To manage a joint venture partnerships can soon become difficult if you don’t plan them right. Your business may have strong potential for growth and you may have innovative ideas and products. However, a mismanaged joint venture could give you a run for your money.
So, here are few key tips on how to manage joint venture partnerships to work?
Integration and Cooperation Strategy
Get your partnership off to a good start. For example, you might include a project that you know will be a success so that the team working on the joint venture can start well, even if you could have completed it on your own.
You should take into account your employees’ attitudes and bear in mind that people can feel threatened by a joint venture. It can also be difficult to build effective working relationships if your partner has a different way of doing things. It’s usually a good idea to arrange regular, virtual meetings or face-to-face meetings whenever you can; for all the key people involved in the joint venture.
Communicate and Share Information
Communication is a key part of building any relationship. Sharing information openly, particularly on financial matters, also helps avoid partners becoming suspicious of each other. The more trust there is, the better the chances that your relationship will work. When you decide to create a joint venture, you should set out the terms and conditions in a written agreement. This will help prevent any misunderstandings once the joint venture is up and running.
Establishing Performance Indicators
It’s essential that everyone knows what you are trying to achieve and works towards the same goals. Establishing clear performance indicators lets you measure performance and can give you early warning of potential problems. What gets measured gets done. In the early stages the objectives and performance measures should be relatively few, unambiguous and easily measurable. Progress towards financial break-even with a time target should be a top objective.
Read More : When and Why a Business Can Enter into Joint Ventures?
You can benefit from examining your own business. Be realistic about your strengths and weaknesses – consider performing a SWOT (strengths, weaknesses, opportunities and threats) analysis to discover whether the two businesses are a good fit. You will almost certainly want to Establishing Performance Indicators in joint venture partnerships that complements the businesses strengths and weaknesses.
Assignment of Accountability
Take ownership of who’s responsible for what in a joint venture is vital. If the business or project do not go as planned, the blame game starts soon. This will soon spiral into unwanted rifts and misunderstandings. Assign the roles each partner has to perform and their accountability very clearly. Achieving a balance between the needs of different partners in the joint venture is crucial to the ultimate success of the business.
Be Flexible in Relationship
Partnerships should aim for a flexible relationship. Regularly review how you could improve the way things work and whether you should change your objectives. Even in the best partnership, you’ll almost certainly have problems from time to time.
Learn More : How to Choose the Right Joint Venture Partner?
Approach any disagreement positively, looking for “win-win” solutions rather than trying to score points off each other. Control freaks should not to be involved in supervising a joint venture on behalf of the partner companies. Your original joint venture agreement should set out agreed dispute resolution procedures in case you are unable to resolve your differences yourselves.
Prepare for Ending a Joint Venture
If all Else Fails, ending a joint venture partnership is the best step for the partners involved in the business. In which case, how do we get out with as little loss as possible? Ending a joint venture is always easiest if you have addressed the key issues in advance. Even with a well-planned agreement, there are still likely to be issues to resolve.
Good planning and a positive approach to negotiation will help you arrange a friendly separation. This improves the chances that you can continue to trust each other and work together afterwards. It can also raise your profile in the business community as a reliable and productive partner.
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