I recently read a Harvard Business Review article that said around 50-60% of partnerships don’t work. That seems low – I would put the number at closer to 70–80%. And when innovation partnerships go wrong, they sap the energy of the teams, frustrate everyone involved, and do not come anywhere close to meeting the initial goals.
Over the years, I have seen unsuccessful innovation partnerships that seemed to have come straight from Dante’s Inferno - a trip through a hell where all entrants are greeted with a sign that says, “Abandon hope all ye who enter here.” Is that a bit dramatic? Maybe: Of course, not every partnership ends up in that state. But talk to someone who has lived through a bad partnership and I bet he or she will agree that it was terribly painful, and seemed like it would never end.
There are four failure factors that typically cause the Dante effect - selection, complexity, orientation, and conflict. These are the things to watch out for when you are developing collaborative innovation and managing partners.
Selection error occurs when sub-optimum selection criteria are used and the wrong partner is selected. There is little you can do to recover from the selection of the wrong partner, except to start over again.
Avoiding that costly mistake depends on applying the right selection criteria. First, determine if the partner has the right capabilities in technology and business model innovation. Then look carefully to determine if your business objectives and cultures are compatible. Finally, make sure the partner has a management approach that can really deliver. Weaknesses in any one of these areas can spell disaster.
Complexity problems arise from over-managing simple partnerships and under-managing complex ones – usually the result of a one-size-fits-all approach. It is crucial to understand there are different types of partnerships. Some are complex and some are simple. Some are highly valuable and some provide more modest value. Each type requires a management system and operational model tailored to the mix of complexity and value. If you don’t adjust the execution to fit, you get mediocre performance, followed by finger-pointing, growing frustration, and a situation that quickly deteriorates into heated conflict.
Orientation difficulties crop up when partners have different goals, unclear expectations, or their organizations are misaligned for execution. All too often, companies assume that their goals are clear and compatible with the partner’s and nothing needs to be done. The reality is that the corporate culture of each company often makes it difficult to achieve the goals of any partnership – especially strategic partnerships. It takes a concerted effort to clearly articulate a company’s goals and align partners with these goals.
Half-hearted efforts won’t deliver the results you want. Conflict is an inherent part of collaboration. Often companies refuse to address this fact, and they pay dearly. When partners are unwilling or unable to deal with conflicts, problems fester, mutual distrust grows, and the relationship becomes toxic. Many potentially great partnerships have failed because the partners thought conflict was something that happened to others and that it could never happen to them.
Building in conflict resolution tools and engaging the appropriate people within the organization to resolve conflicts quickly is one of the best investments you can make. But remember that one size does not fit all: different types of partnerships require different types of conflict resolution tools.
The presence of any of these four factors corrodes a partnership. When more than one factor is present, things can go bad even faster. That’s about the time when it feels like Dante’s Inferno.
My next blog post will address the best practices for constructing and managing successful relationships. But before that gets posted, feel free to share your experiences with innovation partnerships that have gone bad.
I look forward to reading your comments!