Did you know 70% of joint ventures fail?
The reason this is so disproportionate to any other type of new business venture is because most people do not know how to create successful partnerships. Oftentimes people assume that working together is simply better than working alone, without realizing how many challenges can arise when multiple people get involved. Although the benefit is additional resource, unfortunately if the partner’s objectives are not aligned, you can take twice the amount of time to make a decision.
Ironically, we understand how critical picking a partner can be in our love lives; however, do not undergo the same rigour when considering partnerships in business ‘ even when in both situations the partners tend to take half if the relationship goes sour.
With more variables, there should be more consideration ‘ ultimately more strategy. The failure to understand the importance of this at the outset is what makes so many working partnerships fail.
And yet, of those 30% of joint ventures that succeed, you will find they over-index in terms of business success. They are substantially more successful than their solo counterparts, regardless of sector or region. These statistics can be found in every area of corporate collaboration ‘ from sponsorship to brand partnerships to joint ventures and celebrity ownership.
When a partnership works, it really works.
And yet very few people know how to meticulously matchmake. It is far easier to do what you do well and get along with people you like. But oftentimes the collaborations that are most successful are ones where each party brings something substantially different to the table. Unfortunately seeking these types of people out is inherently challenging because we tend to gravitate towards people who are most like ourselves ‘ the opposite of what you should be looking for in any collaboration.
What is required is strategic objectivity ‘ being able to quickly uncover the assets of each party and identify synergies towards a common goal. With so many hurdles to overcome in any start-up, being able to align different viewpoints and objectives is critical. Without seamless alignment, you are just wasting time.
When it comes to working with talent for the long-term, they can help propel a brand beyond a typical advertising campaign because they do so much more than provide a route to consumers. As creatives, talent can add the emotional ties required to create meaningful connections ‘ which is becoming increasingly necessary in a cluttered market. They can also open doors to opportunities you may not even be aware of.
But with all these benefits comes very real, and often very restrictive, working parameters. Regardless of the opportunity and the talent manager, talent is often pulled in many different directions. They tend to lack the focus required to successfully launch a start-up from the ground up. As many already know, it takes real gumption to launch a business ‘ typically working 100hr work weeks for years on end. You cannot launch a global business part-time.
But that does does not mean you should throw the baby out with the bathwater.
The benefits of collaboration are obvious ‘ but you need to create the right framework. Consider what each party brings to the table, the level of commitment, and agreed upon KPIs to ensure there is a clear alignment because when collaborations are not happenstance, the opportunities are endless.