The difference between the winners and losers (unsurprisingly) depended on execution.

This is according to Bain’s research of partnerships and M&A leaders, that also concluded that

"Partnerships are a critical extension of the M&A and #growth"

💵 In fact, in the last 10 yrs shareholder return of frequent acquirers was ~ 2X of that of infrequent acquirers, and a vast majority of frequent acquirers rely on partnerships in addition to M&A.

But “as more companies opt for partnerships … they will discover just how different alternative deals are from typical acquisitions—and how critical it is to approach them with a fresh set of eyes.”

Execution is critical, as it’s often the case.

Top 3 WHY partnerships succeeded:

✔️ Clear value creation

✔️ Clear strategy and objectives

✔️ Senior management commitment

Conversely, top 3 WHY partnerships failed:

❌ Lack of cultural fit and trust

❌ Lack of sr. management commitment

❌ Unclear strategy and objectives

🎯 Cultural fit and trust are elusive concepts, so the helpful questions to ask are:

How similar are your risk appetites?

Are market assessments close enough?

What is the level of oversight and sign-off needed for partnership activities on both sides?

What's also essential:

🗽 Have commitment to lifetime management of partnership.

“It’s important to recognize that the future will usually be different than planned. A partnership is likely to perform well on some dimensions and underperform on others as the market evolves.

To keep the partnership relevant, a periodic strategic refresh can help… This is often most effective when done outside of the quarterly review process.”

🤝 Build internal partnership capabilities and playbooks

Whether in a centralized partnerships team (typical for those with more active partnership portfolio) or creating partnerships skills in business units, it's critical to be thoughtful on:

Creating partnership knowledge management - guidelines, processes, lessons learned, etc.

Managing overlaps and collaboration among the partnership team, management and business unit leadership.

Source: Bain & Company