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🤝 Is that partnership an opportunity or a distraction?
Partnerships can serve as a growth catalyst, but they can also become expensive cost centers
Close your eyes. Take a deep breath in through your nose. Can you smell that? A cheesy, beefy taco with a crunchy, cheesy Doritos shell. It is that first, heavenly bite of a Doritos Locos Taco™. And guess what? They sold 100 million tacos in the first 70 days of launching it! The Taco Bell - Doritos partnership is one of the most famous brand-partnership success stories in recent history. Since launching over 11 years ago, the partnership has expanded and grown for both brands, leading to joint success and one of the longer-running food brand partnerships.
Partnerships are a double-edged sword, though, and for every success story, there are 3 or 4 failures. In this blog post, we will examine the characteristics of partnerships that lead them to be successful or ultimately fail.
Let’s start with the potential pitfalls...what makes partnerships fail?
Partnerships can fail for an infinite number of reasons, ranging from fraud to laziness to offending large groups of people (think Kendall Jenner and Pepsi). However, some of the most common reasons for partnership failures can be traced back to communication, alignment, and execution.
Communication: This is a critical aspect of any successful partnership. Effective communication encompasses everything from crafting a clear statement of work to expectation setting and group problem-solving. Without clear and healthy lines of communication, a partnership is likely to falter, regardless of how well other aspects are managed.
Alignment: Strategic alignment and a mutually beneficial relationship are paramount. All parties must be fully aware of the benefits each will receive from the partnership. Equally important is an understanding of the business life stage of each partner, which involves factors like risk tolerance and financial freedom. Achieving this alignment is often the most complex and underappreciated aspect of forming a successful partnership.
Execution: Simply having a great idea is not enough; successful partnerships require incredible execution. Both parties must fulfill their commitments and obligations to make the partnership work as intended.
What makes a partnership successful?
Now that we’ve discussed potential pitfalls, let’s examine what can help partnerships thrive. Essentially, the opposite of the above points needs to be true. Both organizations need to communicate openly and honestly, with strategic alignment on everything from risk tolerance to legal agreements, and both parties must execute effectively to fulfill their end of the bargain.
Additionally, there are several key incentives that can make partnerships valuable for all involved parties. These incentives include brand recognition, growth opportunities, revenue sharing, licensing, co-selling, and more. These are some of the most commonly used tools to foster successful partnerships.
Partnerships hold immense potential for growth and success, as seen in iconic collaborations like Taco Bell and Doritos. To thrive, focus on effective communication, strategic alignment, and flawless execution. Be willing to walk away, as well, if the effort does not seem worthwhile for all involved. If you decide to pursue a joint venture, remember that partnerships are dynamic, requiring constant attention and adaptation. With dedication and the right approach, both organizations can reap the rewards of a fruitful and enduring alliance.