Smart partnering

Smart partnering helps identify the right partner to build up sustainable long-term and mutually fruitful collaborations. Be it access to investors, experienced employees or to access knowledge about local distribution channels. Partnerships can benefit all stakeholders included. Safe water enterprises might include anybody from universities, to investors, NGOs, individuals or local business partners help you in mastering local challenges.

Doing business at the bottom of the economic pyramid (BoP) requires successful business models, access to finance, context-specific knowledge, skilled people and perseverance to pursue bureaucratic procedures. Meanwhile resources are scarce and local capabilities to develop a safe water business under such conditions limited. A promising approach for meeting and overcoming obstacles to implement safe water business models at the BoP is to establish strategic and complimentary partnerships (see also SDG 17, strengthening global partnerships for reaching the Sustainable Development Goals, (UNITED NATIONS , 2015) for more information). Such partnerships can help safe water initiatives overcome challenges related to distribution, access in remote areas, customer financing, workforce, technical assistance or a local network to only name a few advantages. But partners need to be chosen wisely not risking financial or reputational losses: smart partnering is needed.

Advantages of smart partnering can be manifold and contain:

• Shared risks and responsibilities
• Access to pertinent competences (local knowledge, networks, distribution, certification)
• Complementarities in knowledge and experience
• Increased innovation capacity and potential for co-creation
• Additional internal resources
• Access to finance
• Managerial and legal support

Smart partnering addresses the needs of every safe water enterprise, NGO, investor and government who work on improving access to safe water for the BoP. Starting partnerships will increase the likeliness in successfully scaling up access to safe water (BLONDEEL, 2013).

Smart partnering requires to consider a variety of factors before partnering with external partners. Before entering a relationship with a potential strategic partner, it is recommended to do (HUGHES & WEISS, 2007, SALAZAR ORTÉGON, 2015; KANTER, 1994):

1. Self-analysis:

• Be clear on your needs and what specific sort of partnership you are looking for (e.g. finance, distribution, research etc.).
• Assess what you are able and willing to invest (time and money).
• What are your expectations from the partnership?
• What are the underlying needs?
• Relationships get off to a good start when partners know themselves and their industry, when they have assessed changing industry conditions and decided to seek an alliance. It also helps if executives have experience in evaluating potential partners. They won’t be easily dazzled by the first good-looking prospect they come across.

2. Partner analysis:

• Due diligence of the potential partner (reputation, compliance with ethics, human rights, viability, corruption, the importance of sound financials and strategy etc.).
• Clarify what pros and cons of the potential partnership are (compatibility of goals and business culture, risks, costs etc.).
• Clarify what the potential partner is expecting and if it complies with your objectives (finances, contractual issues etc.).
• Chemistry:
  • Every business partnership contains a personal side of a business relationship, which is not to neglect. Deals often turn on rapport between executives. And the feelings between them that clinch or negate a relationship transcend business to include personal and social interests.
  • A good personal relation between executives creates goodwill to draw on later if tensions develop.
• Compatibility:
  • The courtship period tests compatibility on broad historical, philosophical, and strategic grounds: common experiences, values and principles, and hopes for the future. While analysts examine financial viability, leaders can also assess the less tangible aspects of compatibility.

Having the different aspects analysed, a conclusion can be drawn by mapping all gathered information.

A second example of how to assess and identify a smart partnership can be the partnership canvas tool developed by COPSEY AND ANDREWS (2017):

Depending on your observations a partnership process can be initiated or not. It is highly recommended to at least sign a Memorandum of Understanding or if the partnership implies a lot financial responsibilities it shall be concluded contractually. More specific information about the aspect of sourcing from a third part can be found in the factsheet about planning an efficient production process and layout of a factory.

3. Start and implementation

• Define goals of the partnership.
• Develop a timeframe and a planning with milestones to be achieved.
• Sign a memorandum of understanding to have the frame of the partnership set.
• Implement a monitoring process for the partnership to react flexibly on eventual changes.
• Define also the reporting strategy (once a semester, online finance information?).
• Better early than late: keep informing your partners in the process as there it is always more important to share issues and solve them together than lose trust of all partners.

To analyse your company’s attitude towards smart partnering fill in the survey to receive feedback on how to improve business partnerships.

Compare also the subsequent links for further recommendations on how to successfully partner with organisations or other businesses by tips of what attitude and skills an entrepreneurs’ needs to successfully negotiate and identify the right partners for its business:

• 12 steps on how to identify a successful business partnership (UNDER30CEO, 2018)
• Examples of entrepreneurial attitude that can inspire you and help your partnerships to grow and improve can be accessed at BANKER (2018).

The accompanying case study of Tinkisso describes how they developed smart institutional partnerships with international organisations.