Leveraging Partnerships for Better Integration and Product Growth – Interview with Roslyn Lavery
Maciej Nowak [00:00:15]:
Hello everyone, my name is Maciej Nowak and welcome to the Osom to Know podcast where we discuss all things WordPress. My today’s guest is Rosalind Lavery, who is director of partner management at WooCommerce. That’s can you imagine? We are discussing partnerships today and we are looking at different ways companies can cooperate through partnership lenses and what does it mean that cooperation is a partnership instead of different business model? And at the very end of our conversation, Roslyn also shares a framework through which you can look at signing any kind of agreement, not only partnership agreement that helps a lot in opening a lot of doors in your head, let’s say. So this is a very interesting piece at the very end of our conversation and if you want to keep learning more about WordPress, please subscribe to our Osm To Know email@example.com/newsletter. This means a lot to us and without further ado, please enjoy my conversation with Roslyn Lavery. The whole discussion will be centered around partnerships and maybe as a starter for our listeners because partnership is a very popular word. But I would love to know from your perspective, how would you define partnership versus many other forms? But what is partnership for starters?
Roslyn Lavery [00:01:58]:
It’s a great question and I think my start will probably be it depends which is always the best version of an answer. For me, I think it is about finding sort of shared benefit between two or more parties and in a way that together you are creating greater benefit than you could individually, like working individually. So one of the ways that I like to try explain where I see some of the differences is for instance if you consider a sales or affiliate kind of structures where there’s still exchange of value between two parties so that it can sort of show up as being potentially like a partnership. But I see those in a very different context because I see those things as happening. There’s an exchange that goes in one direction and comes back. So you provide leads or you are selling something and then somebody gets the product that they purchase but it’s a bit more of a one way direction in the way that I see that. Whereas partnership I see as much more being something where there needs to be mutual value and there needs to be almost like an affiliate agreement in both directions. If you wanted to see it like that, you would need both directions to happen. But you can’t just have one thing going the one way and the other thing coming back the other way because it would create the same scenario as if you had an individual affiliate agreement with one company and then a different one with another company. There needs to be something that’s an added benefit of these two companies working together in a way that you generate more or you create additional value. In a lot of cases, I think I see that additional value as being something that is both beneficial to the parties that are part of the partnership as well as the audience that partnership is targeting. So very often a partnership in my context, in the way that I’ve seen it, is where you’ve got two companies that are both working together to build products. So I work mostly in product integration partnerships. So think it’s different in different industries and it’s why I’m sure this is why the answer is a little bit of it, it depends because I think it is different in different industries. But within the tech industry, when you’re talking about product integration, where there are two companies that have products that work together and you’re trying to build a partnership across that product integration, there is normally a mutual customer that you’re both building your products for. So there’s a mutual customer which forms the basis of the partnership. And if you are talking about a partnership from a revenue perspective, potentially, you’re thinking about the context of can you, as these two partners acquire more customers, grow greater revenue through the products that you are building by joining forces? In a way. But I think the key lens there as well is that you also need to be considering the customer at the end of the day that is using those products and what do they get that is better by you working together that they wouldn’t if you had individual products. So what about that integration? Is there deeper product functionality that comes about because of now the deeper relationship that you have formed between the two companies? Long answer, but I’ll stop there.
Maciej Nowak [00:05:53]:
Yeah, good answer. Yeah, very good answer. Because my assumption, or maybe my first thought on this topic, is that partnership is a very popular concept and everything is a partnership, like to some extent. And there are partnership programs in every major technology provider and not all are created equal. And also I have a feeling that those partnership programs are a little bit, I don’t know, maybe inflated because if you are, for example, a vendor of a given technology, someone has to integrate that technology to the customer and then this is already a partnership. So that’s why I’d love to know more about how to structure the partnership because otherwise I’m selling, I don’t know, bricks and a partner is implementing those bricks in a building and this is taking this to a construction industry, let’s say stuff to them.
Roslyn Lavery [00:07:01]:
Yeah, I think that’s maybe where I see that being a bit different, like I do see a fundamental difference between a client relationship versus a partner relationship and to me those two things are quite different. So in an environment so if I’m thinking about an agency that builds solutions for a client like sure there’s a lot that is similar in terms of how you want to try build. You can see that as a partnership because you together are working closely to understand how you can provide the best website for the customer at the end of the day or that kind of thing. But I think the foundation of that relationship in my mind still sits at an account management, and it’s more of a supply of a product and it more sits into this kind of sales environment and not as much into a partnership environment because there’s an element of one wayness happening there where there is a service being rendered and value being paid or you’re going to have some kind of service charge for that. So there’s a two way street obviously, but it’s very much one thing is handed and the value of that comes back. In a construction industry I would see that as being a little bit more of that kind of like one way direction and less of a partnership. In a partnership context it might be more a case of you’ve got a construction company and a building materials company that want to try do something together that individually they don’t want to just sell products to each other. They want to actually manufacture and research a new product that hasn’t been built before and they need the expertise from both teams with different perspectives to be able to create something that individually their companies couldn’t do. And you need aligned incentives, you need kind of shared knowledge in a way that is a little bit beyond just I’m going to sell you a product that you can pay me for.
Maciej Nowak [00:09:27]:
This is very interesting example because when I was thinking about construction industry which most of people have some kind of contact with, right, everyone needed to do something in other apartment. I was trying to figure out what would be a partnership within that industry. And your example is one I have never thought of like a company manufacturing materials and a construction company working as a partner that would for example test those in on new constructions for example, or new ways of constructing. And this way the material company doesn’t have those opportunities to test in real life those products on a commercial construction site. So this is very interesting example.
Roslyn Lavery [00:10:21]:
I can maybe offer another one that I’ve actually seen in the construction industry as well. Just a bit of a new thing but particularly maybe not construction companies, but often if you get like investment companies that are property investors and I’ve seen one or two scenarios of partnership with a company that is running like a co living or a co working space where they invest into the property. But then it comes with a business model of how to use that property. So rather than just selling the space to rental for having shops or whatever like shop rentals or normal kind of usage rentals, there’s a collaboration with how do we work with a company where they need the property and they need the space. And there’s a longer term kind of relationship there that needs to be formed where it’s not just a standard lease like there’s a little bit more that comes in with that.
Maciej Nowak [00:11:30]:
Now, I thought maybe also about franchise model which is very not present in let’s say agency space and software space more on physical locations. But franchise is always marketed as you are our partners there’s franchise giver and all of those franchisees. So the small businesses taking the franchise are your partners. But this is a case where I don’t see this as a partnership because okay, maybe I am taking a business model and the whole operation model how to set this up, but I don’t see a partnership there. This is most of the time very strict agreement penalties for not applying to those rules. This is very penalized model and I don’t have a feeling this is about partners rather than executors of a plan, something like this.
Roslyn Lavery [00:12:38]:
Yes, and I’d agree with that. I think that’s where I definitely have a slightly narrower definition of partnership because it is very easy to go down a rabbit hole where almost everything and everyone is included into partnership. And I think what has happened and I mean, this is very much my perception, but it feels a little bit like the word partnership has been expanded because it is a slightly I think it’s considered as a more it’s seen as a stronger word and it’s seasoned as a more collaborative word. So the word is used in situations.
Maciej Nowak [00:13:17]:
Less transactional, if I may.
Roslyn Lavery [00:13:19]:
Yes, but it’s used in situations where actually what they’re trying to do is trying to make a sale sound more attractive in a way. Exactly. A franchise model is something along those lines. And the thing for me that would disks that would remove the franchise model from a concept of partnership for me is that the franchisee is not adding anything back into the franchise model. It is much more of a one way street. And sure, the franchisee gets value from being able to have the centralized services offered by the group structure of that franchise. So there’s not that there’s not value in it. I just don’t see it as a partnership because there isn’t the same incentives. There isn’t a model that is structured to be a collaborative like we’re growing this together. Like you say, there’s a bunch of rules that the franchisee owner has to maintain and contribute revenue back into the central source to get benefit for that. But it’s a one for one transfer, you know what I mean? Those things are not because of that transfer increasing the value to the customer or the value to each other.
Maciej Nowak [00:14:46]:
In that scenario there is nothing else flowing back other than revenues to the franchise owner, right?
Roslyn Lavery [00:14:56]:
Yes. And I guess it’s the calculation, right. What is flowing back and forth is the same value and there’s a network effect to being part of. So if you had to start a store on your own versus starting it with a franchise, there’s a network effect, there’s a kickstart effect. So you can be a little faster at your initial. You can get customers because of the brand that comes with that. So there is benefit to it. But that benefit sort of sits in individual cases. It’s the same benefit for anyone that chooses to be that franchisee owner. It’s a little bit nuanced and I think it’s hard to explain, but I can’t think of how you would make that into something that would be more of a partnership.
Maciej Nowak [00:15:44]:
But I guess maybe the business model prevents going to anything more than that because business model also dictates what can be and cannot be done. So I’m also wondering what are other models where there are companies cooperating more than collaborating but rather cooperating like affiliate model for example, or referral model. Is there any place for partnership there?
Roslyn Lavery [00:16:17]:
I think there can be, but then I don’t see it as being an affiliate model anymore. I think that would for me be again it becomes a question of is there additional benefits? So when you are in a standard affiliate model, you are working with a company that you say we have a product we want to offer, we want to access your customer base as an acquisition channel and we can offer you a kickback in revenue for that. But I would say I guess the scales are even. The calculation like you’ve got to figure out what value you return for the value of that customer, for that customer acquisition. But it’s a calculation of still a balanced scale and at the end of the day, the customer that buys that product gets the same product that they would get irrespective of where the customer comes in through different channels. But the product that they get at the end of the day is the same. And in a partnership environment, I would expect that the product that the customer gets at the end of the day is in some way elevated or more integrated. So if you have a stronger relationship with that other partner that is bringing you the customers, is there something about that customer coming through that channel that is fundamentally better or improved because of the relationship that you’ve created with that partner? So is the onboarding process more streamlined? Is there a way that the customer now can not have to enter their data multiple times? Like can you integrate at a product level to make the onboarding experience better? Does that partnership allow for greater investment? Does it allow you to invest more back into the product growth so that the feature set available for that product is more advanced than it would be with that product being built in isolation? Those are the kinds of things where it then moves beyond just an affiliate program. Because now you’re thinking together how do our products work together? But I don’t know if I can think of an example where that would be the case where there isn’t some layer of product integration because otherwise how are you benefiting the customer in any particular way? Sometimes there will be an offer of discounts, that kind of thing. But in general and I think a lot of this comes down to kind of the motivating business model. Behind a lot of those decisions is often still acquisition. And as soon as the motivation in my mind is primarily focused on acquisition only, it falls outside of a partnership. It’s much more in a sales relationship and still has value and an acquisition strategy is needed. But then I wouldn’t call that a partnership.
Maciej Nowak [00:19:34]:
But do you refer to acquisition of the whole business or other customer acquisition?
Roslyn Lavery [00:19:42]:
Customer acquisition, yes, in that context.
Maciej Nowak [00:19:45]:
Because I thought maybe where there is a partnership opportunity, there might be a tendency to, for example, for the bigger partner to think of the small partner as acquisition, not target, but a potential for acquisition and creating a bigger group, for example.
Roslyn Lavery [00:20:06]:
I guess even if there isn’t a partnership agreement and these terms all are quite flexible in a way. So whether an affiliate is not a partner or is a partner, I think is a bit debatable. It depends on your company and how you use that term. But I wouldn’t necessarily call the legal agreement between those two parties as a partnership agreement, for instance. But could an acquisition agreement or an affiliate style agreement still be the best version or way for you to work together as two companies? Very possibly. Might that still be a way to test and prove whether a company is a potential target? Very possibly. I wouldn’t necessarily think that a partnership is what I’m terming as a partnership is necessary as a way to judge whether a company is like a good target from an acquisition perspective.
Maciej Nowak [00:21:15]:
Yeah, I was just thinking that there is that tendency where businesses are looking for synergies and those synergies are also exploited, maybe not a perfect word to describe it, but take advantage of like there are partnership opportunities, let’s grow them and maybe acquire a business to benefit in full from those synergies. But this is obviously risk of orders of a magnitude bigger right?
Roslyn Lavery [00:21:55]:
Yes, and I do think that that is the foundation of any sales partnership, if you want to call it that, or like a more integrated product partnership. I think the foundation is very often a shared customer base. Where are the synergies between how you are working for your customers, what you’re building for your customers, and something like an affiliate agreement or something that is a little bit more of just an acquisition channel might be the most simple way to start to figure out where those synergies are and you start to learn from customer feedback through those agreements. Is there more that we could be doing together? Are there things that customers are requesting? And could we expand this partnership or could we go from an affiliate agreement into more of a partnership structure by solving some of these problems that are coming through or some of these challenges that customers are asking for? I don’t think there’s necessarily a single path to figuring out what that is. And very often understanding how a partnership might be structured requires a little bit of learning to, like you say, explore where are those synergies, what would be benefit to our customers?
Maciej Nowak [00:23:26]:
So you have touched upon a couple of interesting topics. So maybe then since we have discussed what are different cooperation models, where are those partnership opportunities? How in your opinion opinion it usually starts. So what is the moment or event that triggers those thoughts about partnering with another company?
Roslyn Lavery [00:23:55]:
Certainly in my experience, a lot of what I see is an identification of shared customers or a shared target audience very often. And that often is the starting point for a conversation or the reason to reach out to a particular company is to say we’re using your product or our customers are using both of our products at the same time. How might we work together to support those customers better? How might we work together to grow our individual businesses faster? I think that’s often the start of the conversation. What’s been interesting for me, I think in my years of working in this so far has been that that is not enough. And I would say sort of in some ways it is where the idea starts. But it is not enough as a foundation for a partnership to just have shared customers. And this is why I speak a lot about where’s that extra value that you’re generating. Because very often actually when you’re talking about shared customers, you also are likely talking to a possible competitor, not necessarily an entire competitor. The whole business may not compete with you directly on all aspects, but there may well be some aspects of your business that do compete. And understanding how you can draw those lines between where are you competing and where are you partnering is a lot of where that nuance of the conversation comes in to ensure that your partnership incentives are actually aligned to the same goals and the same incentives. Because it can be quite easy to just go, well, if we have shared customers, we should work together. But often that then means either you’re almost creating less rather than more because now you’re trying to offer the same product to the same customer. So you’re not benefiting the customer and in some ways you’re counterproductive to your own growth. And the other problem is that sometimes what can happen is that just because you have shared customers doesn’t necessarily mean that there’s a business model that supports working together and committing resources to a partner in a way that is going to actually grow those customers more. I think finding a business model that works can sometimes be the sticky point that is hard to get over because the acquisition strategy may make sense, it might be the right audience, it might have technical ability to be able to work with the systems together. There might be benefit that you could offer customers. But at the end of the day the one product is where you’ve got most shared customers. The product on the one side is actually free at that point and there isn’t a business model that supports that partnership. So it does get a bit tricky at that point. So I guess it’s still the right starting point. But it’s not necessarily enough to define that there is a good partnership structure.
Maciej Nowak [00:27:24]:
I’m thinking what might be that common platform for looking for value in partnership, for example, in agency space, because this can be implementing suitable tool, but also a way of two agencies working together with mutually complementing technologies, for example, or services. And one agency with a very narrow focus, with a client with a little bit broader expectations can partner up with another agency with the missing services. This I see as a partnership in an agency space where two agencies can work with one client to the benefit of the client and working together, having worked together for a long time, it’s different than if those two agencies would be managed by the client and they didn’t work together previously. This is my take. I’m wondering what’s your opinion on this?
Roslyn Lavery [00:28:38]:
Yeah, I definitely think that there would be examples. I don’t know of any specifically, but I would imagine that that would be possible. I think to determine whether or to try sort of initiate those conversations or understand how to explore those conversations. A big part of it for me is understanding what your niche is. So being able to identify what your differentiating factors are, what is your core skill as a company is, particularly if you are talking about a partnership between, say in this example, two agencies where you are in a lot of ways at a foundational level, competitors and not partners. So it’s in what instances can you actually be partners and not competitors? And that comes down to a lot of the time in understanding what your niche is and what your particular strengths are allows you to then be able to explore. Okay, but if these are our strengths and if this is where we’re focusing and this is where we want to hone in our skills, we can offer a better, more rounded service to our customers. If we hone in on those things and partner with another agency that’s honing in on another area that supports what we’re doing. But understanding your core skills and knowing how to speak to those and knowing how to articulate those and keep them into kind of like a bucket of these are our core skills, is a key part of being able to have those conversations in a way that they don’t derail into competitive spaces. Because that will obviously come up, because foundationally, you are often going to be competitors, potentially. And I can definitely see how that would work, particularly like in an enterprise space, for instance, where there are quite a lot of quite bespoke, very time consuming needs of those customers. The sales cycle can be really long. So being able to work together and honing in on where your core skills are I would imagine works really well in that environment. I think it might depend on the industry and the size of the client to figure out how you would make that work. And then the other way to do it could be potentially, like you say, there might actually, at an agency level, even be if the agency focuses more on building solutions that extend services and is there collaboration that could happen between different products, then it starts to become more of a product partnership discussion rather than an agency partnership discussion potentially.
Maciej Nowak [00:31:33]:
This made me think again about construction business. I don’t know why I’m going back.
Roslyn Lavery [00:31:37]:
To that building houses, not web bats in your head, oh yeah, I might.
Maciej Nowak [00:31:42]:
Be, but no, not yet. But a couple of friends are building. That’s why I’m very immersed in their problems and multiple subcontractors and they are de facto project managers on construction sites. You are, let’s say, I don’t know, a painter. Now you have to be a construction site manager, otherwise you won’t end up with what you wanted. But this made me think about big enterprise construction projects where there are two companies going together to win the project and they are creating a consortium and doing this together. And I might think that this is like the I wanted to say this is the ultimate level of partnership, but this is one off only. So it’s not like this will be happening for many, many more customers. It’s a project related consortium. It will get dissolved after the project is completed. So you cannot do this without a partner. But at the same time, this doesn’t fulfill the definition of partnership. Or maybe it is. Maybe this is one off partnership with all of the perks of having a partner.
Roslyn Lavery [00:33:14]:
Yeah, and it does. I mean, this is why the definition and why it’s such a big question to start with as well, because it’s a tricky thing and it does become quite nuanced when you get to the examples. It gets very nuanced and it’s why it’s actually, I think very useful to have example cases to think about and talk through because I don’t think there’s a clear right or wrong answer to this. Right? It’s more just about sort of like what’s your framing and how are you using that framing to improve how you do your business? How are you using that framing to consider what growth might look like? So in this context, for instance, what comes to mind for me is what I would question, I guess, to evaluate am I approaching this from a partnership mindset or am I approaching this from just or am I approaching this just from a perspective of what will win me this contract? And if it’s just a case of I need to have another company because I can’t offer the whole project and in order for me to win my piece of the project, I need someone else involved, to me, that’s not really a partnership. I need to fill all the holes to be able to get the piece that I want. But I’m not getting more by having those other people involved. I just am able to get the piece that I want. Which is the slight distinction in the way that I see it is that am I just finding a way to get what I want in the same quantity as I would otherwise? And that’s a little bit similar to affiliate agreement, right? Like, if someone is bringing me a customer but I still have the same customer, that customer is still the same amount of value to me irrespective of whether I got it through an affiliate or I went and found that customer directly. I get access to more customers, but I’ve got the same customer at the end of the day. And in this environment or in this context, as a kind of example case, some of the questions that I would sort of ask myself is as the contractor who’s looking for this work to be done, do they get more by having multiple companies work together or would they get the same service if they just went to four different people? So the only extra value that they’re potentially getting is they get to sign one deal with this consortium rather than signing four deals. But at the end of the day, that value difference is pretty negligible. There’s a bit of admin difference, but there’s no fundamental value difference between those two things. Similarly, those are the two examples of questions like me as an individual, do I get more for my bucket or do I just get access to that bucket as the customer? Do I get more by going through all of these four companies or do I just get the four pieces put together? So it’s one plus one plus one plus one equals four, but one plus one in that environment doesn’t equal three. And that’s kind of where I would want to see a partnership. So one of the things. That I think could come up in that example would be if those two companies that have formed this consortium do it in a way that they look at how they could offer more than if they were two separate pieces that were being just attached to each other to be offered for this project. And some of those things might come in understanding ways of working. So a lot of the time partnership in the way that I see it is about communication and about interpretation. How do you work more effectively together and how do you start to blend ways of working between two companies that have very different cultures, that have very different norms and understandings about how work gets done. So is there something about that consortium that has been formed that allows the employees between those companies through that project to work more efficiently and effectively together? So rather than the work happening individually on two sides have we created through this partnership structures and ways of working that translate between those companies better so that those people work better together. So now we’re starting to get to the point where now we’re not just one plus one equals two, we’re now one plus one equals three because now we’ve added an extra layer that this customer now actually gets a better joint service out of that consortium than they would by going to the two individual companies directly.
Maciej Nowak [00:38:10]:
I really like that during our conversation we are like debunking some partnership myths around all of those names for cooperation between businesses. I really like this because those are not bad concepts or bad business models. But as you mentioned, the inflation and inflation of the word partnership to cover the regular client customer transaction is really interesting because I think partnership is very difficult. Because, for example, in retail or in manufacturing, you are manufacturer. Of hardware, let’s say, and you are the manufacturer. But someone has to sell it. And you have network of partners. And those are resellers. So there is also a reseller partner, distributor, manufacturer, bundle depending on the sector, what’s the naming. But this is like a chain from one and only manufacturer down the ladder of layers of the onion, let’s say, to the outer space, to the customer. So this is also, I guess, a regular reseller model but the expectation as well is for the manufacturer, for those partners and resellers to also make moves and also make efforts to sell those products. Not only rely on what the manufacturer provides in the starter pack, let’s say, for those networks to start. So even though this is very old model because this is old, the hardware goods are very old as a business concept and products to distribute but there is, I think, a little bit of a partnership. In a sense this should work together. There are different partners with different customer base and this should work as a cooperation rather than transaction. But if we look at this from the perspective you explained, if the end customer has a better product with this partnership being in place versus ordering from whatever the online shop they will find to the cheapest price, is it any different for the end customer? And I always ask very long questions. So I beg your pardon, but there is a huge direct to consumer trend right now where the manufacturers are selling directly to consumers and only high end maybe products are sold through channels because there is a lot of knowledge that has to be put into the sales process for the customer to be happy because maybe the product is the same, but the identification of the product across range of products is what the partnership. So the benefit of the customer, the bigger benefit, more value because the product will be more suitable for their needs. So, very long question, my thoughts, what would you say to this?
Roslyn Lavery [00:41:45]:
I’m not sure I know exactly what the question is, but I have some thoughts.
Maciej Nowak [00:41:49]:
Yeah, no question, I guess. Again, I get this feedback that there.
Roslyn Lavery [00:41:53]:
Is no question but it’s part thinking. So that’s great. What comes to mind and I think I still sort of guess I’m always questioning for myself at what point do I consider something moving from a sales relationship into a partnership relationship? And that line is a bit blurry, it’s a little bit shifts around depending on the angle that you choose to look at it from. But I guess a lot of those models I would see as being quite traditional like sales distribution models. And it’s true, I think a lot of those environments are changing because the value of accessing, of being able to access customers is changing because of having the internet and being able to sell through direct channels more easily. And being a lot of these channels have become easier for the direct customer or the direct company, the manufacturing company for instance, to access. In some cases that is true, in some cases it’s not, in some cases it’s not the core skill of the manufacturer. So they’re better off working with a sales agency because their core skill is not branding, is not customer support, is not all of those things. And I can see even how that might relate to an agency universe, where one agency might have a lot stronger core skills within the technical environment but is better off working with another company that has stronger relationship skills. In terms of the account management of the actual customer or whether it be the branding side or the distribution across sort of just awareness within certain regions or I think there’s a lot of those kinds of things where acquisition ultimately is the goal of that partnership, but where you’re bringing different strengths to that agreement. I think in relation to the sales environment. The other thing that I thought of, which is a slightly different topic, but is the thing with partnership, I think, is that the deeper you want to go down that sales channel like a straight affiliate or straight sort of like partnership acquisition strategy or a sales acquisition strategy is often something that you can set up once off and scale quite a lot. Deep partnerships and finding structures that can really support much broader growth, extra product growth, greater value to the customer often also comes with quite a lot of resource requirements from both companies. So you’re having to commit quite a lot into that partnership. And this is where sometimes like the business model side of it breaks because they often come with a lot of effort to be able to get that sort of level of a deep partnership where now you’re improving, you’re creating additional product features or you are changing the nature in which so that you can offer more. Offering more often comes with investment. And this is why there needs to be quite a strong basis of a business model that sits behind that and ideally something that grows over time like these are long term at least the style of partnerships that I work mostly with. They’re much longer term and they’re designed to kind of as you grow you invest more but they require investment and that often is resources. It’s aligning goals. If you’re putting investment into something as a company you can’t be investing into goals of the other company. So you got to find a way to that only works when the individual goals between the companies are somewhat aligned and the partnership can then kind of tie into those shared goals. So a lot of what I end up doing in a partnership role is understanding what those goals are, where are their synergies between our various goals. So it’s understanding customer synergies, it’s understanding company level goal synergies and targets or focus areas. You might have times where you need to back away from the partnership slightly because actually your shared goals are not as aligned as they used to be and there’s still a basis that’s worth keeping it there. But if you no longer have the level of resources available to invest as much into that partnership anymore if I go back to the original discussion of the kind of like the sales network, for instance, it would be a case of saying it might sound because it sounds like such a great value to have these partnerships. It might sort of seem like, well, I, as a company that has the sales network should try figure out how to partner with everyone in that network because the more people I can partner with, the better. But that comes with a lot of investment and often that’s too like it’s too much. So what you’re doing is probably saying how do I set up the sales network to get the distribution that I need and then how do I start to find identify who are the one or two sales suppliers in this chain that are showing greater growth, that are showing better alignment in our ways of working. Is there a synergy between how our companies work and our employee culture? That potentially if there are synergies in that employee culture, does that help us work more closely together and be able to be a bit faster than some of the other agencies or the other sales networks or whatever that we work with? Are there things that we can tap into in a way that could motivate for additional investment into those one or two but you can’t just expand that because you don’t have endless resources internally to be able to do that?
Maciej Nowak [00:48:21]:
Yeah, obviously. Ask me for everything, right?
Roslyn Lavery [00:48:25]:
Yes, exactly. And very often what I see as well sorry, I’m going off on a tangent again, but often what I also see is an identification of the opportunity and value and not enough of an awareness of the investment that it requires in order to access that opportunity and whether that investment is worth it in comparison to the level of opportunity that’s available.
Maciej Nowak [00:48:50]:
That’s very interesting. So I like this tangent a lot because after at the end of the day, the whole effort put into the partnership has to pay off. Otherwise doesn’t have to, but it’s better if it does. So I have two questions and those will be proper questions this time. So question number one let’s imagine we started the partnership and what are the indicators that okay, we are done, this doesn’t work anymore or never worked? How to assess if the partnership is working out, working later? I will ask the second question because otherwise it will get messy.
Roslyn Lavery [00:49:39]:
No worries. It’s a good question and I think this is a bit of a moving target and I think it is something that you as a team need to constantly be aware of and constantly talking about to judge kind of where that line is because it can be. I think one of the things that shows up often is actually not a commercial indicator and it is more of a relationship indicator and more around kind of a lot of partnership requires this extra investment and it means that you need to work with people that are nice to work with. If I want to put it that way. If you are struggling to kind of find alignment between how you work together, if it feels very combative, then I would say that’s often an indicator, that something’s misaligned and sometimes that can just be a case of misaligned expectations and that can be resolved through different ways of communication. It might actually indicate a more fundamental difference of opinion of what the shared value actually is. So I’d say most of the time these are things that are hard to evaluate at an objective level. But very often the indicators are the conversations are more combative. There’s a difficulty in sort of getting to the point of agreement on things and often that’ll come in there’s a misalignment in terms of expectation for commitment and investment into that partnership. Does one party feel like they’re getting a lot more? Does it feel even is it balanced or not? A lot of the time that comes down to misaligned expectations. I think getting to specifics often is the way to understand is this just something that we’re misaligned on or is it that we have not clearly defined what our success metrics are and how far apart are those things? Like have we spoken actual numbers? Does one company expect that what good looks like is ten new customers and the other company thinks that what good looks like is 100 new customers? You’re likely going to find that down the line if that was the case, and it wasn’t defined, which it sounds easy to say that, but at the end of the day, it’s actually quite hard sometimes to identify what success looks like for you. And sometimes success can be things that are not measurable very easily, which makes it even harder. Then you’ve got to really be like playing open communication to try and understand what those things are. Understanding kind of like what your goals are together I think often is the indicator of things are not working if you’ve got very different expectations as to.
Maciej Nowak [00:52:55]:
What good looks like and to complicate the image. Partnerships tend to be a long investment, long process. The results aren’t instantaneous, let’s say. So as with everything sales related but partnerships I think are most it’s either very early results like the initial batch of waiting customers because those were the triggers that made those two partners work with because those were the customers we can do this for and then later on nothing. Because there is a plateau of silence, let’s say nothing going on and that’s why I was asking how to evaluate if these partnerships make sense for a longer run.
Roslyn Lavery [00:53:50]:
Yeah, exactly. And time is another factor as well, right? Like the success metrics that I was speaking about before, sometimes the number is the same but the time frame in which people are expecting that to happen is different.
Maciej Nowak [00:54:02]:
All right, and where should the partnership sit in the chart? Let’s say if we are thinking about partnership being important element of the business model, let’s say.
Roslyn Lavery [00:54:18]:
Yeah, and I think it depends a lot on the extent to which partnership drives your company growth and also team size. Right, like structure is a hard thing to identify because if what makes most sense for the company size is to have one partnership person that’s going to put firstname.lastname@example.org level like in a very different place if you’ve got a team of people or multiple teams of people. So I’ll try answer as generically as possible some of the things that I’ve seen a little bit when it comes to structures and this is where it depends on how you define what partnership means. But you can have situations where partnership sits within the general sales structure of the organization so whether that be under a CRO or a sales team or something like that but within the sales environment. And to me often that means that as a company you are valuing more acquisition and sales channels as your mechanism for partnership which in my mind is quite on the scale of where sales versus partnership lives. It’s sort of much closer to the sales side, right? Like you’re much more in an acquisition target and you might have large scale deals so like bulk deals or whatever. But to me that still sits on the sales side of the scale for the definition of partnerships. Where it sits outside of that I think then becomes a little bit tricky to understand kind of beyond that it depends on how your company is structured. There’s definitely partnerships is at the end of the day mostly focused. There is still an element of acquisition involved, of customer acquisition, there’s still an element of revenue growth involved so it’s still going to be somewhere in the kind of growth environment. I would say it needs to sit within a team or chart structure that focuses on longer term value growth rather than short term wins. So I’d expect sit somewhere that is a growth hacking team for instance, or a part of the company that is looking at quick wins or at optimizing short term elements of the business. So I’d expect to see it in areas of the business that are a little bit more longer term focused, that are a little bit more, I guess structured in a way that it is not necessarily just sales focused and I think sitting under a sales team would swing the focus a little bit too much. But outside of a sales team it’s kind of hard to say. It sort of depends on the rest of marketing maybe. I think marketing is tricky because marketing’s focus is still primarily around marketing focus normally is around brand and acquisition. And this is why I say I think some organizations are creating an entire kind of channel that sits on the same level as sales, marketing and then partnerships. It’s its own thing. So it’s not under another structure, it is its own structure. And I think in businesses where partnership is a core piece of how you do your work and your business model then it probably makes most sense for it to live as its own entity. But yeah, that depends a lot on how the rest of your business is structured. I have seen instances as well where the partnerships are more product focused and it actually sits under a product team for instance.
Maciej Nowak [00:58:18]:
Roslyn Lavery [00:58:19]:
Yeah, I really think it’s a tricky one and I think understanding how you want partnerships to the kind of focus you want on your partnerships within your business and what the structure and nature of your type of partnership is in your business helps to kind of identify where it should live. Like if it’s more about acquisition, marketing or sales might make sense. If it’s a big part of your business, its own entity might make sense. If it’s very heavily weighted towards product development, then somewhere in the engineering and product team actually might make a lot of sense.
Maciej Nowak [00:58:56]:
All right, so I have, I think, last question for you. It’s about trust and is trust playing any special role or is it same role as with every other business interaction between companies?
Roslyn Lavery [00:59:14]:
I mean, I think it’s a core part of a lot of business so whether it’s more or less than others is hard to say. But I do think it is a core element of the more you plan to invest into a partnership or into another company, the more you need to know and build that relationship and trust with that company to make. Sure that you have articulated what your shared incentives are and discussed what those expectations are in my mind a lot of the time, actually. The contracting phase and going through actually defining your partnership in a legal format is often a good way to get to the details of exact wording and exact expectations, because that’s where legal wording is quite a useful mechanism for that, I find. Where it forces you to think about things in a much more detailed way and also often with a mindset. I think when you start talking about a partnership you often are thinking about the best case scenario and it’s easy to develop trust in the best case scenario when you’re thinking about growth and all these wonderful things. Where trust falls down is in situations where things don’t go as you expected. And often when you’re forming a partnership, you don’t know how it’s going to go, you don’t know how customers are going to respond, you don’t really know if this is going to be a success. So understanding how you work together and building that trust with the other company to be able to walk away if it doesn’t make sense anymore, or to be able to dig into some of the things that are not working to understand where you might be able to improve or to change the structures to make that work. I think it’s a core element of making sure that you can keep that relationship going and kind of dig into it enough to know I find the legal contracts as a good way to kind of judge that or to figure out how close you are, actually. And partly because of that. Because sort of, at least my impression of legal things is often kind of taking the lens of what happens in the worst case scenario and trying to build in mechanisms that mean that things don’t fall apart in the worst case scenario, which makes it an interesting perspective. But I think it can be a helpful mechanism for partnerships.
Maciej Nowak [01:02:06]:
This is interesting because this makes you think about the downside of the cooperation and how to end it if the things are not going as planned. And this is I think most unpleasant part of every deal that though there are downsides to consider because partnerships in my opinion at least, that they are thought of as opportunities, but they come with a little bit of a risk as well as with every agreement. So there is that first thinking about downsides and consequences.
Roslyn Lavery [01:02:51]:
One last comment. I think something that I find very useful as a tool to use in thinking about these kinds of things is to consider if you would sign both sides of the agreement or if you would see value in both. So if you were the other company, would you sign this? Because very often for a partnership to work, you both need to see success, otherwise it tends to fall apart. So it can be a useful way to kind of go understand the other party’s goals and understand their perspective of what are they getting out of this. So rather than just approaching the conversation from a perspective of what you want to get, which is much more of a sales mindset, if you would think about it like that is kind of a partnership mindset to me. In comparison is a lot more of understanding. What is the other party getting out of this and how can I offer that in a way that is least costly to me but offers them great value? And what do I want to get and how can I achieve that from them in a way that doesn’t cost them a lot? So it’s one lens that you can kind of use as a bit of a tool to understand how would I make this work, would I sign this agreement from the other side? And if your answer is absolutely not, you’re probably asking for something too much or you need to find a different way to structure it or whatever.
Maciej Nowak [01:04:25]:
I love descending because this is very fresh and universal to any kind of agreement really, because I love how you have framed it. Would you be willing to sign both ends of agreement? So I absolutely love it.
Roslyn Lavery [01:04:45]:
Yeah. It’s tricky thing sometimes to put yourself in those shoes as well because you don’t know that person’s perspective either. But it’s a good tool.
Maciej Nowak [01:04:56]:
Yeah. Roslyn, thank you very much for our conversation. I really like how we have covered all of those different ways of cooperating with that partnership. Glasses, let’s say thank you very much and see you next time, hopefully.
Roslyn Lavery [01:05:16]:
Yeah, wonderful, thanks. That’s been really great and I enjoy the questions and the non questions.
Maciej Nowak [01:05:24]:
The first one that enjoyed non questions. Thank you.
Roslyn Lavery [01:05:28]:
Also about the conversation, it’s great. Wonderful. Thanks.
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