating with the rest of the business to shape an overall business strategy that effectively leverages technology—tend to perform better on a number of dimensions, including the delivery of core services and the creation of a healthy organizational culture. 1 1. The online survey was in the field from October 13 to October 23, 2015, and garnered responses from 709 executives. Of these respondents, 422 have a technology focus, and the remaining 287 are C-level executives representing other functional specialties. The respondents represent the full range of regions, industries, company sizes, and tenures. To adjust for differences in response rates, the data are weighted by the contribution of each respondent’s nation to global GDP. But while most respondents, from both the business side and the IT function, believe the IT organization should be a partner to the business, few say IT plays that role today.

The results also suggest that the pressure on IT to perform will only increase with the growth of third-party services (such as cloud offerings and infrastructure as a service) and of digitization. With digital initiatives, too, the companies where IT plays a partner role are further along in both implementation and achieving business impact. The results suggest that the best opportunities for improving IT’s performance overall lie in strengthening the model the IT organization is structured, run, and managed around, and in defining more clearly IT’s role and priorities. Nearly all executives say acquiring talent is a challenge and a possible longer-term barrier to improving IT, which could require preemptive moves on the part of many companies.

Why partnership matters

We asked all executives about the role the IT function plays at their organizations—specifically, whether IT works as a partner to the business, a consultant on technology matters, or a supplier of IT services. Few say the IT function is currently a partner. But both in IT and in the business function, about three times as many executives believe IT should be a business partner at their organizations (Exhibit 1). The results show that when IT partners with the business, the benefits are far-reaching—and striking. We looked at 14 specific dimensions of IT’s performance and found that partnership has an impact on its effectiveness in each one—even for relatively standard (or less business-facing) IT processes, such as providing end-user services, managing IT infrastructure, and maintaining applications. Thirty-five percent of executives at companies where IT is a partner, for example, say the IT function works very or completely effectively with the business to develop new capabilities; only 14 percent say the same at companies where IT is a consultant or supplier.

In a few areas, the benefits of partnership are exceptional (Exhibit 2). For instance, at organizations where IT is a partner, respondents are more than three times likelier than all others to say that the IT function is very or completely effective at implementing bottom-up innovation and at creating a healthy IT culture. Similarly, in many other dimensions—from bringing new ideas to the business to delivering projects on time and digitizing business processes—the partner respondents are at least twice as likely as others to report that IT is effective.

That said, the results also indicate continued misalignment between IT and business executives on IT’s priorities, with little improvement over time. For the fourth survey in a row, the results indicate sizable gaps in how business and IT respondents view priorities for the IT function. In the newest survey, for example, 44 percent of those in IT say that cutting costs is one of their organizations’ current priorities for the function—behind only improving the effectiveness of business processes and tied with improving the cost efficiency of business processes (Exhibit 3). Business executives ranked cost cutting last, with only 16 percent citing it as one of their companies’ priorities for IT.

Pressure on IT and the partner advantage

IT organizations are under increasing pressure to deliver better performance—as the partners already do—partly because of the growing availability and capabilities of third-party services such as cloud computing, infrastructure as a service, and software as a service. About one-third of business executives see third-party providers as a significant or complete substitute for the IT function’s services.

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Another source of pressure is the expansion of digital programs. Nearly all respondents (91 percent) say their companies are already pursuing a digital agenda, suggesting that the partnership between business and IT will become only more important over time—especially with so many organizations in the early days of their digital efforts. At companies where IT plays the role of a consultant or supplier, a mere 14 per cent of executives say their companies have implemented digital initiatives across the business. Just one-third say the IT function and the business collaborate on these initiatives, while half report that IT either is completely uninvolved in digital or supports it only as a supplier of technology services.

By contrast, digital initiatives have already begun to thrive at organizations where IT operates as a partner with the business. Compared with their peers, respondents at these companies are roughly twice as likely to report that digital initiatives are being implemented across the organization, that the business impact from the initiatives has been significant, and that the IT function shares accountability for digital initiatives rather than simply playing a supporting role (Exhibit 4).

Redefining IT’s role

The results suggest that executives recognize the potential benefits of an IT–business partnership. So what is keeping organizations from establishing IT as an active partner? When we asked technology executives about the root cause of the function’s shortcomings, they most often identify weaknesses in IT’s operating model (how the function is structured, run, and managed overall), followed by a lack of clarity about IT’s priorities and role (Exhibit 5). These elements were cited far more often than the others we asked about: suboptimal technology, undisciplined IT delivery, and talent. This emphasis on the operating model and IT’s organizational role is not surprising, given how instrumental these two elements are in aligning the organization on IT’s priorities, developing a stronger IT culture, and establishing and operationalizing IT’s role as partner.

While talent doesn’t top the list as a root cause of IT’s problems, it continues to surface as a major obstacle to the function’s effectiveness, regardless of whether or not it works as a partner with the business. Almost all respondents (93 percent) say attracting IT talent is a challenge for their organizations, which in the longer term could pose a bigger barrier to improving IT.

Respondents say their most pressing needs for IT talent are in analytics and in joint business and IT expertise—areas they cited most often in the past two surveys—along with the cloud, mobile development, and cybersecurity (Exhibit 6). While four out of five of these areas are technical in nature, joint business and IT expertise could have an impact on future operating-model improvements and alignment between the business and IT sides on technology issues.

Looking ahead

At the highest level, align on IT’s role. Given all the pressures of implementing digital strategies and the advent of new delivery models, redefining the role of IT is rapidly gaining importance as a management issue. To move to a partnership model, a company’s senior leaders must first align on IT’s role (and what it means for the overall operating model). IT organizations and their business counterparts must then rethink the business–IT engagement model and processes, as well as decide how they can work together to implement large technology initiatives that support the business. In this new model, there are also talent implications for IT to address, specifically in the area of joint business and technology expertise.

Change hearts and mind-sets. Implementing a partnership model also requires a shift in mind-set from the leadership team down to the front line. True partners can proactively help the business to think about enabling technology and delivering IT services that truly fit the needs of both the business and customers. To reap the full benefits of partnership, stakeholders across the board must adopt a partner mind-set toward the services (and value) that IT provides rather than thinking of their IT colleagues as consultants or suppliers.

The contributors to the development and analysis of this survey include Naufal Khan and Jason Reynolds, principals in McKinsey’s Chicago office, and Christoph Schrey, an associate principal in the Chicago office.

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Wharton@Work

February 2012 |  Nano Tools  |  Strategy

Strategic Partnerships

Strategic Partnerships

Nano Tools for Leaders ® are fast, effective leadership tools that you can learn and start using in less than 15 minutes — with the potential to significantly impact your success as a leader and the engagement and productivity of the people you lead.

Contributor: Harbir Singh, The Mack Professor, Professor of Management; Vice Dean for Global Initiatives; Co-Director, Mack Center for Technological Innovation, The Wharton School, University of Pennsylvania

Determine what types of partnerships are the best match for your strategic goals, increasing your success in managing uncertainty, reducing risk, and driving growth.

All companies need growth strategies that minimize risk while enhancing their competitive positions. As the need to respond quickly to market opportunities accelerates, so does the difficulty and risk. And many companies don't have the necessary resources and assets available for a rapid response. Partnerships can decrease costs and increase flexibility, thereby minimizing risk. But many organizations are all too familiar with the risks of partnerships themselves; and when they avoid those risks by opting out they lose the potential of some highly advantageous alliances.

Wharton management professor Harbir Singh has developed a way to mitigate those risks — and realize the full advantage of partnerships — by employing the right kind of partnering strategy. Singh has identified three distinct strategies for successful alliances, each with unique strategic objectives, key success factors, and potential problems. By clearly identifying what you want to achieve through the partnership, and choosing the appropriate strategy, you can stretch your innovation dollars, share in the costs of investments, better handle uncertainty, and access new resources, capabilities, and markets.

  • A Window Strategy uses a partnership as a window onto new technologies or developments in your industry by providing access in real time to their progress. It's appropriate when there is a high level of uncertainty because it helps you stay in the flow of new ideas, explore multiple paths, and reduce uncertainty about possible alternatives. It also lets you understand new ideas and technologies without over-investing, keeping you agile in a fast-changing marketplace. Successful Window Strategy partnerships are formed with companies that are making promising progress on one or more of your strategic objectives. Potential challenges include leakage of your firm's technologies and managing a shifting web of partnerships.
  • The role of an Options Strategy partnership is to create real strategic options for the firm and/or build a capability platform by creating a combination of people, routines, and assets that can be scaled up or down. It's used when there is a moderate amount of uncertainty about which option(s) will ultimately succeed, because it lets you make a calculated bet without prematurely committing to just one option. For example, you can make moderate investments in companies with new technologies or services, with options to expand your involvement if the firm becomes a winner. The potential challenge of this strategy is that companies are often reluctant to shift quickly after investing.
  • A Positioning Strategy partnership is appropriate when there is a low level of uncertainty and you want to partner with another firm to create a best-in-class advantage. It can help you achieve scale- or scope-based advantages, optimize market segmentation, or acquire a new customer base. Successful Positioning Strategy partnerships are formed between firms with complementary capabilities who seek to create a combination with the best capabilities in the industry.

How Companies are Using It

  • The Medicines for Malaria Venture (MMV) partners with dozens of pharmaceutical and biotech companies to manage a large and diverse portfolio of antimalarial drug projects. MMV's partnerships are part of its Window Strategy, which aims to build a strong pipeline of molecules leading to new medicines needed to eradicate malaria. The strategy reduces the R&D timeline while increasing the number of potential effective medicines.
  • French oil and gas company Total works with partners to improve the efficiency of alternative energy source Dimethyl ether, methoxymethane (DME)'s direct synthesis process. Total is experimenting with pre-commercial production of DME fuel from a pulp residue known as spent liquor as part of a European consortium led by Volvo. This partnership represents an Options Strategy , in which there is some uncertainty about both the energy source and the most effective, economical, method of production. By working with the consortium, Total has the opportunity to access future winning technologies while committing a limited amount of resources.
  • Renault and Nissan began their highly successful partnership in 1999. The goal of their shared Positioning Strategy is to achieve ranking among the world's top automakers in terms of quality and value, new technologies, and profit. In an industry that experiences relatively low levels of uncertainty, the two companies together create positional advantages that neither could achieve alone.

Action Steps:

The following steps will help you determine which type of strategic partnership will help you best meet your needs and deal with current levels of uncertainty as they impact returns on the business.

  • Identify the goal(s) that you want to achieve from the partnership: (A) Do you need to track technologies or developments in your industry, learn what they mean, and stay in the flow of ideas? or (B) Are you seeking to create new options for the firm and/or build a capability platform? or (C) Are you looking for scale-based advantages, market segmentation, or a new customer base?
  • As you look at the level of financial and managerial resources you plan to invest in a new venture, consider both the magnitude and the level of uncertainty about the expected returns. The role, scope, and nature of alliances will change depending upon the degree of uncertainty faced by the firm. Are you experiencing (A) high levels of uncertainty, with a wide range of risky options for growth; (B) moderate levels of uncertainty, under which you can make some strategic bets on a narrower range of growth options; or (C) relatively low levels of uncertainty, when growth is possible primarily by increasing scope and/or scale?
  • Identify your partnering strategy based on your answers to questions one and two. "A" answers would lead to a Window Strategy; "B" answers to an Options Strategy; and "C" answers to a Positioning Strategy. Once you've identified your approach and your goals, clarify your partnership strategy and objectives with your potential partners to ensure that it will be successful for all and ensure a sustainable long-term alliance.

Additional Resources:

  • Wharton on Managing Emerging Technologies. George S. Day, Paul J. H. Schoemaker, Robert E. Gunther (Wiley, 2000). Includes a section on alliances that provides approaches for and examples of the three partnering strategies.
  • The Keystone Advantage: What the New Dynamics of Business Ecosystems Mean for Strategy, Innovation, and Sustainability. Marco Iansiti and Roy Levien (Harvard Business Review Press, 2004). Argues that companies can protect and ensure their own success, or undermine it, depending on how they foster the combined health of the network they operate in. Bases insights on "keystone species" in biology that work to proactively maintain the healthy functioning of their entire ecosystem because their own survival depends on it.
  • "When to Ally and When to Acquire," Jeffrey H. Dyer, Prashant Kale, and Harbir Singh. Harvard Business Review , July-August, 2004, 108-115. Provides a framework to help organizations decide between acquisition and alliance by analyzing three sets of factors: the resources and synergies they desire, the marketplace they compete in, and their competencies at collaborating.
  • Harbir Singh serves as Faculty Director of and teaches in Strategic Alliances: Creating Opportunities for Growth , and Global Strategic Leadership . He also teaches in the Executive Development Program , Mergers and Acquisitions , Strategic Thinking and Management for Competitive Advantage , and other Wharton Executive Education programs.

About Nano Tools:

Nano Tools for Leaders ® was conceived and developed by Deb Giffen, MCC, Director of Innovative Learning Solutions at Wharton Executive Education. It is jointly sponsored by Wharton Executive Education and Wharton's Center for Leadership and Change Management, Wharton Professor of Management Michael Useem, Director. Nano Tools Academic Director, Professor Adam Grant.

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Strategic Partnerships as a Business Model

I n a constantly shifting business landscape driven by hyper-competition and accelerating rates of change, company managements from small boutique firms to large enterprises increasingly are realizing that no firm, regardless of size, can thrive in isolation. They need to develop strategic partnerships that form an active ecosystem of aligned firms. In stark contrast to vendor transactions, these partnerships are carefully calculated working relationships developed between businesses that involve working with each other in a deeper more beneficial and strategic way.

The  Strategic Account Management Association  - a global cross-industry non-profit dedicated solely to the study, practice, and improvement of strategic business relationship management - reports that the glue binding traditional business customers is not strong. They determined that 71% of B2B customers report being willing to switch suppliers whenever necessary and suggest that the key to eliminating business relationship defections is to become  essential  to each other by becoming embedded into each other’s business strategy and goals.

Especially on the technology front, the Institute has always maintained financial services firms should not look at technology decisions as a “vendor purchase”, but as an ongoing strategic partnership. This is an operating dynamic that requires companies to build a solid cross-firm foundation with the agility to grow together and incorporate new ideas and possibilities as the business environment continues to rapidly evolve and challenge leadership for financial firms. This entails combining resources of talent, knowledge, expertise, and often, finances. While each entity retains its own autonomy, strategic partnering relations can help participants expand their business base and attract more clients because they can offer a broader range of coordinated products and services. They often draw from each other's areas of strength and share their professional contacts.

To learn more about the true art and science of strategic partnering, we reached out to Institute member  Mac Bartine , CEO of  Smartria  – an award-winning, cloud-based compliance software platform designed to comprehensively address the needs of compliance consultants, compliance officers, operations teams, investment advisors, wealth management firms, asset managers and the staff who support them. Their advanced compliance software solutions serve both small RIA compliance teams and large, complex financial organizations such as the high-profile, strategic partnerships Smartria announced with  Dynasty Financial  and  MarketCounsel . We asked Mac - who trademarked “Software as Partnership®” to express his firm’s commitment to client partnering - to share with us his thoughts on how the FinTech–RIA working relationship can embody that level of strategic partnering into the future.

Hortz: How do you define what a strategic partnership is and what does it practically look like in the real world?

Bartine:  The point of partnerships is to actively work together towards a common goal, but in my experience, the vast majority of partnerships are in name only. Companies will put each other’s logos up on their websites, maybe write a blog post or press release or some social posts, and hope that leads to something. That is not a partnership and it sure is not strategic. It’s wishful thinking, which has no place in a partnership or any other aspect of a successful business. In short, strategic partnerships take a lot of thought and an equal amount of work.

There needs to be a deeper benefit beyond just “we can make money together”. Without that, it is just a partnership with no strategy involved. This scenario brings to mind the old axiom “If you fail to plan, you plan to fail.” A good strategic partnership has to have components that make the involved companies benefit from each other’s strengths and shore up each other’s weaknesses, creating a stronger and more effective unit than the two companies would be apart, specifically because they have done the work of figuring out what makes their combined efforts special and worthwhile.

Smartria’s business model and operating philosophy focus on working with our strategic partners to help their businesses to be better for their association with us, and that focus will help us to drive revenue and achieve other mission-critical goals. Good strategic partnerships also last longer than transactional relationships. They build personal connections between people in business, and good business is all about relationships.

Hortz: How can you as a FinTech company and a technologist, be most helpful in addressing financial service industry regulatory and compliance issues? 

Bartine:  Our Software as a Partnership® (SaaP) model was built on our relationship with our larger customers, but SaaP has become part of every aspect of our business.

For example, we partner with multiple  subject matter experts  (SMEs) - consultants, attorneys, and chief compliance officers - for every business category in our industry to make sure we have the correct tools in place for each problem our broader customer base might experience. These are the people we speak with on a daily basis to keep a deep understanding of regulatory changes, what is happening in regulatory exams, etc. By partnering with more than 100 of these professionals, we have a clear picture of everything we need to know to build and maintain a comprehensive and accurate compliance management platform.

Importantly to these professionals, we are also partnering with them as customers who give us constant feedback on what works and what does not, both before and after we launch a solution, so we are not operating in a vacuum. We pay attention to how they operate and build solutions into our platform that helps them to be more efficient and modern in their service delivery.

This becomes a next-level strategic partnership for Smartria and our SME customer/partners when we start looking at the broader industry together. The entire industry is consolidating, including the compliance services space. Our independent SME partners need great tech to offer to their clientele to help them remain fully competitive with PE-owned compliance services firms that own and offer their own compliance tech. By working together, we are offering our mutual customers a “best of both worlds” scenario: great compliance tech that’s customized to their needs and personalized compliance services from professionals who also have a partnership mindset with their customers, not a transactional one.

Hortz: How do you look at partnerships with other FinTech companies?

Bartine:  Technology strategic partners are also critical to our success. Compliance for the RIA industry is a very broad set of problems with specialized workflows and data sets necessary to solve nearly every one of these issues. We cannot build solutions for every single type of problem out there, but we can seek out best-in-class providers of solutions that we do not offer and partner with them to offer those solutions in our platform to be able to offer our customers a more seamless, comprehensive solution with a single login.

We have to choose the right tech partners that can help our customers and other partners to succeed. We have to learn to recognize leverage points between our customers, solutions and partners that can turn 1+1+1 into 4 or 5, not 3. All of these different types of strategic partnerships are critical to our success, and we are critical to theirs. It is a great way to do business.

Hortz: How exactly do you integrate different technology from your outside partners?

Bartine:  We chose to build a platform that is flexible – able to mirror the complex organizational structure of firms with multiple business units, and able to solve the most pressing of their compliance workflow problems. We also chose to build a customizable role for the SMEs so they could serve any type of business in our industry.

Then slowly, we started adding on modules for specific problems within the industry based on the feedback of our RIA customers and what we are hearing from our SME partners regarding future regulatory directions. Employee trade reporting for code of ethics was our first module. Then data governance, an early answer to the increasingly important subject of cybersecurity, with a focus on vendor due diligence, employee access to data, and incident tracking and reporting.

Hortz: Can you share an example of strategic partnering decisions you made and how you determined the right partnership?

Bartine:  We believe our core platform is a best-in-class solution so whenever we start looking for tech partners offering a solution our customers want, we look for other modern platforms that are striving to be or already have achieved some best-in-class status. In the case of portfolio risk analysis and related problems, we asked our customers who they liked. One multi-billion-dollar AUM customer’s answer that intrigued me was  StratiFi , a fully modern, data-driven solution that Bob Veres wrote a glowing review of. The founder  Akhil Lodha  came from institutional risk management and believed that the broader market needed and could benefit from the same types of sophisticated algorithms for risk management that institutional investors use.

Everything I learned about StratiFi and Akhil led me to believe they were the right partner for us. I learned that they were leveraging their analyses in unique, understandable ways to drive client and prospect-driven communications and help grow business with many other bonuses to their approach to the market.

Together with StratiFi, we can offer compliance obligations and reporting plus risk analysis and reporting and business development capabilities – all through a thoughtfully-created strategic partnership. Today we have an integration with StratiFi that was recently launched, and we are approaching larger customers together. It’s a great partnership, mutually beneficial, unique in approach, and exactly the type of relationship we want to help us and our customers to grow and succeed.

Hortz: How did you tangibly structure your firm to be able to be a good strategic partner and ensure successful outcomes?

Bartine:  We created a key position in Smartria called our  Chief Experience Officer  (CXO) which is responsible for leading and coordinating our  customer experience  and  customer success  teams. With over 2500 companies in our software and a couple of dozen pretty active strategic partners, our CXO Amy Easterly and her team are critical to partner success.

The CX teams under Amy are constantly evaluating customer and partner best practices in using our platform and communicating opportunities for growth and improvement for our partners. They are also taking what they learn from our partners and their clientele to share opportunities for growth and improvement with our product and sales teams. All our different teams feed each other, and they are all organized around making our partners and customers more successful.

In short, we have to walk the talk of Software as a Partnership, and that is exactly what we have structured Smartria to do.

Hortz: Can you give us some examples of how the two sides of the relationship can evolve together?

Bartine:  A great example is our partners  Dynasty Financial Partners  and  MarketCounsel , who are also shareholders of Smartria. When we first met them, we were just trying to earn the business through our Software as a Partnership® model. But, as Dynasty saw what we were doing and became aware of the degree to which we are swinging for the fences in our niche, they decided we could be a great investment for their corporate development office. So, we went from a strategic solution provider relationship to a much deeper partnership in much more than just name.

Hortz: What best advice do you want to share with asset management firms about how to reach out and partner with FinTech firms such as yours?  

Bartine:  Whether the FinTech firm is well established like Smartria, or they might be newer change-makers like StratiFi, look for their focus and business model to be reliant on truly partnering with their customer base to continuously offer more and better solutions specifically designed to help them succeed in today’s market, not yesterdays or last year’s. Those are the companies wealth managers should want to work with.

You also want providers who are integrated with other providers who you use and who are integrated with other great providers who solve problems you might be interested in. This helps you to leverage your existing data structure to make it work for you instead of you doing manual, counter-intuitive work to build your data up by hand.

Lastly, wealth managers have to keep security in mind as they are choosing technology partners. What is the company’s security profile? Are they taking the steps necessary to protect your data and your client’s data? Do they have proof of that? Firms and technology solutions that are not doing everything they can to become “cybersecurity native” are going to continue to run into more and bigger problems, and ultimately stand to lose everything when the inevitable bad luck that is actively pursuing every business in the world is not stopped by the policies, procedures, training and technology solutions that they have chosen to protect their business. 

The  Institute for Innovation Development  is an educational and business development catalyst for growth-oriented financial advisors and financial services firms determined to lead their businesses in an operating environment of accelerating business and cultural change. We operate as a business innovation platform and educational resource with FinTech and financial services firm members to openly share their unique perspectives and activities. The goal is to build awareness and stimulate open thought leadership discussions on new or evolving industry approaches and thinking to facilitate next-generation growth, differentiation, and unique community engagement strategies. The institute was launched with the support and foresight of our founding sponsors — Ultimus Fund Solutions, NASDAQ, FLX Networks, TIFIN, Advisorpedia, Pershing, Fidelity, Voya Financial, and Charter Financial Publishing (publisher of  Financial Advisor and Private Wealth  magazines).

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

strategic business partnership model

Bill Hortz is an independent business consultant and Founder/Dean of the Institute for Innovation Development- a financial services business innovation platform and network. With over 30 years of experience in the financial services industry including expertise in sales/marketing/branding of asset management firms, as well as, creatively restructuring and developing internal/external sales and strategic account departments for 5 major financial firms, including OppenheimerFunds, Neuberger&Berman and Templeton Funds Distributors. His wide ranging experiences have led Bill to a strong belief, passion and advocation for strategic thinking, innovation creation and strategic account management as the nexus of business skills needed to address a business environment challenged by an accelerating rate of change.

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Home › HR Career Path › What Does an HR Business Partner Do? › What is the HR Business Partner Model?

What is the HR Business Partner Model?

Certified HR Generalist

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Looking for the HR business partner model? You’re at the right place then.

The human resources business partner model is when the HR department participates in planning in a strategic way to elevate the business growth and supports it in its present and future goals.

Rather than limiting itself by concentrating on HR duties such as payroll, employee relations, and benefits, HR departments seek to add business success to the company by overseeing training, recruiting, advancement, and placement of all employees. In addition, the HR business partner model can organize how HR functions are carried out.

To learn more via video, then watch below. Otherwise, skip ahead.

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The HR business partner role carries the expertise and a comprehensive understanding of how the HR function works and how to make a line of business within the company prosperous.

Their job responsibilities include coaching business leaders about human resources issues such as developing supportive HR, business strategy planning, analyzing talent requirements, onboarding, and recruiting.

HR business partners exhibit solid business knowledge and specific experience within the employer’s business sector, using HR capabilities to support organizational business goals.

HR as a function is close to the top and the center of the organization’s structure. In this manner, HR can function to enhance organizational objectives and add value to the business. In addition, HR business partnering makes human resources a part of corporate strategy rather than a strict, reactive personnel function.

Why is the Human Resources Business Partner Model Important?

The HR business partner model structure is curated to elevate business growth on all levels over time. HR chooses and screens individuals best aligned for the roles involved in recruitment.

In the development and development process, HR locates which employees need detailed training and ensure that it is done correctly.

In knowing the company’s inner workings, the strategic nature of the HR partnership model is combined with a corporate game of employee and manager sequence to achieve the most effective business outcomes.

Our top-rated HRBP certification provides insightful information on the HR business partner model. Take a look here and make sure to enroll to upskill your knowledge with the advanced HRBP skills:

HR Business Partner Certification

What is an HR Business Partner?

A human resources business partner is a senior HR member with a deep knowledge of the correlation of the HR department’s role with the company’s success.

Their role includes supporting, guiding and coaching other HR staff members, as well as strategies, recruiting, and onboarding.

An HR business partner differs from an HR manager. The HR manager is focused on looking over the running of the HR department, while the primary goal of an HR business partner is to ensure HR contributes to the broader success of the organization.

Why is it Important to have an HR Business Partner?

An HR business partner ensures that the HR is treated as an essential business division to develop the business and drive more profit. Processes like intelligent recruitment decisions, smooth internal communications, and effective onboarding all contribute to the broader success of the company. An HR business partner helps lend these things the prominence and attention they deserve.

For HR business partners to work in practice, HR must shake off its lack of self-esteem. However, when done in a strategic way, HR adds immense value to the organization . 

Perks of HR business partner model

HR business partnership, defined by a more expansive definition, is the future role of HR. It walks away from the limited functions of training, recruitment, etc., and makes these functions work for the business.

Reasons for Considering Human Resources Business Partner Model

Here are a few reasons to consider the HR business partner model structure for your organization:

Companies’ primary reason for considering and implementing the HR business model is due to change and evolution.

Change is necessary to expand the business or make it more productive, efficient, competitive, and problem-solving. Therefore, change in the business paradigm is a continuous necessity.

The HR leaders recognize that the business model handles the required changes and improvements by investing in human capital and people.

The supporters of the model understand that the success and job satisfaction of the employees is one of the primary keys to business success. Where a well-run HR partner model is most suited to focus on the needs of both the company and the individuals.

2. Considerations

Businesses considering the human resource business partner model must understand the nature of different model aspects and train outsourced individuals or hire HR specialists.

Expecting a sole HR office to handle HR generalist duties on top of interviewing, training, recruiting, strategic planning, and reviews results in frustration and eventual program failure for all involved. Instead, the HR business partner model requires a conscious HR strategy to change and hire a force of technical HR talent to see it through.

An HR business partner plays a crucial role in acquiring top new talent and verifies business objectives. As a result, they place current employees in the proper position with the correct managers and team partners and have access to vital training opportunities that permit long-term advancement. In addition, by promoting employee satisfaction and individual success, an HR partner aids in publicizing business success.

What areas in which the human resource business partner model adds the most weight? The answer might differ from business to business, the best HR partners work with the upper management team to specify the organization’s short and extensive goals. Then, they develop techniques for achieving these goals and discuss the organizational structure to pinpoint problem areas.

Advantages of a Human Resources Business Partner Model

In a traditional model, the HR manager is accountable for hiring and recruiting employees, administering benefits and payroll, and handling employee relations.

Digital HR technology now takes care of many of those traditional tasks, often freeing up space for HR to take on new responsibilities. Many companies are now looking at the HR role as a business partner, which plays a vital role in driving growth and profitability.

Responsibilities of HR business partner

The business partner model reduces and takes away pressure from management to sharpen employee job skills for efficiency and productivity. Also, they identify, develop, and groom the best employees for success.

HR personnel is also responsible for assessing and reviewing employee data. This allows HR personnel to figure out strengths, which they may develop further to place employees more smartly, and disadvantages, which they may correct with further job skill training or corrective action.

Limitations of a Human Resources Business Partner Model

Suppose the HR department already works in a dynamic way and faces employee relations problems. In that scenario, you will not have enough time and people to assign to partnering with the company for other functions.

The business partner model requires the involvement of HR in almost each and every aspect of the enterprise, including financial status, production statistics, and sales numbers.

Management buy-in may is also a difficulty, as the traditional role of HR is inflated to that of an overseer of the whole business in the business-partner model.

There are multiple shortcomings of a human resource business partner model. The most fundamental ones are mentioned here:

1. Capability Shortfalls

The implementation of the HRBP role often displays pressing shortfalls in vital areas, such as how good the HRBP’s understanding of the necessary drivers of organizational success is and how progressive the HRBP is.

2. Reactive, not Proactive

The HRBP exists to benefit the client, i.e., the internal customer, but, that means pausing for the client to approach them rather than taking a functional approach. This means not concentrating on real value due to unaligned requests.

There is a risk that the client’s demands are based on activity not in line with the strategic goals. Therefore the HRBP does work that is not even aligned with the strategic objectives.

3. Unnecessary Assumptions

There may arise a few assumptions about what parts need attention rather than the ones that need actual requirements.

For example, an HRBP may take the task in seclusion, so when it fails, that HRBP will look at the reasoning behind the loss of that individual project. Yet only about thirty percent of initiatives are ever executed. Therefore, the HRBP needs to look at the business signs rather than take an isolated view.

4. Unsuitable Solutions

There is a trend to give internal customers the best practices. However, this is not always what the customer requires or wants. So instead, HRBPs are responsible to serve the best current outcome.

HR business partnering is gaining popularity amongst organizations to organize their HR function. This is because it’s proving to add meaningful professional value. Human resource is the instigator of both change and balance through business partnering, balancing different stakeholders to the overall organizational ambitions. On the base, this means HR professionals hire the right talent and encourage it here without losing the picture of the more extensive goals and performance in the long term.

The mission of the HR business partner model is to add actual value to the company by adding HR into all areas of business operations and strategic planning. As experts on the human element of the business, HR is best qualified to figure out how every employee fits into the organization’s goals and put each employee in a position to deliver positive results.

Human resources business partners identify employee morale, support new perks, and benefits that provide a competitive edge and build a strong company culture from the latest employee to the oldest one.

Companies must focus on results instead of the process to measure an HR partner’s value. For example, instead of changing the performance review process, Human resource experts need to assess and measure the impact of those changes. There are several trackable HR metrics that companies can use to gauge results.

For the HR business partner model to become a success, an HR professional must develop proficiency with all angles of the business. This will need digitalization or outsourcing primary administrative duties to free specialists up to focus on more significant outcomes.

If you are new to human resources and are looking to break into an HR Business Partner role, we recommend taking our HR Business Partner Certification Course , where you will learn how to build your skillset in the human resources business partner realm, build your HRBP network, craft a great HRBP resume, and create a successful HRBP job search strategy.

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IMAGES

  1. Partnership Management Model For Strategic Alliance

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  2. Strategic Partnership Framework PowerPoint Template

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  3. 5 Step Partnership Management Model

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  4. 5 Types of Strategic Business Partnerships That Work in 2021

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VIDEO

  1. It Takes a Village to Close a Loan: Build Strategic Partnerships

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COMMENTS

  1. Managing strategic partnerships

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  2. Six Elements Of A Successful Strategic Partnership

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  7. How To Evaluate And Execute Strategic Partnerships And Alliances

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  8. 16 ideas for developing strategic partnerships

    Conduct a partnership audit. Look for the right team at the right level. Show your product in action. Take your time. Build a personal brand on social media. Identify your business goals. Ask for an introduction. Know your target's other strategic partnerships. Find businesses with similar clients.

  9. How to Build a Successful Strategic Partnership

    By our definition, a Strategic Partnership is an agreement between two or more organizations that creates shared benefit and accepts shared risk of equal or similar value. While monetary exchange is often included in the structure of a partnership agreement, it's not a requirement.

  10. How to Develop Strategic Partnership for Business Growth

    Step 7: Prepare your post-call email template. o Re-iterate the benefits of partnering - "I know who you are, I know the value that you bring and I want to share it". o Ask about the next steps - how you can move forward. o Don't sell the sausage, sell the sizzle. Don't put too much into the email.

  11. Strategic partnerships shaping today's business model

    sharing economy strategy As the digital age spurs new connections, John Riccio explores the notion of 'connected companies' and how strategic partnerships between old and new organisations are giving rise to new business models.

  12. Partnering to shape the future-IT's new imperative

    According to the newest McKinsey Global Survey on business technology, IT organizations that play a partner role—that is, actively collaborating with the rest of the business to shape an overall business strategy that effectively leverages technology—tend to perform better on a number of dimensions, including the delivery of core services and th...

  13. The 4 Key Aspects to Being a Strategic Partner

    The SBP model is a way to ensure the human system implications and needed change strategies are part of business leadership decisions. It involves both what was always intended as strategic work in HR and new work in strategic and systems thinking, organization design, culture change, human system alignment and change management.

  14. Strategic Partnerships

    Wharton@Work. February 2012 | Nano Tools | Strategy Strategic Partnerships. Nano Tools for Leaders ® are fast, effective leadership tools that you can learn and start using in less than 15 minutes — with the potential to significantly impact your success as a leader and the engagement and productivity of the people you lead.. Contributor: Harbir Singh, The Mack Professor, Professor of ...

  15. PDF Strategic Partnerships: The Real Deal?

    assessments of the role of partnership vehicles in achieving strategy Quantification of the value proposition from the development of a partnership in aggregate and to the partners • Partner assessment and selection using a range of criteria (such as financial, operational, or culture fit) • Partnership business plan and financial model

  16. Strategic Partnership Types, Benefits & How to Find Partners

    Strategic partnerships can take various forms, including joint ventures, collaborations, licensing agreements, distribution partnerships, co-marketing alliances, supplier partnerships, or research and development partnerships. The type of partnership depends on the specific goals and needs of the involved parties.

  17. Strategic Partnerships: What They Are and How To Create One

    A strategic partnership is a business partnership that involves the sharing of resources between two or more individuals or companies to help all involved succeed. Strategic partners are usually non-competing businesses and often share both the risks and rewards of the decisions of both companies.

  18. Business Partnering

    Business partnering is one of the main HR operating models that people functions use globally. Ideally, Business partnering is about defining and aligning people function capabilities in order to meet the organisation's objectives, and you don't have to be called a Business Partner to adopt and apply a business partnering mindset.

  19. PDF The roadmap toward effective strategic social partnerships

    advised strategic social partnerships in the United States, Central America, and Cyprus. He served as a C-level executive for a Fortune 200 organization and is the author of Wal-Smart: What it Really Takes to Profit in a Wal-Mart World, selected as one of the top five business strategy books of the year.

  20. 52 Examples of Strategic Partnerships

    These are based on agreements that often don't go so far as establishing an actual partnership entity such as a joint venture. The following are common types of strategic partnership. Academic collaborations. Asset sharing. Brand partnerships. Channel partners. Co-branding. Co-development of products and technologies.

  21. Strategic Partnerships as a Business Model

    Strategic Partnerships as a Business Model Apr 14, 2023 9:24AM EDT n a constantly shifting business landscape driven by hyper-competition and accelerating rates of change, company...

  22. 6 Steps to Creating a Partnership That Drives Strong Business Growth

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  23. What is the HR Business Partner Model?

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  24. How to Choose the Right Partnership Model for Your Business

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    The Dealer Partnership model is proving attractive to dealers as they are gaining access to an American EV-only brand with a unique business approach. On January 4, Fisker announced a strategic shift from direct sales to a Dealer Partnership model which will enable it to significantly scale for Fisker Ocean deliveries and higher volume ...