2. Often businesses need to share the risks of new growth
product development
Partnering is a force multiplier that can be applied to
many business areas
Leverages strength and competency of diverse
businesses
Increases market intelligence
Spreads risk across multiple businesses
Partnering is part of Product Management discipline
2
3. Develop descriptions of competencies in the value
network that have well defined handoffs or interfaces
Conversion of raw material into basic components
Assembly of subsystems
Integration of subsystems into product or product
components
Integration of hardware and software
Marketing
Sales
Distribution
Installation / Service
Decommissioning or recycling
3
4. Generate a rough estimate for the business volume
associated with each business segment
Generate a rough estimate for the product
development effort associated with each segment
Market assessment
R&D
Manufacturing engineering (product and packaging)
Transition to production
Installation / Fulfillment
Training of service network
4
5. How much of the development can you afford to
undertake?
What are the resources available to you?
Staff
Facilities / Equipment
Enabling technology
Defendable IP
Capital
Market position / knowledge
Time to market
What is the risk/reward of retaining control over each
segment versus partnering?
5
6. Have key product features (enabling technologies)
that will allow them to really boost their part of your
product
Share your ethics and culture
You need to be able to get along with them at the
working level regardless of the size of the organization
Are respected in the marketplace
If they are embroiled in lawsuits with their current
partners, this is not a good harbinger for your
relationship
Typically are not direct competitors
6
7. Approach these prospective partners one at a time
with the non-proprietary, rough business case to gauge
their reaction
Allow time for them to digest and understand the
impact of what you are proposing in terms of the
product and their segment of the value network
If they don’t bite on the opportunity, then part
amicably and move on to another partner
They may come into play at another time or may
reconsider the opportunity later
7
8. As the relationship develops, expose them to more of
the picture so that they understand their part and how
they fit
Start slowly with non-binding agreements and as you
gain trust for one another work towards a contractual
agreement for co-development and production with
the business segments carefully defined
Don’t get your legal department directly involved too
early
Wait until the trust is there and the business principals
are in general agreement
8
9. As the relationship matures:
Update the business plan for the product as new
information becomes available
Be prepared for this because information can flow very
quickly sometimes!
9
10. One unintended consequence of having good partners
is that you, as a team, may decide to abandon the
development
Negative market or technical feasibility information
results from the team analysis
May be a natural consequence of broader perspective
that partners will provide as part of their contribution
10
11. It’s OK to kill a product development if it is does not
meet the expressed market need or is not technically
feasible
It’s better to “fail” when it is small and survivable
Don’t completely disband the team or the interaction
You have identified good companies that you may be
able to partner with on other opportunities
11
12. Greater resources for market assessment and product
development
Better business intelligence and decision making
More market power
Agility
Speed
Impact
Reduced overall risk (everyone invests)
Reward is divided equitably (everyone gains)
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