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2 out of 3 partnerships delivered 🏆 their expected value. The difference is in execution

2 out of 3 #partnerships delivered 🏆 their expected value in the past 3 yrs. The difference between the winners and losers (unsurprisingly) depended on execution.


This is according to Bain’s research of partnerships and M&A leaders, that also concluded that


"Partnerships are a critical extension of the M&A and #growth"



💵 In fact, in the last 10 yrs shareholder return of frequent acquirers was ~ 2X of that of infrequent acquirers, and a vast majority of frequent acquirers rely on partnerships in addition to M&A.


But “as more companies opt for partnerships … they will discover just how different alternative deals are from typical acquisitions—and how critical it is to approach them with a fresh set of eyes.”


Execution is critical, as it’s often the case.


Top 3 WHY partnerships succeeded:

✔️ Clear value creation

✔️ Clear strategy and objectives

✔️ Senior management commitment


Conversely, top 3 WHY partnerships failed:

❌ Lack of cultural fit and trust

❌ Lack of sr. management commitment

❌ Unclear strategy and objectives



🎯 Cultural fit and trust are elusive concepts, so the helpful questions to ask are:


How similar are your risk appetites?

Are market assessments close enough?

What is the level of oversight and sign-off needed for partnership activities on both sides?



What's also essential:


🗽 Have commitment to lifetime management of partnership.


“It’s important to recognize that the future will usually be different than planned. A partnership is likely to perform well on some dimensions and underperform on others as the market evolves.

To keep the partnership relevant, a periodic strategic refresh can help… This is often most effective when done outside of the quarterly review process.”



🤝 Build internal partnership capabilities and playbooks


Whether in a centralized partnerships team (typical for those with more active partnership portfolio) or creating partnerships skills in business units, it's critical to be thoughtful on:


Creating partnership knowledge management - guidelines, processes, lessons learned, etc.


Managing overlaps and collaboration among the partnership team, management and business unit leadership.



Source: Bain & Company

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