Maximize value through next-generation partnerships

Ecosystem partnerships are essential for organizations. They maximize value for you and have a significant impact of your success. Find out what you have to do to build, scale, and cultivate a valuable partner ecosystem with the 3-5-7 model.

By Christophe Mouille, Accenture

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Partnerships are important, especially in the ongoing industrial revolution driven by interconnectedness and cutting-edge technologies.

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The American economist and Nobelist Milton Friedman once mused that there’s not a single person in the world that could make a simple pencil—literally thousands of people had to cooperate around the world to build one of the simplest objects that you can buy in a store.

Partnerships are essential to every business because they enable every participant in the market to focus on their core competency and maximize overall economic efficiency. The partnership ecosystem that an organization creates can also have a significant impact on their success since it influences quality, cost, and a wide range of other factors, using the core competencies of your partners.

Let’s look at a model that you can use to build next-generation ecosystem partnerships that maximize value for your organization and enlarge the value you deliver to the market.

Define your organization’s goals

The first step in building a partnership ecosystem is understanding your own business. In particular, you must understand what elements of the business should remain in-house and what elements are best to delegate to partners.

The three key steps in the self-assessment include:

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1. Know your company: The SWOT, or strengths, weaknesses, opportunities and threats, framework is a good way to understand your company’s competitive position in the market. Using a realistic, fact-based, data-driven analysis, you can identify what you do well and less well and whether your products and services are future-ready.
   
   
2. Identify core competencies: Deconstruct the characteristics of your company to identify true core capabilities and skills that define your organization. When identifying these core competencies, it helps to take a customer-centric perspective to best understand what truly has an impact.
   
   
3. Define your ambitions: Get together with the Board of Directors and other stakeholders to decide on the company’s direction, the positioning of products and services within the value chain and what types of products and services that you want to offer to the market—both now and in the future.

Scaling your partner ecosystem

The second step in building a partnership ecosystem is identifying your requirements and finding the best partners to fulfill those requirements. In order to do so, you must predict where the market is headed over the coming quarters and years.

The five key steps in the identification process include:

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1. Make, buy or partner: Based on the core competencies identified in the first step, consider what parts of your business you’d like to keep in-house and what parts are suitable for collaboration with partners. Partners can increase value, add flexibility, expand reach, or reduce costs, but it’s good to know what the core competencies and differentiators are in-house. For example, Apple may outsource CPU manufacturing but not operating system development.
   
   
2. Pick the winners: Analyze the competition and figure out how it’s likely to evolve in the future. In particular, step back and look at competitors and market disruptors to see how the value chain will evolve over time. These movements along the value chain could have a significant impact on your partnership ecosystem strategy.
   
   
3. Think outside-of-the-box: Take an outside-in approach to analyze dynamics outside of your market (e.g. beyond where competitors are playing or moving to). For instance, look at other industries or geographies to identify patterns in the way they are reinventing their own businesses and the potential impact on their market. There always a lot to learn from others and from convergence dynamics, particularly at a time when Industries boundaries are blurring.
   
   
4. Screen potential partners: Once you know the areas where partnerships will play a key role, you can then prove a list of potential partners and take a deeper dive into each of them. Understand their strengths, levers, but also their gaps (where you can help create a bi-directional shared interest), and then categorize them in terms of their level of importance to your organization future success.
   
   
5. Create an engagement framework: Define what activities each partner will be responsible for within the overall value chain, assess their business model, and look at options, e.g. (co-)develop new functional or geographic products/services/solutions, articulate new joint offerings, create go-to-market initiatives and build a commitment-driven governance mechanism between your both Companies.

Governing successful partnerships

The final step in building a partnership ecosystem is cultivating the relationship over time in order to ensure its long-term success. By building these relationships, you can encourage partners to act in everyone’s best interest and keep the door open to new opportunities.

There are seven ways to cultivate the relationship:

1. Reciprocity: Partnerships should create value for each party by solving challenges for each and creating a common interest and destiny.
   
   
2. Distinctive: Ensure that partnerships bring value differentiation to clients in target geographies and industries by building something that is distinctive and that each partner cannot get through another ecosystem partner or independently.
   
   
3. Innovation: Build joint products or services that have the potential to disrupt the market in a way that synergistically builds value for both parties and avoids commoditization over the long-term.
   
   
4. Enablement: Articulate incentives on each side—including the required investments—to ensure that both parties are motivated to push joint go-to-market initiatives in target geographies and industries.
   
   
5. Origination: Both teams should commit to origination activity to attract new clients or customers, or start new conversations in the case of a B2B business, in order to become part of the industry’s fabric, secure value and avoid late-time-market-entry.
   
   
6. Ownership: Partnerships should involve a true commitment from both leadership teams for joint partnership success, which is best done through not only a top-down direction, but more importantly a field ownership and commitment.
   
   
7. Execution: Partnerships should have a transparent governance mechanism in place to facilitate field collaboration with a dual top-down mandate and bottom-up field-driven execution where each partner plays a distinctive role.

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The bottom line

Partnerships are an essential component to any business and can have a significant impact on long-term success and value creation. With the 3-5-7 Partnership Model, organizations can develop, build, and maintain the right partnership ecosystem by carefully thinking through everything from their own requirements to building lasting and market-differentiating relationships.

These partnerships are especially important amid the ongoing industrial revolution driven by interconnectedness and cutting-edge technologies.

Christophe Mouille

Christophe is Senior Managing Director at Accenture and currently leading the Industry X Key Strategic Partners around the globe. Start a conversation with him on LinkedIn.

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