Teaming Up – Partnership BasicsTeaming Up – Partnership Basics

withwith Meg Tully, CAEMeg Tully, CAE

Association Development DirectorAssociation Development Director

What Will You Learn?What Will You Learn?

Partnering BenefitsPartnering Benefits What Are Partnerships?What Are Partnerships? Four Stages of PartnershipFour Stages of Partnership

ReadinessReadiness IdentificationIdentification FormationFormation MaintenanceMaintenance

When to Call it QuitsWhen to Call it Quits

AcknowledgementsAcknowledgements

Material for this presentation is Material for this presentation is taken from the book taken from the book The Power of The Power of PartnershipPartnership by Plexus Consulting by Plexus Consulting Group, LLC and published by Group, LLC and published by ASAE and the Center for ASAE and the Center for Association Leadership and the Association Leadership and the US Chamber Commerce, 2008.US Chamber Commerce, 2008.

Book can be ordered from the ASAE Bookstore.Book can be ordered from the ASAE Bookstore.

Did You Know?Did You Know?

One of every two partnerships fail, One of every two partnerships fail, according to a study of more than according to a study of more than 1,000 partnerships entitled 1,000 partnerships entitled “When “When to Ally and When to Acquire,”to Ally and When to Acquire,” published in the Harvard Business published in the Harvard Business Review (July/August 2004).Review (July/August 2004).

Two Key Findings for Successful Two Key Findings for Successful PartnershipsPartnerships

Each partner must benefit in some Each partner must benefit in some strategicstrategic way. way.

Each partner must Each partner must understandunderstand and and respect respect the other’s needs.the other’s needs.

Why Pursue Partnerships?Why Pursue Partnerships?

86% of respondents said 86% of respondents said “to achieve a goal that the “to achieve a goal that the association could not achieve alone.”association could not achieve alone.”

Reach broader market segments, gain market Reach broader market segments, gain market intelligenceintelligence

Advance IECA’s Mission Advance IECA’s Mission (IECA connects, educates and develops the worldwide erosion and sediment control community.)

Develop new ways of working, improve efficienciesDevelop new ways of working, improve efficiencies Gain access to additional resources, expertiseGain access to additional resources, expertise Increase financial stabilityIncrease financial stability Present unified views on an issue or policyPresent unified views on an issue or policy Increase power and prestigeIncrease power and prestige

Partnership DefinedPartnership Defined

Partnership:Partnership: A cooperative agreement between A cooperative agreement between 2 or more organizations where, without 2 or more organizations where, without subsuming their individual identities, the involved subsuming their individual identities, the involved parties share the profits and/or losses of the parties share the profits and/or losses of the activities they undertake together. activities they undertake together.

Legal:Legal: An unincorporated business organization An unincorporated business organization created by contract between 2 or more entities in created by contract between 2 or more entities in order to carry out a common enterprise. order to carry out a common enterprise.

Types of PartnershipsTypes of Partnerships General PartnershipGeneral Partnership, Limited Partnership, Limited Liability , Limited Partnership, Limited Liability

Partnership, Limited Liability CompanyPartnership, Limited Liability Company Independent ContractorIndependent Contractor Commercial Co-VentureCommercial Co-Venture Joint Venture:Joint Venture: Partnership formed through the establishment of a Partnership formed through the establishment of a

separate legal entityseparate legal entity Task-Oriented:Task-Oriented: Designed for a specific purpose or project Designed for a specific purpose or project

(organizing a conference, producing a publication)(organizing a conference, producing a publication) Process-Oriented:Process-Oriented: Value is derived from a process with less tangible Value is derived from a process with less tangible

results, like marketing or public educationresults, like marketing or public education Non-Profits with For-ProfitsNon-Profits with For-Profits Non-Profits with Non-ProfitsNon-Profits with Non-Profits Non-Profits with Government AgenciesNon-Profits with Government Agencies

Partnerships Are NotPartnerships Are Not

Mergers or AcquisitionsMergers or Acquisitions SponsorshipsSponsorships Business RelationshipsBusiness Relationships (commercial (commercial

transactions) that involve a contract for transactions) that involve a contract for payment of products and services. The payment of products and services. The risk is borne by one party alone.risk is borne by one party alone.

““The litmus test of a partnership is the extent to which the parties The litmus test of a partnership is the extent to which the parties involved equally bear the rewards of success and the risk of involved equally bear the rewards of success and the risk of

failure.” failure.” (page 17)(page 17)

Stage One - ReadinessStage One - Readiness StrategyStrategy must drive partnerships. must drive partnerships. Be ProactiveBe Proactive - Identify strategic need that IECA - Identify strategic need that IECA

can’t achieve on its own – involve Board, FAST, can’t achieve on its own – involve Board, FAST, Chapters in strategic planning processChapters in strategic planning process

Desirable Strategic DirectionsDesirable Strategic Directions Increase membershipIncrease membership Increase resourcesIncrease resources Increase revenueIncrease revenue Enhance visibility or brandEnhance visibility or brand Expand current markets (or develop new ones)Expand current markets (or develop new ones) Minimize the risk of an innovationMinimize the risk of an innovation Maximize use of resourcesMaximize use of resources

Know ThyselfKnow Thyself VisionVision MissionMission Principles, ValuesPrinciples, Values GoalsGoals – Should be measurable – Should be measurable Strategic environmentStrategic environment

Internal (organizational culture, staff, volunteers)Internal (organizational culture, staff, volunteers) External (economy, competitors, politics)External (economy, competitors, politics)

Knowing the above will:Knowing the above will: Help define value propositionHelp define value proposition Identify areas where partnering will be most helpfulIdentify areas where partnering will be most helpful Parameters around which to structure partnershipsParameters around which to structure partnerships

Stage Two: Identification Stage Two: Identification (Finding the Right Partner)(Finding the Right Partner)

Identify areas of Identify areas of greatest needgreatest need based on based on strategic objectives.strategic objectives.

List List possible partnerspossible partners that can help that can help overcome each obstacle.overcome each obstacle.

ResearchResearch and start and start networking.networking. Be sure you understand the Be sure you understand the capacitiescapacities

and and limitslimits of IECA and the potential of IECA and the potential partner.partner.

Strategic FitStrategic Fit

Does identified partner have:Does identified partner have: Complementary mission?Complementary mission? Compatible goals and interests?Compatible goals and interests? Agreement on principles?Agreement on principles? Strong individual contributions?Strong individual contributions? Clear understanding of liability?Clear understanding of liability? Willingness to walk away each year?Willingness to walk away each year? Culture of partnering for organizational Culture of partnering for organizational

management and growth?management and growth?

Stage Three: Formation Stage Three: Formation (Formalizing the Partnership)(Formalizing the Partnership)

Goal, Roles & Responsibilities:Goal, Roles & Responsibilities: Define Define goal and identify how each partner will goal and identify how each partner will offer support to achieve itoffer support to achieve it

Get it in Writing:Get it in Writing: Put the operational Put the operational agreement in writingagreement in writing

Communicate:Communicate: Inform all stakeholders Inform all stakeholders Agree:Agree: Finalize and sign agreement Finalize and sign agreement Accounting:Accounting: Segregate funds and protect Segregate funds and protect

from conflict of interestfrom conflict of interest

Six Points for Successful Six Points for Successful PartnershipsPartnerships

Partnership based on Partnership based on strategicstrategic reasons reasons Partners Partners complementcomplement each other each other Negotiating team consists of Negotiating team consists of top staff, top staff,

volunteersvolunteers and and legal counsellegal counsel Agreement has Agreement has one year termone year term and provision for and provision for

withdrawalwithdrawal All parties have All parties have equal statusequal status, and decision-, and decision-

making is based on making is based on consensusconsensus Key Key stakeholders informedstakeholders informed through a timely, through a timely,

concise documentconcise document

Types of Agreements & Types of Agreements & ConsiderationsConsiderations

Gentleman’s AgreementGentleman’s Agreement Detailed Operating AgreementDetailed Operating Agreement New Legal EntityNew Legal Entity Agreement should address:Agreement should address:

Due DiligenceDue Diligence ConfidentialityConfidentiality Intellectual propertyIntellectual property Form of partnershipForm of partnership Tax-Exempt requirementsTax-Exempt requirements PerformancePerformance TimelineTimeline IndemnificationIndemnification Antitrust ComplianceAntitrust Compliance Representations and warrantiesRepresentations and warranties Term, Termination and TransitionTerm, Termination and Transition

Stage Four: MaintenanceStage Four: Maintenance Ongoing support from each partner to indicate Ongoing support from each partner to indicate

commitmentcommitment 6 Key Elements6 Key Elements

Mutual Trust and RespectMutual Trust and Respect Structured and Open CommunicationStructured and Open Communication Established Points of ContactEstablished Points of Contact Complementary Vision, Mission, ValuesComplementary Vision, Mission, Values Clearly defined Roles and ResponsibilitiesClearly defined Roles and Responsibilities Well-Defined Metrics of SuccessWell-Defined Metrics of Success

““Communicate everything. Discuss everything. If you are Communicate everything. Discuss everything. If you are open about what you’re doing and what’s happening, the open about what you’re doing and what’s happening, the

partnership will have fewer difficulties.” partnership will have fewer difficulties.” – – Government official (page 55)Government official (page 55)

When To Call It QuitsWhen To Call It Quits Failure IS an Option.Failure IS an Option. Red FlagsRed Flags

Loss of authority or identityLoss of authority or identity Consistently missing goalsConsistently missing goals Frequent breakdown in communicationFrequent breakdown in communication Lack of commitmentLack of commitment Hidden agendas/unequal partnershipsHidden agendas/unequal partnerships Lack of agreement on goals in advanceLack of agreement on goals in advance Leadership failureLeadership failure Mistrust/ego issuesMistrust/ego issues

““End a partnership as objectively as possible – because you still have End a partnership as objectively as possible – because you still have to live with each other. That is why contracts are so important; the to live with each other. That is why contracts are so important; the

emotion must be taken out if the partnership doesn’t work.” emotion must be taken out if the partnership doesn’t work.” – – Executive Director of a tradeExecutive Director of a trade association (page 71) association (page 71)

ChecklistChecklist

1.1. Talk & Plan:Talk & Plan: Start having discussions with Board, staff, members on how Start having discussions with Board, staff, members on how partnerships can support strategic plan and mission.partnerships can support strategic plan and mission.

2.2. Know Thyself:Know Thyself: Prioritize strategic needs, recognize strengths, contacts, Prioritize strategic needs, recognize strengths, contacts, resources IECA has and doesn’t have.resources IECA has and doesn’t have.

3.3. Research:Research: Do homework on potential partners to find the best fit. Do homework on potential partners to find the best fit.

4.4. Establish the Partnership:Establish the Partnership: Draft contract, define joint goals, roles and Draft contract, define joint goals, roles and responsibilities.responsibilities.

5.5. Maintain Partnership:Maintain Partnership: Develop guidelines for communication, decision- Develop guidelines for communication, decision-making, assessing progress, conflict-resolution, etc. Assess annually how making, assessing progress, conflict-resolution, etc. Assess annually how well partnership demonstrates 6 Key Elements (slide 17).well partnership demonstrates 6 Key Elements (slide 17).

6.6. Termination:Termination: Have an exit strategy in place. Have an exit strategy in place.

Good Luck!Good Luck!A successful partnership program A successful partnership program involves sound strategic planning, involves sound strategic planning, thorough research and diligent thorough research and diligent implementation. But this team-implementation. But this team-approach can get you where you approach can get you where you want to go faster than going it want to go faster than going it alone!alone!