Accelerating innovation with strategic partnerships

“Business and technology partnerships can unlock tremendous value for customers, provide high leverage on organisational resources, and accelerate growth for companies. However, most companies are lacking an intentional partnerships strategy, and have very limited partnership management capabilities. As a result, they are leaving a lot on the table with ‘accidental’ approaches to partnerships”, says Bharat Nagda, a California based partnerships strategy expert as he talks about his book ‘Building Partnerships for Sustained Impact’.

Nagda says he is on a mission to spread awareness about the tremendous benefits of a well crafted partnerships strategy and partnership management capabilities, in helping companies grow rapidly. For every company like Netflix, Okta, or Slack that excels at developing business partnerships to rapidly provide value to their customers, there are 10 others that are behind the eight ball, says Bharat.

An engineer by trade, Bharat graduated from the prestigious Indian Institute of Technology, Bombay, which has an admission rate of less than one per cent, much lower than even the most prestigious of universities across the globe. He says, P&G’s distribution partnerships in India and across the globe, where he worked for first job out of college, fascinated him about this space. “Seeing how P&G employed different partnerships designs for product distribution across the globe was extremely fascinating for me and got me very intrigued about the power of business partnerships. Soon after, I joined an auto manufacturer to first hand lead the strategic partnership with a Japanese company, and that got even more interested in the space.”

Bharat went on to study business administration at the University of Michigan, a top 10 US school, and joined Booz & Co., a prestigious global strategy consulting firm where he helped companies master their partnerships game, from strategy through execution. He developed partnership management playbooks that were employed by hundreds of partnership managers at his large, global clients. He then moved on to help implement his thought leadership at other large global corporations in manufacturing, technology, and other industries.

Nagda says that the last decade of his professional experience working with technology and strategy consulting organisations on topics ranging from partnerships strategy design, has made him see the huge opportunity in helping companies and CEOs in this space. "I have worked with some of the sharpest minds in business, and listened to many business leaders and CEOs talk about growth and innovation, however partnerships is not really top of mind for them as they tend to think inside the box. But there is a huge opportunity outside the box”, says Bharat. So he penned a book to help him scale the learnings and best practices from over a decade in helping companies develop and execute upon partnership strategy and programmes.

Bharat’s book starts with a basic introduction to partnerships and gradually goes into advanced topics that are key to implementing a strong partnerships strategy. He emphasises on a capabilities based assessment of an organisation to determine core value creation capabilities and secondary value addition capabilities. While each company must protect the core capabilities in house, the secondary capabilities are also important to success and prime for strategic and business partnerships, he says and delves further into how to identify the areas to go after. The book ends with a few frameworks for an organisation to implement partnership-management best practices and playbooks.

“Partnerships are the future of how the most successful companies of the future will operate and rapidly deliver value. The age of building most capabilities in-house is behind us. For illustration, as we look forward to a world with rapid improvements in Artificial Intelligence capabilities, it’ll have two types of organisations —companies that create AI based capabilities and models, and companies that utilize those models to improve existing products or features. But given the strategic implications and amount of co-creation required, a strong partnership mindset and capability will be critical for success. This truism is not just applicable to AI, but all companies and capabilities.”, says Nagda.

He shares that an accurate strategy, well crafted organisational design, and strong execution capabilities are all required to maximise value creation. There are numerous examples of companies like Chipotle implementing, what he calls, “accidental partnerships capabilities”, which result in suboptimal realization of the value from partnerships. So, he encourages executives to analyse the areas where partnerships have the most potential for value creation, and then allocate resources to different functions appropriately to ensure the plans are executed well.

“Even after identifying areas of opportunity for partnerships and setting up a partnerships org, it is imperative to have the right support structures to see those partnerships succeed. Companies like Tesla cannot enter a strategic partnership with Panasonic for battery technology without investing significant resources from R&D, Operations, Quality, Market Research, etc. supporting the partnership team. Similarly, OpenAI cannot support Microsoft’s Bing search engine without significant technical, product, and UX collaboration for a flawless execution," stresses Nagda.

“Once you’ve set up a partnership, it's equally important to ensure there are processes, tools, and internal resources to be successful. For example, in a strategic innovation partnership like the one between Tesla and Panasonic, you need the tools to align on vision, objectives, and methodologies from the get go. If your partnership team is incapable of conducting such an exercise effectively, you are set up for failure and tremendous friction down the line.” This is one of the examples, but Nagda goes deeper with end-to-end best practices in his book.

As the pace of innovation quickens, global collaboration becomes more seamless, and the window to monetise products shortens, business partnerships will move from being a fringe capability to becoming the core of how companies go to market. Bharat’s book and work are helping build the critical thinking and capabilities needed for the world to evolve into the new ways of working.

— Shagun Sharma is a business journalist.

• KT Network