Marriages of convenience

Businesses are too fearful of seeking partners that are different from them, finds Roger Trapp

WHEN the personal organiser maker Psion recently announced that it was planning to share technology with the highly-regarded telecommunications companies Ericsson, Nokia and Motorola, its share price trebled despite a warning on future earnings. Such is the power of partnerships in the modern business environment.

This is partly a matter of perception. Observers feel a partnership like that entered into by Psion is intrinsically "a good thing", even if they do not know the details. But it is also backed up by hard evidence. Research suggests that in certain sectors, at least, organisations deemed to be especially good at forming partnerships create more shareholder value than those that are not thought to excel in this area.

Nevertheless, not all partnerships are equal. According to Anne Deering of the management consultants AT Kearney, whether or not a partnership is successful can have a lot to do with why it was established in the first place and what the parties involved are hoping to get out of it.

Sometimes those involved in a partnership have much the same motivations as those taking part in a consolidatory merger. They want, as she puts it, to "reduce the negative" by forming a bulwark against the competition. As she relates in a new book she has written with colleague Anne Murphy, this is fine ... provided both parties feel the same way. But just as problems are likely to result if one party wants to behave cautiously when the professed aim is to use the partnership as a launching pad into new markets, so the aim of holding still will be undermined if one of those involved actually wants to be creative or bold.

As the title of the book, The Difference Engine, suggests, the authors see great potential for partnerships to become more powerful than traditional mergers and acquisitions if organisations set about linking with those that are different from them. Ms Deering points to her own company's link- up with EDS, the infor-mation technology outsourcing specialist, as evidence of how two very different organisations can come together and grow.

Ms Deering, the vice-president responsible for AT Kearney's "intellectual capital", or know-how, in Europe, acknowledges that companies are frequently held back from such ventures by what might be termed cultural issues. However, she says organisations might not be so fearful if they understood the differences between them better.

To this end, she and Ms Murphy, an associate consultant with the firm, have devised a "partnering grid" that uses the management consultant's favourite tool of the matrix to define and evaluate the different cultures behind partnerships.

Once this has been done, they maintain it is possible not only to identify those cultures that are compatible and incompatible, and the ease of moving from one culture to another, but also to isolate certain behaviours or issues and intervene to change them.

Accordingly, an outsider brought in to shake up a public-sector body might react to setbacks by slipping in to a "command and control" style of behaviour and saying to the civil servant partners that they just have to do something, when in fact the culture would require them to achieve that aim by building a consensus.

The importance of this lies in the finding by Ms Deering and her colleagues that partnerships tend not to break down over transactional and legal matters, but over so-called soft issues, such as trust and differences in ways of working. Moreover, there is, they say, no correlation between the time spent laying the groundwork for a partnership - such as the documentation of procedures and setting out of shared values - and the success of the venture.

In other words, the people involved in such situations should be encouraged to break out of concentrating on each other's characteristics and get on with the job of making the partnership work.

It is just like a marriage where instead of analysing why they are not getting on, a couple should get on with dealing with it, says Ms Deering, who adds that she and Ms Murphy started the project after pondering the rising failure rate among Western marriages.

And although - as with traditional mergers and acquisitions - many partnerships do fail to meet their objectives, there are "enough models out there" to suggest that this is in the right circumstances a workable alternative.

Acknowledging that if the concept is seen by executives as "pink and fluffy" it will not be credible, she argues that certain organisations are creating value in this way.

Not that she expects to make waves immediately. She tends to share a view that executives are, perhaps understandably, less interested in the long haul of changing people's behaviour than in achieving quick fixes through mergers, acquisitions and various types of alliance.

"There's too much machismo in business. They are going to keep on making deals even if they are eroding value," she says.

Start your day with The Independent, sign up for daily news emails
Life and Style
A monstrous idea? Body transplants might no longer be science fiction
Science An Italian neurosurgeon believes so - and it's not quite as implausible as it sounds, says Steve Connor
Demba Ba (right) celebrates after Besiktas win on penalties
footballThere was no happy return to the Ataturk Stadium, where the Reds famously won Champions League
Arts and Entertainment
Natural beauty: Aidan Turner stars in the new series of Poldark
arts + ents
Mia Freedman, editorial director of the Mamamia website, reads out a tweet she was sent.
arts + ents
Arts and Entertainment
The write stuff: masters of story-telling James Joyce, left, and Thomas Hardy
arts + ents...begging to differ, John Walsh can't even begin to number the ways
Jose Mourinho on Sky Sports
footballEXCLUSIVE COLUMN Paul Scholes: It was not a leg-breaking tackle, as the Chelsea manager had claimed
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Telesales / Marketing Executive - B2B - OTE £25,000

£17000 - £25000 per annum: Recruitment Genius: An opportunity to join this new...

SThree: Trainee Recruitment Consultant

£18000 - £21000 per annum + OTE £45,000: SThree: SThree Group have been well e...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Recruitment Genius: Business Control Manager

£36000 - £44000 per annum: Recruitment Genius: Encouraging more businesses to ...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower