How can you minimize risks when partnering with competitors or disruptors?

Partnering with competitors or disruptors can be a strategic move to access new markets, leverage complementary strengths, or create innovative solutions. However, it also comes with potential risks, such as losing competitive advantage, sharing sensitive information, or facing conflicts of interest. How can you minimize these risks and ensure a successful partnership? Here are some tips to consider.

1 Define clear goals and expectations

Before entering a partnership, you and your partner should have a clear and shared vision of what you want to achieve, how you will measure success, and what each party will contribute and receive. This will help you align your interests, avoid misunderstandings, and set boundaries for the partnership. You should also document your goals and expectations in a written agreement that outlines the scope, duration, roles, responsibilities, and terms of the partnership.

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Mary J. Hand, SPLP 🐝

SaaS Implementation Program Manager | Business Process & Systems Analyst | Corporate Trainer | Strategic Partner Leadership Professional®
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If entering into an agreement with a big player, there may be a clause that they can also throw their hat in the ring to "go it alone", and not just as a joint solution with you. This is where NDAs and legal arrangements become critical.

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Franz-Josef Schrepf

Partnerships @ OpusClip | Author of 'The Book on Partnerships' | Captain @ The Partner Ship 🚢
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If it’s crucial to partner with a competitor or disruptor, make sure to start small and outline a shared “exit strategy”. The partnership needs to pass the risk vs. reward equation. Validate that the rewards are real through experimentation while you decrease any risk through a mitigation strategy.

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2 Establish trust and communication

Trust and communication are essential for any partnership, but especially for one that involves competitors or disruptors. You and your partner should be transparent and honest about your intentions, capabilities, and challenges, and respect each other's values and culture. You should also communicate regularly and effectively, using the appropriate channels and tools, and address any issues or concerns as soon as they arise. By building trust and communication, you can foster a positive and collaborative relationship that benefits both parties.

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Franz-Josef Schrepf

Partnerships @ OpusClip | Author of 'The Book on Partnerships' | Captain @ The Partner Ship 🚢
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One effective tool to navigate these delicate relationships is to create informal lines of communication between you and your POC at the partner company. In-person meetings, direct chat access, and other informal channels can help build trust, speed up conversations, and provide a space for “real talk”. Most conflicts and tensions can be resolved if you address them head on and before they escalate.

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3 Protect your intellectual property and data

One of the main risks of partnering with competitors or disruptors is exposing your intellectual property and data to potential misuse or theft. To protect your assets, you should identify what information is confidential and sensitive, and what information can be shared or disclosed. You should also use legal mechanisms, such as non-disclosure agreements, patents, trademarks, or licenses, to secure your rights and obligations. Additionally, you should implement technical measures, such as encryption, authentication, or backup, to safeguard your data and systems.

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4 Leverage your strengths and differences

Partnering with competitors or disruptors can be a great opportunity to leverage your strengths and differences, and create value for your customers and stakeholders. You and your partner should identify what you do best and what you can offer each other, and capitalize on your synergies and complementarities. You should also acknowledge and respect your differences, and use them as a source of learning and innovation. By leveraging your strengths and differences, you can enhance your competitive edge and differentiation.

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5 Monitor and evaluate the partnership

To ensure that your partnership is delivering the expected results and meeting the agreed goals, you and your partner should monitor and evaluate the partnership on a regular basis. You should use relevant metrics and indicators, such as revenue, market share, customer satisfaction, or innovation output, to track your progress and performance. You should also collect feedback from your customers, employees, and other stakeholders, to identify what is working well and what needs improvement. By monitoring and evaluating the partnership, you can adjust your strategies and actions as needed.

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6 Plan for contingencies and exit

Even if your partnership is going well, you should always be prepared for possible changes or challenges that may affect your relationship or objectives. You and your partner should plan for contingencies and exit scenarios, such as market shifts, regulatory changes, disputes, or termination. You should also define the criteria and procedures for ending the partnership, such as notice period, obligations, liabilities, or asset distribution. By planning for contingencies and exit, you can minimize the impact and costs of a potential breakup.

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Franz-Josef Schrepf

Partnerships @ OpusClip | Author of 'The Book on Partnerships' | Captain @ The Partner Ship 🚢
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When things go south, always keep the post important party in mind: your joint customers. It’s likely that the partnership was initiated on the request of a customer who depends on both of your services. You can stop onboarding new customers to your joint offering, but give existing users amble time to prepare for a transition if necessary. Finger pointing will hurt both your brands, regardless of who is at fault, so keep it professional and ensure a smooth transition at all costs.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How can you minimize risks when partnering with competitors or disruptors?

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1 Define clear goals and expectations

2 Establish trust and communication

3 Protect your intellectual property and data

4 Leverage your strengths and differences

5 Monitor and evaluate the partnership

6 Plan for contingencies and exit

7 Here’s what else to consider

Partnerships

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How can you minimize risks when partnering with competitors or disruptors?

1

2

3

4

5

6

7

1 Define clear goals and expectations

2 Establish trust and communication

3 Protect your intellectual property and data

4 Leverage your strengths and differences

5 Monitor and evaluate the partnership

6 Plan for contingencies and exit

7 Here’s what else to consider

Partnerships

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