The Art of Partnering
When I went through the security line at San Francisco International Airport this morning, I noticed this laptop with an Apple sticker pasted over its Dell logo (click to enlarge the photo if you don't believe me). I thought this was very funny, so I asked its owner why he did this. He explained that he was tired of explaining why he had a Dell. I told him that I'd never heard of an Apple owner pasting a Dell sticker over the Apple logo, and he agreed that this was unlikely to happen. (At that point, he noticed my PowerBook's Tony Hawk autograph, but I digress...)
This got me to thinking about how companies form partnerships--pasting each other's logos on products and services and ending up with crap. The fallacy of partnerships--and how “partner” became a verb--is rooted in the dot.com days of 1998-2000. During these years, most startups didn't have a business model, so they blew smoke about having “partnered” with big firms. Surely if a company partnered with Microsoft or IBM, it would be successful.
To this day, whenever an entrepreneur uses “partner” used as a verb, it bothers me because I hear, “Bull-shitake relationship that isn't going to increase revenue.” However, I am not an angry little man, so in the spirit of improving what has become a flawed process, I offer The Art of Partnering.
- Partner for “spreadsheet” reasons. Most companies form partnerships for the wrong reason: To make the press and analysts happy. This is stupid. The right reason to form a partnership is to increase sales or decrease costs. Here's a quick test: Will you recalculate the spreadsheet model of your financial projections if the partnership happens? If not, then the partnership is doomed. You can wave your hands all you like about “visibility,” “credibility,” and “acceptability,” but if you can't quantify the partnership, then you don't have one.
- Define deliverables and objectives. If the primary goal of a partnership is to deliver “spreadsheet reasons,” then execution is dependent on setting deliverables and objectives such as additional revenues, lower costs, penetration of new markets, and new products and services. The only way to determine whether a partnership is working is to answer quantifiable questions such as, “How many more more downloads of software occurred because our two web sites are now linked?”
- Ensure that the middles and bottoms like the deal. Most partnerships form when two CEOs meet at an industry boondoggle. The next thing you know they've concocted a partnership that “the press and analysts will love,” and the next step is to get the PR people to draft an announcement. Is it any wonder partnerships seldom work? Some people believe that the key to successful partnerships is that top-management thought of it. They're wrong. The key is that the middles and bottoms of both organizations like the partnership--after all, they will be implementing it. Indeed, the best partnerships occur when the middles and bottoms work together and wake up one day with a de-facto partnership that didn't involve top management until it was done.
- Designate internal champions. Long after the press conference and announcement, one person inside each organization must remain the champion of the partnership. “A bunch of people contributing to the partnership when they can” doesn't cut it. For example, during the desktop publishing days of Apple, John Scull (not Sculley) was “Mr. Desktop Publishing” at Apple. His counterpart at Aldus was Paul Brainerd. So the responsibility for the success of desktop publishing came down to John and Paul--not John, Paul, George, Ringo, and a host of other part-time contributors.
- Accentuate strengths, don't hide weaknesses. Companies form most partnerships to hide their respective weaknesses. For example, Apple and DEC formed such a partnership in the 1980s. Apple's weakness was a lack of data communications strategy. DEC's weakness was a lack of a personal computer strategy. So the two companies tried to put two and two together. In the end two and two didn't even add up to four because DEC's data communications strategy couldn't help Apple, and Apple's personal computer strategy couldn't help DEC. The deal between Apple and Intel has better prospects because it is based on the companies respective strengths: Apple's ability to design great consumer devices, and Intel's ability to build fast chips with low power requirements.*(see footnote) And this partnership certainly has “spreadsheet” reasons for both parties.
- Cut win-win deals. A partnership seldom takes place between equals. As a result, the more powerful side is tempted to squeeze the other party. The weaker side, for its part, will begrudgingly accept such deals and try to get what it can. Bad idea. Bad karma. Bad practicality. If the partnership is a win-lose deal, it will blow up because concrete walls and barbed wire cannot hold a partnership together. Only mutually beneficial results can. In the long, the bitter seed of resentment planted at the start of a partnership will grow into a giant, destructive weed.
- Put in an “out” clause. No matter how great the deal looks, put in an “out” clause so that both parties may terminate the partnership relatively easily. This may seem counter intuitive, but if companies know that they can get out of something, they'll work harder to make it successful. This is because easy out clauses can increase motivation: “We'd better keep up our end of the bargain because we need these guys, and they can walk.” Frankly, if all that's holding the partnership together is a legal document, then it's probably not going to work anyway. It's hard to imagine that indentured servitude is a motivating model of employment.
- Ask women. Men have a fundamental genetic flaw. Actually, they have many fundamental genetic flaws, but I am only concerned with one here: The desire to partner (verb!) with anything that moves. They don't care about practicalities and long-term implications. If something is moving, men want to partner with it. Women, by contrast, do not have this genetic flaw. When you come up with an idea for a partnership, don't bother asking men what they think about it because they will almost always think it's a good idea. Instead, ask women and gain some real insight as to whether the partnership makes sense.
- Wait to legislate. Remember in the Art of Recruiting entry when I said that an offer letter is the last step in the process? An offer letter is not properly used as a “strawman” to get negotiation going. The same thing applies to a partnership. After you've reached closure on the deal terms--the result of many meetings, phone calls, and emails--then you draft an agreement. This happens at the end of the process because you want the people to have psychologically committed themselves to the partnership. If you start the drafting process too early, you're asking for nit-picking delays and blowups. Incidentally, if you ask for legal advice too early, you'll kill the process. The best way to deal with lawyers is to simply say to them: “This is what I want to do. Now keep us out of jail as we do it.”
Written at: Marriott Hotel, Park Ridge, New Jersey
* Please God, take these two strengths and give us a laptop that has the Macintosh interface and a six-hour battery life. But then, God, why didn't Steve talk about battery life in his keynote address?
Thanks, Tom Kang, for your outstanding contributions to this entry.
Scientists hail discovery of hundreds of new species in remote New Guinea By Terry Kirby, Chief Reporter Published: 07 February 2006 An astonishing mist-shrouded "lost world" of previously unknown and rare animals and plants high in the mountain rainforests of New Guinea has been uncovered by an international team of scientists. Among the new species of birds, frogs, butterflies and palms discovered in the expedition through this pristine environment, untouched by man, was the spectacular Berlepsch's six-wired bird of paradise. The scientists are the first outsiders to see it. They could only reach the remote mountainous area by helicopter, which they described it as akin to finding a "Garden of Eden".
The estimated cost is about $50 billion.
"When we first did this study we thought this idea was way too expensive--we were shocked by the numbers," Flynn said. "But let's say conservatively that there are 100 million people in Europe affected by this current. Fifty billion dollars would come to 500 dollars per person, and we don't think that is an unreasonable price if the glaciers are at your backdoor and your way of life is disappearing." Flynn emphasizes that his group does not propose this scheme as the first or best choice, since all geo-engineering projects have a risk of unforeseen circumstances. "The best way to deal with global warming is to deal with the causes, fossil carbon in the atmosphere, not the symptoms," he said. "However, if our efforts to control CO2 levels in the atmosphere fail and we reach a crisis, we can contemplate emergency action."
Lenovo shows concept PCs behind closed doors
February 7, 2006 A few weeks ago as CES 2006 was drawing to a close, Gizmag's Dave Weinstein and Rob Walker were invited to a closed door meeting with some of Lenovo's top designers. From time to time we get a chance to peek into the future and get a glimpse at the gear we may possibly be using a year (or five) from now, and the preview we received from Lenovo was one of the most promising demonstrations we've seen in a very long time. A large part of Apple's recent string of successes can be attributed to their outstanding industrial design. It's becoming much harder to differentiate product on a strict technology basis (note the CES trend of over-integration). We think we're witnessing a resurgence in the importance of good design. As a result of Lenovo's purchase of IBM's PC division (and that group's continued focus on ID), we think we'll soon see Lenovo established as a premier consumer brand. Unfortunately, since some of the device prototypes demonstrated were top secret, we were told that we could write about them, but couldn't take pictures. Accordingly, though we can show you some pictures, we'll do our best to describe what we've seen and you'll have to fill in the blanks with your imagination. Reinventing the Desktop First up was David Hill, Lenovo's Research Triangle Park design leader. It looks like Lenovo's been busy trying to figure out how to build a better office PC and they've got two concept devices that looked polished enough that they could be produced today if the company decided to bring them to market. The first was a utilitarian take on the standard "tower" PC. Basically, without relying on any Star Trek like future technology breakthroughs, Lenovo's designers managed to rearrange the traditional physical layout of the PC to be more reliable and easier to service. The internal motherboard of the device has been turned 90 degrees so all the connectors are exposed on the TOP of the device instead of out the back. A relatively new industry innovatation in hard disks, SATA (serial ATA) has connectors that can be "hot swapped" while a computer is running. Lenovo took advantage of this and designed an assessable storage cage directly into the top of this PC as well as handles on the hard drives themselves to make it easy to service the drives without having to take apart the whole PC. Finish off the "base unit" with one big sturdy handle and you've got a desktop PC that any techno-gearhead would be proud of. To clean up the desktop, Lenovo envisions a flexible monitor arm holding up flat panel monitor and a keyboard assembly that would also include a laptop style CD or DVD drive and and an integrated pointing device. Their second desktop PC was a compact pedestal design that was meant to sit entirely on your desktop. The device itself acts as the monitor stand for an LCD display, and has been designed in such a way as to hide all the wires that would traditionally come out the back of a desktop device. When you've got your PC butted up against a wall it wouldn't matter, but if you've set up your desk so your PC is facing outward this device looks as good from the back as it does from the front. Again, the cleaver designers at Lenovo, used the same SATA based hard drive standard in this PC, and the same disks that plug into this device can be used in the larger "tower" PC concept we were shown. Similarly, the cool keyboard with integrated Trackpoint and DVD drive were utilized as well. We loved all of it. During our discussions David expressed some concerns about the utilitarian the design language of the tower's base unit But like AM General's Hummer, we're pretty confident that they got it right and that when Lenovo starts making these bad boys, that IT managers will be buying them by the pallet load. We hope the company decides to offer these devices as products soon.
USEFUL:
BMW offering free audio books designed for the 40 minute auto commute
February 7, 2006 As MP3 technology gives greater accessibility to all forms of audio content, there has been tremendous growth in the area of audio books. Audio books offer a very different user experience and are finding a loyal band of devotees amongst people who regularly need to drive long distances. For those drivers who don’t have satellite radio, recorded books offer a continuous thread of amusement that lasts much longer than terrestrial-based radio station footprints. Accordingly, it was a natural fit for BMW to follow the success of its internet-based ‘The Hire’ series of short films by offering free MP3 audio books specifically designed to be experienced while driving, with the average length of 45 minutes per story matching the average driver’s commute.
2 comments:
This article was extremely interesting.
Good point, though sometimes it's hard to arrive to definite conclusions
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