Strategic alliances are essential when expanding globally. If you’re exporting, you need distributor partners or sales agents. You need partners to help with logistics, export compliance, after-market servicing, tax and legal advice, and savvy website support.
If you’re setting up a new office, you need a strong human resources and benefits partners, and a whole host of local service providers you can completely rely on. The make or buy dichotomy isn’t totally apt when entering new markets because of the risks, complexities, and distance. Even if you buy a local company, you’ll still probably need to outsource several key services.
Successful partnering is the name of the game. But many companies – even large ones – are often frustrated and disappointed with their international expansion results or the speed of achieving those results.
A partial answer is inadequate cross-cultural skills. Unclear processes and governance are also to blame, because they often take far more time and patience internationally than is expected or budgeted.
But there’s also the lack of partnering skills -- something we call "Partnering Intelligence." It's a core competency that translates bold international sale growth promises into true shareholder value. These competencies are actually measurable. Every executive, manager, and employee has a quantifiable "PQ" or Partnering Quotient. Much like an IQ, it measures the capacity someone has for partnering.
People with a high PQ do what it takes to implement the necessary organizational and cultural changes to make the new alliance work smoothly. They choose their partners more carefully, are thoughtful about alliance governance, and focus on the necessary hard and soft skills.
What are the attributes of a high PQ?
- Ability to trust. Do you give people your trust, or do they have to earn it? This is probably the most important competency. Trust in this context doesn’t mean shaking hands at the end of a meeting and expecting your partner to deliver exactly as you believe you agreed. There are many reasons in cross-border deals that this may not happen. What we mean by trust is the belief that your partner is well-intentioned, and will put the best interests of the alliance first.
- Comfort with change. Are you comfortable changing not just the status quo, but your status quo? Most people believe they are far better with this attribute than they really are. And global expansion tests the limit of that comfort.
- Comfort with interdependence. Can you allow your partners to accomplish their assigned bits, even if they don't do it the way you would? This often takes some serious thought about the objectives vs. the process for getting there.
- Self-disclosure and feedback. Can you easily articulate and disclose your needs, as well as express your appreciation or disappointment? Articulating needs is particularly challenging in cross-border partnerships, as so much communication is intertwined with our own cultural orientation. Delivering effective feedback also requires more care, as the way it is delivered and received varies considerably among cultures, as Erin Meyer’s book The Culture Map demonstrates.
- Win-win orientation. Do you employ a problem-solving approach that creates wins for both partners? Beware of subtle biases that result from one partner deep down believing they have the “upper hand.”
- Past/future orientation. Do you look to the future rather than the past in evaluating your alliances? This also can be challenging, as so much of each person’s experience is wrapped up in their national or regional culture.
Together, these critical attributes form a validated system of behaviors to create productive partnerships. Partnering attributes can be measured and learned. Combine these with defined processes for implementing and guiding your alliances, and you have a repeatable formula for success. We call people with these competencies "smart partners."
In the end, businesses don't partner -- people do. Companies that build effective partnering competencies in their workforce will fare much better than their shoot-from-the-hip counterparts in achieving success from their business alliances. They experience less frustration and fewer missteps, and create more powerful partnerships.
And their international expansion will flourish as a result.
Like to learn more?
Attend "To Have Better Partners, Be a Better Partner,” being held on September 14 from noon-1 p.m CST – here’s the registration link HERE.
Contact the author Doris Nagel of Globalocity Services HERE.