Where do strategic partnerships come into play when working on an innovation? To get some bearings , I’ve worked on a Partnership Design diagram, with the talented Emma Heijerman of JAM Visual Thinking. (see the visual below, and download it from slideshare for free!).
This diagram breaks down the Partnership Design process into 9 different steps. The visual aims to help in positioning your own partnership projects, and getting an overview of what steps come before partnership enters the innovation discussion, and which steps will follow.
In this blog post, we’ll go through each of these steps, and provide some references to support material to help get you underway to design game-changing partnerships!
Step 1. Challenge
It all begins with understanding the current challenge to the business, by examining 3 facets of the innovation. One is the business model at hand. The second facet is the business environment. The third is the vision for the business. By understanding these three facets, you can analyse what the current challenges, and opportunities are for your business model.
You can apply the following tools in this step:
1. Use the Business Model Canvas to map the business model.
2. You can use Strategyzer’s business environment map, to create an overview of the context in which the business model operates.
3. For defining a practical vision you can use the 5 Bold Steps template.
By combining the business environment map , and the vision statement, you can now perform a SWOT (Strength, Weakness, Opportunities, Threats) analysis, linking specific insights from the environment, and the vision, to the business model building blocks. The output is a solid argumentation of why you would need to change your business model in the first place.
Step 2. Ideation
Once you understand why you need to change, the next steps is to figure out how you could set in a course for change. There are many tools available to stimulate creativity in solving business challenges. the ones I frequently use are:
a. Napkin sketching for generating, and explaining ideas
b. The Four Actions Framework for making full use of the innovation spectrum, from eliminating, to reducing, raising, and creating new business model elements.
c. Option cards for getting a sense of the big questions that underly each potential business model direction
Use these exercises to generate ideas, and come to a selection that you would want to pursue.
Step 3. Partnership Intent
After you’ve chosen to run with a particular idea, the next step is to determine whether a partnership could help you in realising it. For this you can use the Partnership Intent Puzzle. This tool scans your own organisation to determine if you are fully equipped to execute on realising the innovation, or whether you’re missing a component, for which you might need a partner. The Partnership Intent Puzzle helps you discover whether partnerships are an optional route to realising your innovation. Alternatively, you could discover here that it wouldn’t make sense to pursue a partnership, because you have everything you need in house.
Step 4. Partnership Canvas
If partnering is an option to pursue, the question is then what the partnership needs to look like. What could be a design of a collaboration that creates the value you need to support the innovation you need for your business model?
The Partnership Canvas provides a framework for designing partnership options, by bringing together the essential partnership building blocks. Use this tool to define how you intend to turn partnerships into a strategic fit for your business model.
Step 5. Shortlisting Partners
Now that you have an idea for the partnership, you need to start looking for potential partners who can fulfil the role. The Desired Value building block turns into a filter for selecting partners to work with. Look for the particular qualities you want to leverage from a partner, and create a list of companies that match those qualities.
Step 6. Engaging with Partners
Once you have the list, you can reach out to partners, and share your journey with them: why you need to change, why partnering is an option for you, and why you think that they area an interesting candidate for you to partner with. Encourage that partner to go through the same process. Guide them if they’re not there yet. Use this dialogue to create mutual understanding of the context for partnering. Once you share this understanding, you are ready for the next step.
Step 7. Partnership Design
The main objective of Partnership Design is to see if you and the partner have a matching perspective on the partnership. Is your partner willing to offer what you would desire to obtain from them, and vice versa? Do you have the same idea on how value will be transferred in your collaboration? And will that create the new asset you need for your business model?
Step 8. Hypotheses
So far you have been able to create a joint narrative for the partnership. This now needs to be put to the test! By creating an overview of the partnership, with the business model, and partnership canvas combined, you can derive the critical assumptions for the collaboration that apply to both partners.
By making clear what needs to be tested for each partner, you both understand what needs to be true before you are able to actually implement the partnership. For example: will joint branding with our partner lead to a larger reach, and will our partner benefit from our contribution to their value proposition? The partnership is now a prototype, and ready to be tested.
Step 9. Experimentation
Having readied the partnership prototype, and hypotheses, you can start experimenting! A great tool for creating experiments is the Strategyzer Test Card. It helps you to structure your experiments, and document your learnings. Doing this together with your partner provides transparency on both ends on what each is doing to demystify the luring potential of the collaboration.
It is important to continue testing your critical hypotheses, until both partners are certain they’ve covered the biggest risks. The Partnership Design process and visual business design tool set is designed to provide guidance to realise this as quickly, and effectively as possible.
Jointly the Business Model, and Partnership canvas support better communication, and getting to concrete execution. As the former head of hardware partnerships at Spotify said to me about his rule of thumb for avoiding over-investment in creating partnerships:
“If we can’t get the partnership working within a month, it’s likely not to work at all“ – Pascal de Mul, Head of Partnerships at Deezer., former head of Hardware Partnerships at Spotify
Interested to learn more about Partnership Design?
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