Most businesses start on an individual with an idea. The second step is usually selecting partners to develop that idea. ‘No man is an island entire of itself,” wrote John Donne (1572-1631) in his Devotions upon Emergent Occasions (Meditation XVII, 1624), “every man is a piece of the continent, a part of the main.” Most of us realize this, but we tend to make mistakes when implementing it by selecting partners. While it is only natural to make mistakes when assembling partners for the first time, there are some simple methods that can be used to prevent these first-time partnership exercises from becoming problematic. Having known someone for decades is not a valid reason for a partnership; it can actually have the reverse effect and be a disaster.
Some people seem unable to form strong, lasting partnerships while others succeed in doing so time and again. While talent comes into play, the key success factors are focus, vision and strategic thinking. Consider partners to be ingredients in a donut: Would you pour a batch of liquorice into the batter? Probably not, so before selecting a partner, ask yourself the following three questions:
Q1. Do I really need a partner?
The answer depends on whether or not a partner is essential in building the business. If you can build it yourself, you have no need for a partner just yet; you may be looking for a contractor instead. If a partner is essential, the next question is:
Q2. Why do I need a partner?
A partner is not supposed to do your work or enable you to work less. Your laziness is not a valid reason to give away part of your business. Doing so is plain silly but many do so nonetheless. A partner either has some specific skill or access to a network that is absolutely vital to getting your business off the ground. A partner can also double you up in case your workload is too great, but for IT start-ups that suggests business inefficiencies that have to be dealt with or your business may fail. If you manage to determine why you need a partner, the next question is:
Q3. Whom should I partner with?
This is where things can get tricky as you enter into the realm of personal interaction. If you have 5 different people on your radar but can select only one, which one do you pick and why? You have to be very cold and calculating; this is your business and the wrong selection may cause it to fail. Still, this process is uncomfortable for most which is why so many mistakes are made. Fortunately, there is a way to do this is an impersonal but constructive manner that will actually make you look good no matter whom you pick. We call it:
PASCO – THE PARTNERSHIP SCORECARD
The Partnership Scorecard – PaSco – is based on core business areas and lets you and potential partners determine your combined strengths and weaknesses (it is also very effective for employee recruitment but that is another discussion entirely). We use PaSco internally and also on client businesses to improve overall efficiency levels and reduce ‘fat‘. The core business areas addressed are:
- Management & Operations (e.g. Corporate innovation, Strategic management, Communication)
- Finance & Economics (e.g. Capital budgeting, Investment banking and analysis, Econometrics)
- Marketing & Sales (e.g. Campaign management, Lead generation, Profitability and market analysis)
- Legal (e.g. Commercial lending, Corporate taxation, International trade and tax law)
Each section is broken down into 20 or more subcategories, which potential partners check based on whether their strength in that specific category is High, Medium or Low. As you did this too, the consolidated scorecard will award points reflecting the summation of your scores and theirs; providing you with clear overview of how individual candidates stack up against you. The last thing you want is a partner that doubles you up; you are looking for a partner that is strong where you are weak!
The image to the left are actual client results that clearly indicate operational strengths and weaknesses. Based on the charts, Financial and Legal skills are weak and next in line as far as partners are concerned, whereas marketing and sales are less important (digging deeper, however, reveals that while Marketing is strong, Sales is weak, so there is an argument toward pumping up the sales department).
With this type of mapping in place, the personal element is replaced by hard facts. The gap in business operations has to be bridged to even out the slices and the candidate that delivers the best results – i.e. makes the slices more uniform – ought to be selected. The PaSco approach disarms to candidates not selected and actually provides them with valuable insight into how a strong business foundation is established. They learn from this and that makes you look good regardless of whether you select them or not, thereby neutralizing the ‘personal‘ factor.
If you have already screened candidates properly, there should be no non-factual elements to disrupt the verdict such as ‘Do I want to work with this one‘ or ‘I’d rather work with that one.’ If you find yourself doing that, return to Question 3 above. This is your business we are talking about; not a fishing trip.
If you would like more information on the Partnership Scorecard, contact us.