By Miles Nadal, Founder and Executive Chairman, Peerage Capital
When it comes to building a business in volatile times, there is one certainty that can withstand whatever other variables come to bear: No leader can build a business alone. You need strong, engaged, loyal partners to grow your organization, whether organically or through acquisition.
While it may be easier to anticipate what will not work than what will, there are some simple steps that can help you to forecast which partnerships will endure through good and bad times. Circumstances can—and will—shift as economic cycles and other vagaries run their course. But answering some very simple questions at the outset can level set expectations for the future.
1. Pay attention to the small details.
This process starts with self-awareness and an honest assessment of what you, as a leader, and what your organization needs from a partner relationship. In the earliest stages of a business courtship, no detail is too small to weigh. Those seemingly petty issues are often the most corrosive over time.
For example, how quickly does a potential partner respond when you ask them for information or an answer to a question? Highly engaged leaders expect their partners to be every bit as engaged and focused, answering questions or providing information quickly and at all hours. If you are an entrepreneur, chances are that you are a driven, impatient, somewhat iconoclastic individual—which is precisely why you set out to build and grow a business in the first place. A potential partner should match your motivation and dedication.
2. Remember, presentation is key.
It is also important to observe how a partner behaves with staff or with others over whom they exert some control. A consistently rude or demeaning manner is not only an indicator of arrogance, insecurity or both, but it can also be costly in the long run when it comes to recruiting and retaining top talent. It also may be an indicator of weak interpersonal skills that could impede financing, sales, vendor and other essential partnerships over time.
When a potential partner talks about past successes, do they focus primarily on their role, or do they use a team context to talk about wins? This will give you insight into how this person treats their current partners and how they may speak about you and your combined successes during your future partnership.
3. Have lunch and dinner together.
Along the same lines, when considering a new partner, it is often wise to get input from your own team and share observations with those around you, rather than relying solely on your own judgment.
This may sound farfetched, but it can be revelatory to share a few meals with a potential partner and consider how a quasi-social situation with that person leaves you feeling afterward. Better yet, invite trusted friends or spouses to share a meal with your potential partner. Observe how they interact, listening carefully to what your friend or spouse—who knows you well—has to say about both parties after the fact.
After all, I suggest you only partner with people you want to have breakfast, lunch or dinner with a second time.
4. Ask specific questions.
If financial accountability is an important area of expertise for a partner, how well do they know their numbers? When detailed questions arise, do they have to revert to a CFO or another internal expert, or do they have a strong grasp of their own financial data and are they comfortable with it? Similarly, when asked how capital is allocated in their business, are there clear criteria and standards, or do they wing it?
When you ask about the five-year plan of a potential business partner, do they speak in grand but vague sweeps, or is there a detailed plan with specific steps in place? Does their plan align with your own? Do their business values resemble your own?
Finally, exert the self-discipline to really listen to a potential partner rather than reflexively trying to sell them on a deal. Establish and maintain a slow pace, and refuse to move faster than you are comfortable. If you are pressured to do otherwise, that is not a good sign.
In the history of partnerships, I’ve noticed a lack of shared values kills a transaction far more often and far faster than mere financials. If you know yourself as a person and a leader and have a clear idea of the foundational culture you want to underpin your business, the decision will make itself—if you listen.
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