Keeping Bad Company: An Analysis of Commercial Partnerships by Adam Frampton
Just like any relationship, commercial partnerships can go wrong. However, distinguishing between a temporary setback and a permanent decline can be challenging. Adam Frampton explores this dilemma. The term “partnership” is frequently used, sometimes too liberally. On a regular basis, clients, friends, and family claim to be in strong partnerships, whether personal or business. But […]
Just like any relationship, commercial partnerships can go wrong. However, distinguishing between a temporary setback and a permanent decline can be challenging. Adam Frampton explores this dilemma.
The term “partnership” is frequently used, sometimes too liberally. On a regular basis, clients, friends, and family claim to be in strong partnerships, whether personal or business. But Frampton questions the true nature of these partnerships: Are they one-sided? The recent pandemic has been particularly revealing in this regard.
A genuine partnership should remain stable through both good times and bad. As IATA executive Giovanni Bisignani noted, “If one of the partners in a partnership is losing his shirt while the other is counting his money, it is no longer a partnership.” This insight, while concerning, encourages reflection, which can be beneficial. Periodically evaluating business relationships is essential to ensure they remain healthy, often requiring skillful negotiation to address any imbalances that may arise.
Adam Frampton, a negotiation expert at The Gap Partnership, emphasizes that to assess business relationships and decide whether to continue or exit them, several variables need consideration. Drawing from his extensive experience in negotiating partnerships across various industries, Frampton uses public examples to illustrate the impact of these factors on partnerships.
Time Investment
Most readers of this article likely have Facebook accounts. Even non-users are probably familiar with at least one of its founders, Eduardo Saverin and Mark Zuckerberg—the latter still leading the company. Saverin’s original 34% ownership was significantly reduced later. This reduction was attributed to Saverin’s alleged absence during Facebook’s early development in Silicon Valley. Zuckerberg, in contrast, was heavily involved, working tirelessly while Saverin reaped the benefits. Although this account represents only one side of the story, it underscores the importance of time as a measure of effort in a partnership. Time invested in understanding each other’s needs can clearly indicate the partnership’s health.
Trust Balance
In partnerships, achieving a perfect 50/50 split is rare due to various influencing factors. Both parties must feel a sense of achievement and profit, whether tangible or intangible. Recent examples show that some partnerships become skewed, where one side takes advantage, expecting everything while giving nothing in return. Trust plays a critical role in this dynamic. Like a bank, trust requires continuous deposits. Excessive withdrawals without deposits lead to a breakdown. Thus, it’s crucial to evaluate if a partner is consistently withdrawing more than depositing, indicating a potentially unbalanced partnership.
Shared Values
Long-standing relationships often begin with aligned values, shared visions, and mutual goals. However, values can change over time, creating conflicts. In commercial partnerships, this misalignment can spell the end. A notable example is the 50-year partnership between Shell and LEGO, which ended in 2011 after a Greenpeace video criticized LEGO for associating with Shell’s environmental practices. Public outcry from LEGO customers led to the dissolution of the partnership, highlighting the importance of aligned values. Assessing whether a partnership’s foundational values have changed is crucial in determining its future.
A partnership should be a pact to achieve joint goals, benefiting both parties. Effective partnerships require consideration of major factors: time, values, support, people, and profit.
Evaluating whether both parties have invested sufficient time, maintained aligned values, supported each other, profited from the partnership, and committed to its long-term success is essential. When imbalances arise, powerful negotiation can often help realign interests and preserve the partnership’s value.