21 Dec If One Partner Is Losing You’re Both Losing
I never approach a business deal with a partner with the goal to “get one over on the other party”. Instead I focus on getting the best possible deal terms for my client to ensure we are supporting the strategic goals of the business and are doing everything possible to mitigate risk.
This is not to say you should be naïve. There will always be someone who does want to get one over on the other party and you don’t want to be on the receiving end. With that said, it’s usually pretty easy to spot someone who is taking this approach.
Now you may be asking, why not approach the situation to win? Well, it’s all based upon the definition of winning. For example, if a business partner feels forced into providing pricing that is so aggressive he is losing money, he will inevitably either come back to you sometime during the contract term wanting to raise his prices or he will provide you less and less service to try and make up for the costs. This is not a win.
On the other hand, if both parties feel like they have entered a deal with terms that work for their business, they will be likely do what is necessary to support the success of the partnership, and thus contribute to the overall success of the joint solution.
And invariably, there will be operational challenges along the way. When these challenges come up, you want a partnership in which each party is vested in its success and will work together to resolve the problem. If partners believe they are adversaries, addressing challenges will be painful. If partners believe they are engaged in an alliance they will work through the tough issues together.
So, what does a successful partnership look like?
What you must have:
- Deal terms that make sense for both parties
- Contract terms that protect the business
- A clear understanding of what each party is to deliver and clear expectations of what will occur if the partnership is terminated by either party
What you don’t want:
- Someone set up to fail
- One or both parties thinking they got a bad deal
- Lack of clarity and understanding
I must emphasize the lack of clarity because this is where things can really go wrong. If and when you experience problems during the term of your partnership you do not want to be in a position of arguing over what each party meant vs. what was in the agreement. By keeping the written terms crystal clear, as well as your conversations, you can avoid or mitigate such conflict, address the issue, and get back to the business at hand.
Bottom line, it’s a myth to assume there has to be a winner and a loser when structuring a partnership. This concept simply doesn’t work, and in the long run, you both lose.