By Pamela S. Harper and D. Scott Harper
In Animal Farm, George Orwell wrote, “All animals are equal (but some animals are more equal than others).” We believe this statement can also frequently be applied to all types of strategic partnerships. This includes joint ventures, strategic alliances, outsourcing, and licensing.
Even when partners intend to create an equal relationship, it’s easy for their different values, beliefs, and practices to result in a cultural tug-of-war that leaves one (or surprisingly, all of the partners) feeling that they’re the ones holding the short end of the stick.
It’s especially critical to address this issue sooner rather than later, as the clock for payoff mercilessly ticks away regardless of what is happening.
Consider the case of a tech entrepreneur who entered a joint development agreement with a large company partner with the objective of commercializing the entrepreneur’s unique technology. In spite of assurances by representatives of the large company that the two entities would work as equals on the project, the principal of the small company,who was most familiar with the quirks of the technology, felt a constant pressure to work according to the standards and procedures of the large company partner as the project progressed.
Although the project eventually came to fruition, the series of disagreements and painful conflicts along the way led to delays in the launch that left money on the table for everyone involved. This story could have had a happier and more profitable conclusion if both partners had accepted – and even embraced – their cultural differences.
New realities about culture and partnerships
From our own research study “Building Truly Powerful Strategic Alliances,” we’ve seen that the commonly cited statistic that “40% – 60% of alliances don’t meet senior executive expectations” often arises from cultural differences between partners occur in companies of every size across all industries.
In fact, cultural differences always surface any time that two or more individuals, diverse groups, or separate organizations partner because we all have our own habitual values, beliefs, and practices that are as natural as breathing.
The trick to making cultural differences work in your favor is to accept some new realities about culture and its impact upon partnerships, and for everyone involved to adjust accordingly:
- Cultural labels hinder and don’t help: Labels don’t necessarily hold true and can actually result in assumptions that lead to unnecessary conflict. We’ve seen self-proclaimed “entrepreneurial” cultures in small companies that have been quite hierarchical in their decision-making. We’ve also seen self-proclaimed “process driven” cultures in large companies where the norm in some functions is to largely ignore process. Instead of labeling your or partners’ cultures, focus on the outcome you need and how you can each modify aspects of your respective systems to make it happen most effectively and efficiently.
- No aspect of culture is universally good or universally bad: For example, in the context of innovation, collaboration can be extremely “good” for ideation. However, when it’s time to execute under pressure, too much collaboration can actually take up precious time. At that point it might be more effective as well as efficient to be process driven, which some consider to be a “bad” cultural trait. Focusing on which cultural traits of each partner will best work under particular circumstances will provide a strong advantage in the relationship.
- Occasional clashes between partners can be productive. Rather than avoiding conflict resulting from cultural differences, focus on surfacing and resolving these issues to the satisfaction of both partners (see our Harper Report “How to Take Control of the Elephant in the Room”). This came out in our study, where we found that senior executives who were most satisfied with their partnerships were the ones who reported a high degree of perceived mutuality, flexibility, and transparency in the relationship.
Lean into the differences
Just as in personal relationships, differences between partners can be the greatest source of strength in business relationships – if you accept the differences and take advantage of them.
Using your company’s strategy as an anchor, put aside cultural labels and look objectively at various aspects of your and your partner’s cultures that will be most important for achieving the partnership’s intended outcome.
The more that you and your partner both perceive your relationship’s mutual strategic importance, the more likely it is that you’ll find a way to overcome the challenges of cultural differences and use your complimentary strengths to fuel new – and even unexpected – opportunities for growth and profitability.