One of the most strategic moves a business leader can make is to connect his or her company to other organizations. In fact, PricewaterhouseCoopers’ annual CEO survey found that forty-nine percent were currently plotting a collaboration.
But even when a business partnership begins on a great note, for many reasons, the course of the partnership can change or digress from its original purpose.
Facebook, for example, is known for growing through strategic collaborations, but the social media giant found itself in serious trouble when too many data-sharing partners spoiled the broth. When an FTC investigation discovered that it had neglected its partners’ data compliance, the scandal threatened Facebook’s carefully crafted reputation.
A logical and passion-aligned partnership can bring many benefits, but it’s important that executives learn to recognize when a partnership no longer serves its purpose.
How You Know Your Company Has Outgrown a Partnership
The key for avoiding the kind of trouble Facebook finds itself in is to develop an awareness for the health of a partnership so you can check in and catch problems quickly.
There are three main indicators you can use. First, use KPIs to tell a story about your business’s functionality. If one of your performance indicators is dipping where your partner’s is soaring, the partnership might be unhealthy.
Second, if a partner costs vast amounts of time — needing constant management or supervision — you might be better off taking the resources elsewhere.
And third, if your company has the infrastructure and skills in place to handle the job in-house, why not? By keeping an eye on these three factors of a partnership, business leaders will have a good idea of which partnerships are bringing value and which are worth cutting ties.
How to Cut Ties With a Partnership
Making the call to separate from a partnership is always a difficult decision. What’s more, companies rarely have a comprehensive plan in place for how they’ll handle the break up. Here are three strategies to help you end a dysfunctional partnership swiftly and amicably, without letting your business suffer.
Make feedback a part of the partnership. Get into a routine of offering feedback before you need to. If partners are used to discussing constructive criticism with you, they’ll be more receptive to it in times of crisis. Plus, it will give them a chance to remedy issues before they come to a head. Who knows? You might be able to transform the partnership with a little communication.
Capture their knowledge. Don’t part ways without a transition plan. List out the unique pieces of expertise the partner brings to the table, and form an internal plan for who will take over those responsibilities. If the partnership ends with goodwill, try to arrange for knowledge transferring, shadowing, or having someone stay on from an operational perspective until the transition settles down.
Make a clean and quick break. For an amicable parting, be upfront and honest. The best way to terminate a partnership to sit down your partners as soon as possible and have a plan for this conversation. To prevent the relationship from degrading or getting too personal, use KPIs and data to prove your concerns. Keeping things civil and forward-thinking will aid in your knowledge transfer efforts, too.
Ending a business partnership doesn’t have to be messy. If both parties are communicating and the reason for the separation is clear, there’s no reason why you can’t continue to provide value to each other throughout the transition.