PARTNER UP for success! Check out the game-changing benefits of this return-driven principle!

Tuesday: Return Driven Strategy FROM THE DESK OF MILES EVERSON: Have you heard about Return Driven Strategy (RDS)? This pyramid-shaped framework has 11 tenets and 3 foundations that help businesses effectively implement their branding and marketing strategies. Professor Joel Litman and Dr. Mark L. Frigo explain this in detail in the book, “Driven.” We encourage you to read about RDS during your spare time, too. Personally, I appreciate studying this framework because its principles are applicable to all aspects of running a successful business. For today’s article, let’s talk about the seventh tenet of RDS. Keep reading to know the importance and benefits of “partnering with purpose.” CEO, MBO Partners Chairman of the Advisory Board, The I Institute

PARTNER UP for success! Check out the game-changing benefits of this return-driven principle! In the business world, success is rarely achieved alone. While individual talent and expertise are important, partnering deliberately with the right companies, organizations, and individuals is also key to unlocking new opportunities, expanding your reach, and achieving sustainable growth. Think about the Power Rangers combining their strengths to defeat a common enemy! It's just that in this case, the enemy is a business challenge, and the Power Rangers are other companies and people who can help you overcome such an obstacle. By teaming up with the right businesses or individuals, you can achieve more together than you could on your own. Whether you’re a small business owner or a CEO of a large corporation, there will be instances where you and your team would need additional support or expertise. In this article, we’ll learn more about the amazing benefits of partnering deliberately in the business world… Partnering With Purpose In the book, “Driven,” authors Professor Joel Litman and Dr. Mark L. Frigo state that the seventh tenet or the first of five “Supporting Tenets” of a return-driven organization is to partner deliberately. According to them, this tenet is a necessary contributor to high performance, as it supports the creation of offerings. This means wealth-creating firms choose their partner/s wisely as the first 6 tenets of the Return Driven Strategy (RDS) framework dictate. The RIGHT partnerships will allow businesses to focus on their strengths AND rely on others to do things they ought not bother. What’s more? The strongest partnerships will bring unique assets together to allow firms to innovate, brand, and deliver truly unique offerings—Tenets 4, 5, and 6 of RDS. What happens then to businesses that form partnerships indiscriminately? Professor Litman and Dr. Frigo say poor returns follow companies that partner for reasons that don’t support RDS’ higher tenets. These firms either feel they must make partnerships or acquisitions simply because their competitors are doing so or enter into partnering arrangements because another firm has experienced its benefits. Different Kinds of Partnerships There are several forms of partnerships, which range from being “very open” to “very exclusive.” Open partnerships include basic arm’s length transactional relationships, while exclusive partnerships include legal joint ventures between two firms. Below are some examples of these kinds of partnerships: Open Partnerships Basic vendor-customer models Bid-ask models or auctions Simple buy-and-sell transactions Exclusive Partnerships Joint ventures Partial ownership stakes Exclusive license contracts Mergers and acquisitions It’s also important that when partnering with other firms or individuals, management teams are certain that the agreement or relationship has a specific purpose that fulfills RDS’ higher tenets. Examples: Pharmaceutical giants Takeda and Abbott formed TAP Pharmaceuticals in 1977 to leverage each other’s sales distribution networks. The primary reason for this partnership was to provide customers with drugs they wouldn’t otherwise get as efficiently as through TAP. After failing in its attempt to build its own e-commerce business, Toys R Us teamed up with Amazon.com to efficiently supply its toys to customers over the Internet. In these instances, we can see that these businesses didn’t form partnerships with little to no purpose. In both cases, the firms’ goals were in line with RDS’ higher tenets, such as fulfilling otherwise unmet customer needs, targeting the right customer groups, etc. — According to Professor Litman and Dr. Frigo, the right level of partnering depends on the importance of a partner’s assets in the creation of a unique, need-fulfilling offering. If a partner’s assets are only marginally essential, then open partnerships will do. However, if a partner’s assets are absolutely essential, then exclusive partnerships must be done to ensure the strategy’s long-term success and viability. Keep these insights in mind if you’re planning to strike a partnership with another firm in the future! Partner deliberately. This will help you consider a wide range of potential partnerships and be creative in developing new types of relationships that support the core competencies of your firm. Also, if you're looking to gain a better understanding of Return Driven Strategy, we highly recommend checking out “Driven” by Professor Litman and Dr. Frigo. Click here to get your copy and learn how this framework can help you in your business strategies and ultimately, in ethically maximizing wealth for your firm. Hope you found this week’s insights interesting and helpful.     Stay tuned for next Tuesday’s Return Driven Strategy! Have you ever felt stuck in your career or unsure of where to go or what to do next? Learn more about the importance of self-determination skills in next week’s article!