Why Partnerships Fail
I just got back from a freight-hunting expedition in the United States. The potential customer has large volumes of freight moving across the border and was dissatisfied with the Canadian freight broker it had been using for the past two months. It seems the broker tried to pass himself off as a trucking company with a sizeable fleet and the staff to support it. Well, once the freight got moving, it became painfully obvious that the broker was a one-man band, working out of his house (I’ll assume the basement), owning no equipment but the obligatory phone and a fax machine. Customer service suffered every time the guy had to feed his goldfish.
Strategic partnerships with customers, suppliers, and employees are an essential part of the trucking business. All at once, a good partner will extend your capabilities and let you focus on what you do well. And since the best partnerships are between individuals, not institutions, a good strategic alliance can be personally rewarding.
Why, then, do these deals so often break down?
1. Someone wins. Two parties do business for one reason only: it’s mutually beneficial. A productive partnership is not a game. There is no winner or loser. If you want something valuable from your partner, you have to have something of equal value to give. Say you need a partner that complements you geographically, and you draw up a list of companies that would be ideal. What do you have to offer that could possibly entice one of these companies into doing business with you? Be realistic. You’re asking for trouble if you over-inflate the value of your side of the deal.
2. People problems. Establish relationships with more than one decision maker. If the guy who’s been championing your company suddenly decides to bolt, your partnership may vanish, too.
3. Too close for comfort. Partnership may involve sharing closely guarded information, including customer contacts. Lay down the ground rules: what right does each partner have to proprietary information both inside and outside the scope of the deal?
4. Partnership on the fly. Two CEOs meet on a golf course, get to talking, and shake hands on a deal before the people who have to implement it even know about it.
C’mon. This is a business arrangement. Make it too personal or informal and you risk losing both the deal and the friendship.
5. Broken trust. Most partnerships fail because at some point someone doesn’t tell the truth. They exaggerate their capabilities or flat-out lie to enhance their position, and as a result the partner loses money or a valuable relationship with a customer.
Think of the dispatcher who puts an extra skid of freight on the trailer and tells the customer the vehicle broke down when the shipment is late. Think of the customer who juices up volumes to get better pricing. Think of the new sales rep who’s hired on the promise that hoards of customers will follow him, like he’s the Pied Piper of transportation sales. Think of the broker who tries to pass himself off as a carrier and double-brokers freight he scooped off an online board. Think of the manager whose fleet size expands and contracts depending on who he’s talking to.
It amazes me what people will say and do to get business. They’ll tell the same lie day in and day out until they eventually believe that lie to be fact. The truth comes out, eventually, without exceptions.
To help you weed out the fact from fiction that plagues so many partnerships, do two things.
First, lead by example. People watch and listen carefully to the leaders of their companies. If you stretch the truth, so will your employees. They’ll think lying is an accepted company practice.
Second, trust, but verify. This is a small industry, and everyone seems to know everyone else. The “six degrees of separation” you hear scholars refer to is just one degree of separation in the trucking industry. Pick up the phone and check out your potential partners. Thoroughly. If their story sounds fishy, it probably is.
Speaking of fishy, I’m not a marine biologist, but I think my broker friend I mentioned in the first paragraph might want to switch the fish in his aquarium from goldfish to guppies. You don’t have to feed them as much. It might help improve his customer service.
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