Five steps to a good partnership

- Partnerships often promise growth and profits, but at a cost. They can be risky and tough to manage. You can increase your odds of success by following the Three Laws of Business Combination. As a reminder, the three laws state that your partnership must create new value. You must work together well. And you must share the returns fairly. Follow these three laws and you'll be fine. But these laws sound a bit abstract. What practical steps can you take? Luckily, decades of research and experience provide tools and tips that will start you off on the right foot. The evidence says that five steps are critical in the lifecycle of every partnership. These steps will help you implement the three laws successfully. They will help you turn theory into practice. Let me give you an overview of each step. We'll delve deeper later. Step one is to clarify for yourself what you want to achieve through the partnership. Why do you need a partner in the first place? What are your goals and how does the partnership fit in your business strategy? This step helps you see where your partnership can create new value. Step two is to choose your partner wisely. What do they offer? And do you think you can agree on how to work together? This step helps you set up the right conditions for the collaboration. Step three is to set the terms of the deal. This is the nuts and bolts of the deal. This step shapes the way you will work together in the future. Step four is to manage the partnership over its whole life. This is not just a step, but something that you will do for the duration of the partnership. It is the heart of what we call alliance management. Step five is to earn your share. This, too, is more than a step. It means to keep an eye on the benefits that your organization receives from the partnership. None of these five steps is more important than the others. Companies have come to me for help at each stage. You may be well along on some but need to invest in the others. Just don't skip a step. For each step there are practical tools and tips that are easy to learn. I'll provide these tools and tips as we dive deeper.