Effective partnerships drive innovation

by Adam L Stanley | Oct 2, 2017 | Leadership, Relationships, Technology, Vendors and Partners

What Makes a Great Partnership?

The business world today is in a state of flux. New companies enter the ecosystem every day, bringing with them new technologies and business models, any one of which could transform an entire industry from the ground up. Most companies want to use this current of change to drive innovation. But the magic bullet is elusive as ever — the question is how best to drive innovation. For many, acquisition seems the only path to take through these disruptive forces of change. But I’d argue there is a different and more flexible way forward: PARTNERSHIP.

Partners help a large organization pivot and adapt in today’s constantly changing business environment. Great outside partners help navigate rapidly changing waters. Those partners could include universities whose research expertise can be leveraged into game-changing R&D, accelerators that can source bleeding-edge innovations from all around the world, and agile startups that can experiment nimbly with new processes and ideas. By collaborating with smart organizations of all sizes, corporations drive productivity gains both for their customers and for their own professionals. It’s a win-win for all parties.

So how do you build a successful partnership? Still no magic bullet and I am by no means saying I’m the best at this. However, based on my experience forging partnerships with startups, tech accelerators, universities, and more, here are four elements I believe are essential:

Mutual benefit

In a good partnership, both partners should gain, emerging from the relationship better than they were before. To ensure this, it’s vital to define all parties’ goals clearly and upfront. According to a KPMG study, some of the most common goals for startups partnering with corporates are gaining access to the market (65%), raising capital (54%) or taking advantage of economies of scale (54%). Meanwhile universities pursuing outside partnerships may be seeking funding to replace public and government sources that have dried up in recent years. You’ll never know what any particular partner wants to get out of the relationship, though, unless you ask—every relationship is different.

Corporations should do some soul-searching too and figure out what their strategic objectives for the partnership are beyond broadly promoting innovation. What unmet client needs will your partner help address? How will the partnership augment your company’s own internal resources and processes? Great partnerships are based on a solid business case, not irrational impulse.

Trust

True partnerships depend on trust and faith, not just carefully worded contracts. You and your partner will be engaging with each other at a deeper level than a simple vendor/customer relationship, and that means you won’t just share goals and objectives but common values, too. Don’t hold back that deeper bond with too much red tape. As a 2016 Imaginatik/MassChallenge report on the state of startup/corporate collaboration puts it: “Lengthy up-front negotiations over IP concerns, access to talent, and expected time commitments may protect against exposure, but almost always lead to gridlock and failure.” Though it is important to define the terms of the relationship up front, a great partnership shouldn’t be micromanaged. Mutual understanding and trust should be your guide.

Evolution

This goes hand-in-hand with the trust element. You can never know at the beginning exactly how the relationship will develop—it continues to evolve as you and your partner learn more about each other. Many corporations will need to adapt their processes to suit the needs of their partners over time. For instance, some experts suggest creating special “fast-track” versions of processes like procurement and invoices specifically for startup partners, which often need to move faster than the large organizations with which you might be used to working. By contrast, university academic research often proceeds at a slower pace than corporations are used to. A study published in MIT Sloan Review suggests corporate partners define a specific timescale for each university engagement with an eye to encouraging more long-term instead of short-term involvement. Overall, the key is: adapt, adapt, adapt. You’ve invested in this partner, so do what it takes to make the relationship work for you.

Rough spots

No matter how successful your partnership ends up being, you will have down days that cause you to question the relationship. That’s okay—that is part of the process. Heck, I certainly don’t know of a perfect personal relationship and a corporate/startup partnership is completely optional for both parties. Leverage some of that trust and faith to talk through issues with your partner and brainstorm possible solutions. Do they need more access to mentors and advocates in your organization? Closer connections to clients? Faster turnaround on invoicing? Do what you can to make it happen.

It’s possible, of course, that the problems go deeper than that. Sometimes, a rough spot turns into a series of rough spots, which then turns into a sense that neither partner is getting the things out of this relationship that they wanted. That’s okay, too. Partnerships don’t have to last forever to be worthwhile—they can be for a season. Just remember to end things with your former partner on good terms: you never know when you might want to collaborate with them again in the future.

There’s no way around it: building great partnerships takes a lot of time and effort. When it’s done right, however, the results speak for themselves. Partnerships are probably the most effective way a large organization can drive innovation and adapt to today’s changing tech landscape—getting there just takes a bit of dedication and faith.

Be well. Lead On.
Adam

Adam L. Stanley Connections Blog
Technology. Leadership. Food. Life.

AdamLStanley.com

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Do IT Like Darwin

by Adam L Stanley | Sep 15, 2017 | Leadership, Technology

This blog first appeared on CIO.com.

What’s Darwin going to teach us about business in 2017?

It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.
Charles Darwin (misattributed)

So it turns out most people think that Darwin never really wrote this or said it, though if you read his other works it clearly seems to fit within the realm of his general thinking.^[1]

Darwin died in 1882. He was deceased before the Wright Brothers, Henry Ford, and some of the initial titans of industry came along with their landmark inventions. And yet, if you read Darwin’s writings and follow his broader patterns of thinking, there are a lot of lessons you could adopt for business in a very different time.

Adaptability is a misunderstood term

Adaptability is very important to the human condition, yes, but it’s misunderstood in a broader business context because of how we associate it with the word “agile.” A lot — A LOT! — is written about agile these days. True fact you need to embrace: absolutely no one in your business units cares about “agile methodology.” They care about how you aggregate demand, prototype rapidly to meet that demand, and make sure you are always determining what your clients need. No one cares if you’re adaptable, agile, waterfall, or straight 1950s hierarchy style. They care about whether you’re generating revenue as a result of your programs.

Don’t be a wuss

I’ve seen so many CIOs just take orders in meetings. They don’t get that “seat at the table.” Technology should absolutely be driving the innovation process in companies right now, not (a) enabling it or (b) restricting it, with path (b) being all too common. Step up and say what your side of the house can do. You may be in a room of legacy thinkers who won’t get it, so make them get it. It’ll take more than one meeting or interaction, but so much money (savings/generated) is on the table, it needs to click.

The paradox of becoming obsolete

Andy Grove, a founder of Intel, used to say that you know someone is a good manager when they make themselves obsolete in the role. (It’s true if you think about it, but that’s not what this post is about.) The same concept goes for processes. If you love the system you built like a first-born child, that’s great. It’s now time to make it obsolete. If you don’t find the holes, break it down, and build it better — someone external to your company will. That’s when the crap truly hits the fan. Figure out how to kill your systems, then build a version you’ll love even more. (And then kill that one.)

Be Archer

I love Archer. Whenever he talks about “the danger zone,” I laugh out loud. Why? Because I’d much rather talk about “the danger zone” at work than have another presentation about agile methodology. You need to live on the edge a little bit. Not in terms of professionalism — keep it real there — but in terms of, don’t stop being scared. Fear drives a lot of business, so fly that plane right into the danger zone and see how you come out of it.

Find your meerkat sentries

To look out for predators, one or more meerkats stand guard completely still. They keep watch, ready to warn others of approaching dangers. When a predator is spotted, the meerkat performing as sentry gives a warning sound, and everyone splits. When you build out the right team, they help you survive the bad times — and if you permit naysayers (you should), they will even bring up the threats before you see them. You need more meerkats.

Big doesn’t mean best

An elephant can dance but it is hard as hell to do so and there can be tons of collateral damage. The reality is the biggest players in most industries stifle competition — and thus stifle innovation. The meteoric or volcanic activity that ended Tyrannosaurus Rex’s reign opened the door for mammals to rapidly diversify and evolve into newly opened niches.^[2] If you are small, be ready to pounce when the big guys start to fall. If you are big, think like a small guy. You know how Instagram beat all the existing photo giants to the digital sharing punch? They asked the right questions, solved the right pro blems, and had the product ready. What did the big photo companies — who were already developing tech similar to what Instagram was doing — do? They did what they always do: thought like a big company, which means an over-focus on hierarchy and checking boxes instead of solving problems and iterating. The small guy won. The ecosystem changed. It happens all the time. Be ready.

Do it like Darwin

Clearly some disagree with many of Darwin’s principles on evolution and I won’t go there. But that one “quote” of his, really more of a paraphrase, can be highly instructive if applied to your environment. Whether you are a CIO/CTO, a sales and marketing leader, in product design or even Human Resources, you can and should Do It Like Darwin. Adapt. Stand firm. Find your guards. And don’t be a victim of size.

Be well. Lead On.
Adam

Adam L. Stanley Connections Blog
Technology. Leadership. Food. Life.

AdamLStanley.com

Follow me on Twitter | Connect with me on Linked In | “Like” me on Facebook

Be sure to view all of the Top Traits:
Trait 1: Hard working AND talented
Trait 2: Pride in work product
Trait 3: Fun to work with

^[1] ‘According to Darwin’s Origin of Species, it is not the most intellectual of the species that survives; it is not the strongest that survives; but the species that survives is the one that is able best to adapt and adjust to the changing environment in which it finds itself.’ (Megginson, ‘Lessons from Europe for American Business’, Southwestern Social Science Quarterly (1963) 44(1): 3-13, at p. 4.)

^[2] http://www.nationalgeographic.com/science/prehistoric-world/dinosaur-extinction/

Avoid the Value Destroying Arms Race

by Adam L Stanley | Jun 20, 2017 | Technology

This blog was coauthored with Leif Maiorini, a tremendous leader within my team at Cushman & Wakefield. These are our views and not necessarily those of the company.

Your “citizens” do not need another arms race

You’re probably familiar with terms like “arms race” and “mutually assured destruction.” This refers to the Cold War period (1947 – 1991) between the U.S. and then-Soviet Union, who stockpiled nuclear arsenals to keep each other at bay. Now, it is true that none were ever deployed. Thus, we have two countries with lots of dead/decaying warheads, which is a costly mess to unwind economically and ecologically.

The net result is a great deal of value destruction (trillions of dollars). Driven by differences in social, economic and political points of view, their mutual desire to suppress the expansion of the other’s ideology is likely one of the greatest wastes of economic, political and social capital ever enacted.

The result was driven by fear, fear that the other would have a strategic advantage or a capability that would be used to tip the scale, changing the balance of power and resulting in global expansion of their opponent’s interests. The panic that one party would have an advantage over the other led to a considerable amount of irrational investment that would only be apparent in hindsight, long after the capital was spent, the leaders gone, and the stakeholder value destroyed.

You’ll hear the same term — “arms race” — applied to corporate America a lot right now. Nuclear war is far more serious than a concept like acqui-hiring, yes. But the arms race in corporate America, mostly seen through M&A, has the same root: irrational fear that the competition is getting ahead and need to take bold action to ensure that they have a defensive position. Far too often, ego-driven, growth-seeking leaders allow their personality get in the way of strong decision-making and experience (which presumably got them to that perch).

Many corporations are in their own version of a “cold war.” Afraid that their competitors might have an advantage, they rush into risky investments that usually result in a destruction of value for their stakeholders. Few companies get the synergy promised in their business case when they acquire another entity. More often than not, the acquiring company overpays and the culture clash results in a type of organ rejection that jettisons the best minds from the combined entity leaving the shareholders with a fraction of the anticipated value.

When you make decisions from a place of fear, power and ego, it can cloud your decision-making massively. The decisions that result are sub-optimal at best and essentially destroy companies at worst.

A good example here would be Hewlett Packard. They bought a company called Autonomy for $11.7 billion in 2011; because of accounting issues around that deal, they had to take a $8.8 billion write-down, which knocked out all their profits for an entire quarter. Some people have called HP and Compaq the worst merger in tech history. Meg Whitman has engineered an incredible turnaround there, but the company today is a much smaller version of what it was at peak.

Arms races rarely serve the best interests of “citizens”, in the case of corporations, our clients and customers. Thus, we believe we must seek first to understand unmet client demand and then invest in technologies and solutions that address those needs. We will not make technology investments from a position of fear, ego, or irrational impulse.

We continue to find partnering the most advantageous strategy for this rapidly changing space. With hundreds of start-ups entering the commercial real estate ecosystem each year, the ability to pivot and exploit the best solution is greater if you are able to partner. Few solutions offer true, differentiated capabilities and our clients dictate that we leverage and support a wide variety of solutions, often solutions that are seen as competing. This is difficult to do without an open, partnership approach.
We are a global real estate services company that leverages technology to increase the value we deliver to our citizenry. Acquiring a technology company does not make us a technology company, nor does it justify trading at multiples of revenue rather than EBITDA; thus it is possible that value is destroyed by most technology acquisitions. We look to strategic partnerships with aggregators like DMGI and Accruent as ways to support continued growth and investment in CRETech.
We continue to partner with innovative accelerators like MetaPropNYC, 1871 in Chicago, and Moderne Ventures to identify new players that could help us meet the needs of our clients as we work toward a POC as a Service model across our markets.
Our focus is on making our service lines more productive, creating a level of interconnectedness between them and our client, and providing the analytics that enable more effective decision making. Given that for most companies, real estate is their top (or second) largest expense, helping our customers get the greatest value from this investment is our top priority. .

So here’s the soapbox – Stop the arms race. The arms race described above — the Cold War version — certainly didn’t benefit any citizens. Companies have “citizens” too, those being clients and customers. So before you go out and make an irrational decision, ask a few questions:

What are the unmet client demands?
How should this demand be addressed? What are the solutions that create the greatest value?
Has this problem been solved? Is there something in the market (or a derivative market) that could help solve them?
What is the option that results in the greatest benefit to all parties and the greatest value for our customers?
What is the value of an acquisition, investment, or partnership? Who benefits? Are there competing solutions and will our strategy result in a transient, strategic, or little/no advantage for our stakeholders?
Would we be positioned to buy this market player? Is that the right decision?
What would that look like financially and culturally?
Are we buying this tech just to buy it, or is this serving a need and researched?

We believe that answering these questions, playing out the scenarios, and looking at the outcome with a high level of scrutiny will result in less acquisition activity, greater partnerships, and higher overall value for all involved.

Adam L. Stanley Connections Blog
Technology. Leadership. Food. Life.

AdamLStanley.com

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