Tuned In Partnerships

I've been watching the news around Yahoo, Microsoft and Google lately with great interest and wondering about the wisdom of the strategies behind each of moves and counter-moves being made. This week Yahoo and Google announced a partnership to consolidate their search advertising businesses (assuming a successful test of the concept). The markets yawned, expecting little to no change in the market positions of each.   

Why do so many partnerships fail?  Estimates are that 80% or more leave the companies worse off than when they started. Unfortunately, that really only measures the strategic ones ... mergers and acquisitions ... not the plethora of agreements that cover joint product, service, marketing or even distribution relationships.

It always seems like a good idea. Rather than develop the capability yourself, leverage a third party with the expertise your firm lacks (or is non-competitive). Faster time-to-market, lower costs and the ability to provide your customers with a whole product solution make the business case for combining a 'no brainer'. But then reality sets in. Culture clashes. Product overlaps need to be resolved. Execution suffers when the customer facing organizations realize they have different objectives and selling models. Management struggles over control with an equal zest for leading the change and maintaining status quo of their pet projects. 

We've been studying how the Tuned In model applies to these kinds of scenarios and found that it provides a great filter for making the go/no go decisions that uncover the 20% that are not only good ideas but executable:

1. What market problem is the partnership solving?
2. Will new buyers be attracted?
3. What is the incremental impact of the change to existing customers, employees or partners?
4. Which part of the overall experience will be better?
5. How will you communicate a powerful new idea that the partnership brings to the market?
6. Can each company still maintain (or improve) their ability to establish an authentic connection with potential new buyers? 

In truth, most partnerships fail because these questions are never asked. And, fundamental misalignments are overlooked. This is mostly because many partnership strategies are developed inside-out ... in the boardroom using only financial analysis as a filter ... or in some cases fear of avoiding the alternative.

So, how do the big three rate on the Tuned In filter? Well, I'm suspicious that it's not very well. Nothing in their communication to the marketplace thus far has even addressed the core issues of creating new value for the market or offering new solutions. It's only focused on fixing problems Microsoft has with its MSN business or Yahoo has competing in search or Google has if the other two merge. How will this make their businesses or consumer value better off?   

How about your partnerships?  Are they Tuned In or Tuned Out?