Building Your Pentad for Partnering Success

By Ed Rigsbee, CSP

(974 Words)

Are you tired of adversarial business relationships draining your energy?  

Is it time for you to look at a new way of conducting business--one that empowers all to be more productive and profitable?

If the pain of where you are is greater than the perceived pain of the unknown, you might be ready for partnering. Partnering is an idea that is loosely used to describe anything from teamwork to alliances to contractual partnerships. Partnering, as I define it, is the process of two or more entities coming together for the purpose of creating synergistic solutions to their mutual challenges. I recommend you adopt partnering as your overall business strategy. The benefits are numerous yet the partnering path is not without land mines.

Partnering is not meant to be a flavor-of-the-month management strategy to be hastily adopted and then as quickly abandoned, rather a long term paradigm for success. Partnering is not instant gratification! To adopt partnering as your overall management strategy, you'll need to understand the Partnering Pentad. A pentad is simply the name given to a group of five, the Partnering Pentad represents the five key areas of every business, the areas in which to begin developing your partnering belief and activities. Once in place, you'll have Total Organizational Partnering.

1. Synergistic Alliances is the area of your business where you develop alliances with outside entities for activities where you have core weaknesses you desire to shore up and to cut costs. These could include: purchasing, R&D, manufacturing, employee sharing, distribution, marketing, advertising and the list continues. By sharing your core strengths with others and theirs with you, both can create an environment of synergy yielding each more than the some total of their collective contributions. Land mines to watch out for are core values of alliance members being too different, circles of interest overlap being too little, and continual management change of one or more alliance partners.

2. Supplier Partnering is an area where much is being talked about.  For companies desiring just-in-time manufacturing (JIT) and electronic data interchange (EDI) ordering and inventory control, partnering is an absolute prerequisite. What I here so often from suppliers about their customers is, "They're talking marriage but acting one night stand." Whether you be a retailer, distributor, or manufacturer--to succeed and prosper, you had better start developing long-term relationships with those whom you do your purchasing. The biggest land mine in this area is to talk about quality, delivery, and reliability while only buying based on price. Remember, there is today's price but there is also the overall cost--the overall cost is usually lower through long-term partnering relationships.

3. Customer Partnering is the area of your business where you must be outward driven. Your customers will buy from you as long as they feel they're receiving good value for the dollars they give you. Value-added is a term which much is being written about. You must be customer/market driven rather than product driven to understand what your customers want and perceive as value being added to your products and services. It costs about 10 times as much to get a new customer as to keep a loyal customer coming back for more. The important land mine to watch out for is short-term thinking on your part when making customer satisfaction decisions.