Breaking up may be hard to do, but for global enterprises, honeymoons may be even more challenging.
In a new study from PwC entitled Joint Ventures and Strategic Alliances: Examining the keys to success, almost 60% of CEOs reported that they were planning to enter into a new strategic alliance or joint venture (JV) in 2016. Considering the economics of global expansion, the number isn’t really that shocking.
What adds to the complexity today is the increasingly global aspect to many of these partnerships. Given the cost of having wholly-owned boots on the ground in international markets, the JV or partnership tends to be a very attractive option.
So in addition to having an integration of brands, technologies and accounting structures, there is perhaps the most important aspect to partnering: the matter of cross-cultural understanding.
Over my 35 years in international business management, my HQ paymasters have always been very demanding about exploring pedigree partners to diminish financial risk and to leverage the power and footprint of both partners.
While arguably most of these new relationships have real business substance, we all know that many came about as the result of ceremonial dinner conversations. Those “cocktail napkin” deals are usually accompanied by “let’s have our respective C-level teams schedule some time to work out the integration details.”
Many IT and marketing organizations have been desensitized to the cocktail napkin given the frequency with which these deals occur. Their service organizations and businesses have baked that agility into their department cultures. Other companies with a more parochial stance don’t facilitate this approach easily.
I tended to be a C-level manager with an insatiable appetite for global chaos. I knew that most of my Chairmen or CEOs became incredibly successful because of an uncanny intuition for the potential of certain partnerships or JVs, as spontaneous as they may seem. Having had the opportunity to manage partnerships on a global scale, I can offer the following advice.
- Enterprises that have the ability to effectively and rapidly integrate technology and organizational systems across partnerships will have a distinct competitive advantage in the marketplace.
- History tells us all that many partnerships fail simply because one partner’s home-grown platform can’t communicate with mainstream applications; and the emotional and financial cost of making it do so becomes onerous. This is especially prevalent when integrating marketing technologies.
- Onboarding is not related strictly to HR training any more. The whole area of data onboarding (which I will cover in an upcoming blog) is becoming one of the most important areas of data analytics especially as it pertains to partner companies trying to leverage CRM data. Essentially, these are services that take wildly disparate data sources and enable “ingestion” such that the data synchs with the other disparate data feeds.
- Finally, the age-old quote that “culture eats strategy for breakfast” is apropos here. Many a CEO or Chairman might feel chemistry in a conference room or private dinner, but having that vibe trickle down to the proletariat that makes the deal work is a completely different matter. One need not leave the country to experiences a clash of corporate cultures.
What has been your most challenging partner integration project and how did you overcome the technological and cultural hurdles?