Over the past week, we’ve discussed economies of scale – some the reasons that being “bigger” may be better (see How Big Is Big Enough? all members and Economies Of Scale 101 all members) and when to consider collaboration in the planning process (see Where Does ‘Big’ (& ‘Collaboration’) Fit In Planning? all members and The Disruption Of Strategy all members). And, if you’ve made the decision that some type of collaboration is an essential ingredient to where you want to be in the future, the next step is navigating the collaboration process itself. Here are 10 guiding principles to keep in hand:
Planning comes first – Collaborations of any type come with a big price tag – both financial, and executive time. The first step is always planning, and being certain that collaboration is part of a competitive repositioning (see Planning A High-Performance Merger: The CEO Perspective). Remember the old saw in carpentry, measure twice and cut once. It works here.
Be systematic and have a process – Whenever two (or more) organizations come together for any purpose, there are many elements in play. The politics (read small ‘p’) can be blinding, so the process and decision criteria need to be laid out in advance.
Use experienced talent – Most organizations don’t have executives with expertise in the wide range of collaborations, so engage the expertise you need. You can hire it or rent it, but get the advisors – on markets, legal issues, political ramifications, etc. that you need.
Be deliberate in partner selection – Your planning process and your process for executing the collaboration will, hopefully, make for deliberate partner selection. I’m not saying be slow – I am saying to be deliberate. There is a big difference. Do all your homework and execute the process, and then act with haste (either to continue or to abort) once that process is complete.
Be sure all collaborators are clear (and in agreement) about the objectives – What does your organization need from the collaboration? What about your potential partner? If the goals of the potential partners don’t line up at the start, you can save the time and expense of due diligence but ending discussions now.
Expect to give and receive full disclosure during due diligence – Due diligence involves an investigation and assessment of the benefits and risks associated with a proposed merger or acquisition (see Non-Profit Executives Engaging For-Profits in Mergers and Acquisitions: Fundamental For Non-Profits as Sellers in a Consolidating Market). Communication is the name of the game, and the only way for a positive business relationship is to practice full disclosure. If you’re having “trust” issues at this stage, the collaboration may not have a great future anyway.
Allow decision making to evolve through the process – Collaborations need to be an extension of strategic plans, and strategic plans need to be flexible. At every step of the way, organizations need to be able to ask, is this what we want or could we do this differently and better (see The OPEN MINDS Guide To Strategic Planning: Best Practices In A Turbulent Market)?
Build in time for a competitive process – The only way to spend time on partner selection is to have many partner choices. Think out of the box in terms of collaboration models and potential partners. Shopping around and making possible partners compete is the only way to have a truly comparative selection. This means that you need to allow plenty of time. If you need a partner for an opportunity in a month or two, you don’t have time to shop around.
Design an implementation plan for your collaboration – Collaboration is not something that comes naturally, and it won’t happen without a plan. And, the plan needs to be more than a handshake between CEOs. It needs tactics, and assigned responsibilities, and most of all, it needs a budget. A collaboration won’t succeed when it is just another priority for already busy staff.
Prepare for questions from stakeholders – No matter what the collaboration relationship is, someone will be unhappy with it. Prepare for questions from consumers, customers, referral sources, payers, regulators, and the press.
Does this cover everything? Far from it – every collaboration will be unique. These are just basic guiding principles based on my 20 years of consulting on collaborations.
For another free resource, see Why The Mergers? all members