Four Tips for Picking the Perfect Business Partner

Do your research and avoid buyer’s remorse

Published: Wednesday, August 3, 2016 - 10:13

It’s so important for manufacturers to find and cultivate valuable partnerships. They can help manufacturers expand their service or product offerings, make their processes more efficient, and help specify and procure just the right equipment.

When manufacturers launch a new product or are making major changes to an existing product, they often need to procure valuable partners to make the effort successful. These partners may be familiar to the company, such as previously used vendors, equipment manufacturers, or consultants. Other launch needs might not be able to be met by current suppliers, so companies must then search for new partners.

This necessity often brings up questions such as, “How do we know where to go to find the perfect partner?” “How do we know when we’ve found a good one?” and “How do we know whether they will provide what we need when we need it?”

If you’re getting ready to enter into a new partnership, here are for four tips to help you make the perfect selection. I’ve learned about these by working with multiple Manufacturing Extension Partnership (MEP) centers. Some of these tips are also helpful if you’re engaging current partners for new endeavors.

Tip 1: Do your research

I risk stating the obvious, but I’ve seen far too many manufacturers enter into partnerships not knowing much about the person or group they will be working with. This can lead to disaster.

If you’re going to spend your time and money working with someone, you owe it to yourself and your company to find out a lot about them. Do your homework. It’s a good practice to answer the following questions about any potential partner before signing on the dotted line:
• What experience does the new partner have with similar projects and similar types of partnerships?
• Do they have references for their work?
• How many years have they been doing their work, and what evidence do they have of success—e.g., efficiencies other manufacturers gained by using the partner’s equipment, or the level of increased business that clients have experienced from the partner’s marketing efforts?
• How experienced are the key people who are helping you? Up-to-date resumes are the best evidence of this.

Tip 2: Define your desired outcome

Let’s say a potential partner comes to your door and offers to increase your sales by 50 percent. However, you’re already struggling to get production out the door, and you’re doubtful of your capacity to handle the additional work. Although it’s tempting to engage with a partner that promises such great results, if they’re not going to contribute to your desired outcome, they may end up being a costly distraction. What you might need instead is help using lean manufacturing principles to eliminate waste from your processes.

You must identify the desired outcome for your project before engaging any new partners. To identify your desired outcome, ask yourself and your team, “What do you expect to change after this product or service launches?” For instance, you might want increased sales, new markets, or increased equipment utilization. Whatever your goals, they must align with your partners’ capabilities. If you don’t define your goals, you can fall prey to lofty promises, which can be disastrous down the road. Always keep the end in mind.

Tip 3: Have a detailed scope of work

Once you’ve defined your desired outcome, how do you plan to get to that state? What portions of the scope of work can your team handle, and what roles will you be engaging partners to accomplish? This should be a detailed document, so that no one reading it is unclear about his roles and responsibilities. If you have this document in your hand at the very first meeting, any questions or concerns about the project’s scope can be answered immediately. This also helps avoid “scope creep,” which happens when a partner veers away from the project’s focus. This often leads to additional charges to get the work back on track, or cancellation charges.

Tip 4: Trust your gut

There’s definitely something to be said for intuition. Let’s say you meet with a potential partner, and something just feels off. When the meeting ends, take a few minutes with your team (and, yes, a cross-functional team is necessary for appropriate partner evaluation). Go around the room and solicit the input of all team members. Did anyone feel the same as you? Likely, if you noticed something, someone else did, too, and this is a good way to validate your initial impression.

This happened to me recently. Our company had been working with a partner for a few months to help us with high-level planning. The partnership was costing our company a lot of money, and the results had been OK but not great. I went to an event where this partner spoke and realized that many of the items they were proposing to do for us weren’t really among their competencies. I took my concerns back to the rest of the management team, and after a follow-up conversation with the partner and a review of key staff resumes, it was decided that we would no longer require their services. Although this was uncomfortable, continuing with the partnership while knowing that it really wasn’t a fit was a much less desirable and much more costly alternative.

The next time you need to identify partners to support a launch, keep these tips in mind. In my experience, not paying attention to them will lead to “buyer’s remorse” as well as a waste of time and money, neither of which any company can afford.

First published July 27, 2016, on the Manufacturing Innovation blog.

About The Author

Micki Vandeloo

Micki Vandeloo is the president of Lakeview Consulting Inc. Her focus is profitable growth for the manufacturing community.