By Eleanor Haas
GE
appears to be once again proving a new standard - this time having to do with
partnering. Technology innovators often try to use partnering as a key
growth strategy. They use it to achieve R&D,
marketing/distribution and/or financing goals. Sadly, too many
blunder in without fully appreciating the complex art and science of
structuring and operating strategic relationships. The result is that the
majority fail. One estimate is that 70 percent overall fail; other, that
50 percent fail within three years.
Worst of all,
they fail for preventable reasons: Mismatched companies, unmanaged
expectations, lack of competency in developing the relationship and/or lack of
competency in managing the processes and relationships needed for
implementation.
GE is showing
another side of the coin: partnering can work successfully when
you do it right. We found it stunning to discover the extent to which
industry leader GE has turned around from a “do it my way” approach to partner
on an unprecedented scale. “It’s better to partner with the No. 3 company that
wants to be No. 1 than to buy a tiny company or go it alone,” says CEO Jeff
Immelt.
What’s more,
GE is using joint ventures as a first choice to test new markets, not as a last
resort Even VC firms are part of this strategy. Teams of GE researchers are
today working with VC firms to discover technologies the company may want, so
GE is investing in start-ups as a result. Is this the same company that has
asserted for years that its management approach, and only its management
approach, was the way to go?
We think
partnering represents the future for any and all growth companies. To succeed
requires a detailed planning process, relentless patience in seeking out the
right partners and the right deals and, finally, tenacious commitment to
operating the relationship as professionally as if it were an entity in its own
right – because that’s what it is.
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