This is one of a 13-part series exploring Cooperation and Collaborative Business Model.
“If you want to go fast, go alone. If you want to go far, go together” – African Proverb
Are you looking for a way to work with others?
As part of our 13-part series on Professional Collaboration, we are going to look at 6 types of collaborative enterprise models in the next 6 articles. Today’s topic is Partnerships.
The term “partnership” has many different meanings in different contexts. We use it to describe our personal relationships or to describe a formal business structure between two people. It can also describe any time we join with another person on any official, unofficial, formal or informal venture. In order to clarify it’s meaning as a Collaborative Enterprise Model, we will call it a Collaborative Partnership and define it as “agreements and activities to share resources, made by consenting organizations, in order to accomplish a mutual goal or project”. Collaborative Partnerships are not typically delivered by the creation of a legal entity or through legal agreements. They are often formal, yet not legally binding. They commonly use tools like a Memorandum of Understanding (MOU), A Joint Venture Agreement (JV), or a Term of Reference (TOR) to outline rules and expectation of the Collaborative Partnership.
This flexible and optional non-legally binding opportunity for collaboration is a very important tool for organizations looking to deliver on ambitious goals. According to the President of PayPay Canada in a Globe and Mail article:
“There is no better approach to solving challenges than the famous saying,’two heads are better than one’. Whether creating internal partnerships between colleagues or departments, to larger partnerships between businesses, harnessing the strengths and abilities of others from different corners of your ecosystem is one of the most strategic ways for businesses to scale their innovation and solve complex challenges.”
Collaborative Partnerships are about individuals, companies or people being aligned toward a common goal with an upfront agreement and rules of engagement. These are often referred to as a Joint Venture. It is an excellent option for starting a project with clear expectations, making gains, and avoiding an overly administrative start up process that can slow momentum.
How do Collaborative Partnerships work?
There are two main models of Collaborative Partnerships that are in common use. The main distinction between a partnership and other collaborative enterprise models is that the collaborative partnerships are typically not about creating a legal agreement or entity. They are more about developing a professional understanding that allows each partner to engage in a way that plays to their strengths.
Collaborative Partnership Model 1: The Resource Shelter
A Resource Shelter is a partnership where a larger, more established and resourced agency houses the project and uses its profile and assets to provide stability to the project. The smaller, more specialized agencies’ role in the project focuses on their individual area of strength. This allows them to build capacity and grow from the stability of the larger agency. This model is most successful when applied to offer a new or extended service or expanding into a new market. An example of this model would be if a Health Clinic that was only providing general practitioner medial services were to bring into their clinic; physiotherapists, osteopaths, and massage therapists. The Health Clinic would be the Resource Shelter, providing a space, marketing support, referrals, and administrative support to the individual specialists. In return, it creates an easy and convenient referral system for their patients and more activity in their clinic. If the creation of a new legal entity was required for this, it is likely that the smaller specialists would not participate out of fear of legally binding and administrative intensive responsibilities.
To pull off this type of Collaborative Partnership, the partners need to stay aligned and ensure that their communication, work ethic, and values are in line, otherwise, there could be friction. Depending on the size and scope of the support required by the smaller agencies, the drain on the Resource Shelter could be damaging to its stability. It is really important to have a strong understanding in place, something like a Joint Venture Agreement, and that the partnership is about ensuring that only the agencies’ surpluses are required.
Collaborative Partnership Model 2: Value-Add Alliance
A Value-Add Alliance is a group of skilled and dedicated entitles or individuals who are looking to band together to tackle a challenge or offer expanded service. The group inventories their skills and areas of specialization to look at a cooperative effort to make gains in a complex or multifaceted environment. The Value-Add Alliance acts as a league of skilled individuals brought together by a common goal or vision, that has a professional agreement or terms that outline the details of the partnership. The Alliance presents itself as a unified entity (similar to a consortium) but is not a separate legal entity. This model is most successful when applied to sell combined value-added services offered by the partners, or when tackling large scale problems or challenges that no individual could manage alone.
An example of a Value-Add Alliance would be a group of consultants with specialized skills, that may have some overlap, coming together to co-bid on large contracts. This allows individuals who would not be qualified to tackle the job alone, to bid on such contracts. Another fun example for the inner child in you would be a superhero team. Groups like the Avengers or the Justice League are good examples of a team of uniquely skilled individuals who band together to offer their services and deliver on tasks too large or complex for them to handle alone.
Like the Resource Shelter model, in order to pull off this type of Collaborative Partnership, the partners need to stay aligned and ensure that their communications, work ethic, and values are consistent, otherwise, there could be friction. A Joint Venture Agreement, or something like it, would be a wise investment at the beginning. If there are major projects or tasks acquired by the Value-Add Alliance, the partners need to be in it for the duration. They need to ensure that even without the legally binding agreement, they will hold up their end and deliver the quality of work that the Value-Add Alliance needs in order to be successful as a whole.
If a group of individuals and specialists are looking to extend their reach, then they should consider creating a Collaborative Partnership. However, it is vitally important when they do create a partnership that they are aware of their deficits and are approaching potential partners by speaking to their surpluses. You want to make sure everyone is able to get what they need to deliver and that everyone is only giving what they can afford to offer. It is vitally important to ensure that there are trust and constant communication going on among everyone involved. The group is only as good as what they can deliver. If there are any doubts, concerns, or areas of improvement, they can only be handled by strong communication and trust in order for them to be solved before they become problems.
To learn more about Collaborative Partnership, contact our team at email@example.com
Roman 3 is an advising and solutions firm that specializes in inspiring progressive action, creating a culture of innovation, and assisting organizations in implementing transformative change. We help you build capacity, collaborate, be progressive, and grow to your full potential. For more information on our services and support check us out at www.roman3.ca