New ideas and innovation are the lifeblood of 21st century businesses. They’re also the number-one driver for strategic partnerships worldwide, according to a new study by the CMO Council and the Business Performance Innovation (BPI) Network.
The new study, based on a survey of 330 senior management executives and 20 in-depth qualitative interviews, finds that 42 percent of companies are not satisfied with how well they leverage their partnership and alliance potential.
While 85 percent of companies view partnerships and alliances as essential or important to their businesses, only 33 percent have formal partnering strategies, and almost half report failure rates of 60 percent or higher.
The study, entitled “Grow From the Right Intro,” was sponsored by Powerlinx, the global online partner-matching network. The wide-ranging research initiative was conducted in the second quarter of this year to examine strategies and best practices for business partner opportunity sourcing. The study involved interviews and a global online audit of business decision makers at companies in a cross-section of industries and life stages. The comprehensive 74-page report can be sourced here.
While acquiring customers and increasing revenues are seen as the primary benefits of partnering, the top three drivers underpinning third-party linkages and alignments are:
• Need for new ideas, insights and innovations
• Complexity and pace of business
• Growing an increasingly diversified customer base
Additional research conducted by Powerlinx shows that 40 percent of businesses seek partnerships to reach new geographical markets or expand their online presence rather than focus on customers in their existing markets.
Only 10 percent of management respondents to the survey felt they were extremely good at identifying, qualifying and securing partner introductions. Not surprisingly, some 60 percent are focused on developing a strategy and targeted approach for sourcing alliance opportunities and building out contact networks.
“The marketplace is evolving rapidly, so our practices also need to evolve,” noted Simon Dryer, National Partner Manager of VMware and one of the expert contributors to the study. “Companies need to look closely at their offerings and ask themselves, ‘Are we in the right business? Are we going to market in the right way? Are we doing that as effectively as we need to in order to support and grow our client base?’ Companies are constantly changing in today’s marketplace. To be nimble and able to adapt with the market, you need to have a highly executable vision. And to achieve that vision, you need the right strategic alliances with a framework approach that supports it.”
In a recent executive survey by Frost & Sullivan, CEOs cited strategic partnerships as their number-one growth strategy. Big companies today are making strategic partnerships a centerpiece of corporate strategy, committing more than 20 percent of their assets to developing and managing partnerships.
“However, small to medium-size firms are at a disadvantage,” noted Donovan Neale-May, Executive Director of the CMO Council. “They do not have the domain expertise, business networks or management bandwidth to support the arduous and time-consuming process of identifying, cultivating and making the right partner connections—regardless of whether this is for revenue gain, new market access, product line extension, geographic expansion, customer access, domain knowledge, IP licensing or capital sourcing.”
“Most companies, including the 230 million that make up the global business market, do not have an effective, trusted online platform to automate business partnering, alliance building, and organic and inorganic growth,” noted Doron Cohen, CEO of Powerlinx. “They continue to work within inefficient, tedious and expensive processes for research and outreach, along with hiring outside bankers and brokers to fulfill their expansion goals. Powerlinx’s cutting-edge platform completely transforms that process by enabling business owners and leaders to discover growth opportunities on a global scale.”
Areas of exploration and discovery in the “Grow From the Right Intro” study include:
• Role and value of strategic partnerships and alliances in contributing to corporate growth and development
• Capacity to identify, qualify and secure the right introductions to relevant and valued partners and business opportunities
• Challenges and complexities associated with selecting, closing and nurturing the right partnerships
• Reasons for partnership failure and how to manage and maintain relationships
• Types of strategic partnerships that benefit companies the most, including customer, channel, distribution, technology, strategic, financial, supply chain, outsourced manufacturing, etc.
• Incidence of formal partnership strategies and how these are implemented, staffed and funded
• Intentions and plans to improve networking, partnering and sourcing of growth opportunities worldwide
• Channels, networks or resources that are being evaluated or used to advance business networking and relationship building
• Variations in business partnership capability across industry sectors, cultures and company sizes
• Internal systems or outsourced services that are helping to automate and optimize business partnerships and customer acquisition
To download report CLICK HERE.