Teaming Up – Partnership Basics with Meg Tully, CAE Meg Tully, CAE Association Development Director

What Will You Learn?  Partnering Benefits  What Are Partnerships?  Four Stages of Partnership Readiness Readiness Identification Identification Formation Formation Maintenance Maintenance  When to Call it Quits

Acknowledgements Material for this presentation is taken from the book The Power of Partnership by Plexus Consulting Group, LLC and published by ASAE and the Center for Association Leadership and the US Chamber Commerce, Book can be ordered from the ASAE Bookstore.

Did You Know? One of every two partnerships fail, according to a study of more than 1,000 partnerships entitled “When to Ally and When to Acquire,” published in the Harvard Business Review (July/August 2004).

Two Key Findings for Successful Partnerships  Each partner must benefit in some strategic way.  Each partner must understand and respect the other’s needs.

Why Pursue Partnerships?  86% of respondents said “to achieve a goal that the association could not achieve alone.”  Reach broader market segments, gain market intelligence  Advance IECA’s Mission  Advance IECA’s Mission (IECA connects, educates and develops the worldwide erosion and sediment control community.)  Develop new ways of working, improve efficiencies  Gain access to additional resources, expertise  Increase financial stability  Present unified views on an issue or policy  Increase power and prestige

Partnership Defined  Partnership: A cooperative agreement between 2 or more organizations where, without subsuming their individual identities, the involved parties share the profits and/or losses of the activities they undertake together.  Legal: An unincorporated business organization created by contract between 2 or more entities in order to carry out a common enterprise.

Types of Partnerships  General Partnership, Limited Partnership, Limited Liability Partnership, Limited Liability Company  Independent Contractor  Commercial Co-Venture  Joint Venture: Partnership formed through the establishment of a separate legal entity  Task-Oriented: Designed for a specific purpose or project (organizing a conference, producing a publication)  Process-Oriented: Value is derived from a process with less tangible results, like marketing or public education  Non-Profits with For-Profits  Non-Profits with Non-Profits  Non-Profits with Government Agencies

Partnerships Are Not  Mergers or Acquisitions  Sponsorships  Business Relationships (commercial transactions) that involve a contract for payment of products and services. The risk is borne by one party alone. “The litmus test of a partnership is the extent to which the parties involved equally bear the rewards of success and the risk of failure.” (page 17)

Stage One - Readiness  Strategy must drive partnerships.  Be Proactive - Identify strategic need that IECA can’t achieve on its own – involve Board, FAST, Chapters in strategic planning process  Desirable Strategic Directions Increase membership Increase membership Increase resources Increase resources Increase revenue Increase revenue Enhance visibility or brand Enhance visibility or brand Expand current markets (or develop new ones) Expand current markets (or develop new ones) Minimize the risk of an innovation Minimize the risk of an innovation Maximize use of resources Maximize use of resources

Know Thyself  Vision  Mission  Principles, Values  Goals – Should be measurable  Strategic environment Internal (organizational culture, staff, volunteers) Internal (organizational culture, staff, volunteers) External (economy, competitors, politics) External (economy, competitors, politics)  Knowing the above will: Help define value proposition Help define value proposition Identify areas where partnering will be most helpful Identify areas where partnering will be most helpful Parameters around which to structure partnerships Parameters around which to structure partnerships

Stage Two: Identification (Finding the Right Partner)  Identify areas of greatest need based on strategic objectives.  List possible partners that can help overcome each obstacle.  Research and start networking.  Be sure you understand the capacities and limits of IECA and the potential partner.

Strategic Fit Does identified partner have:  Complementary mission?  Compatible goals and interests?  Agreement on principles?  Strong individual contributions?  Clear understanding of liability?  Willingness to walk away each year?  Culture of partnering for organizational management and growth?

Stage Three: Formation (Formalizing the Partnership)  Goal, Roles & Responsibilities: Define goal and identify how each partner will offer support to achieve it  Get it in Writing: Put the operational agreement in writing  Communicate: Inform all stakeholders  Agree: Finalize and sign agreement  Accounting: Segregate funds and protect from conflict of interest

Six Points for Successful Partnerships  Partnership based on strategic reasons  Partners complement each other  Negotiating team consists of top staff, volunteers and legal counsel  Agreement has one year term and provision for withdrawal  All parties have equal status, and decision- making is based on consensus  Key stakeholders informed through a timely, concise document

Types of Agreements & Considerations  Gentleman’s Agreement  Detailed Operating Agreement  New Legal Entity  Agreement should address: Due Diligence Due Diligence Confidentiality Confidentiality Intellectual property Intellectual property Form of partnership Form of partnership Tax-Exempt requirements Tax-Exempt requirements Performance Performance Timeline Timeline Indemnification Indemnification Antitrust Compliance Antitrust Compliance Representations and warranties Representations and warranties Term, Termination and Transition Term, Termination and Transition

Stage Four: Maintenance  Ongoing support from each partner to indicate commitment  6 Key Elements Mutual Trust and Respect Mutual Trust and Respect Structured and Open Communication Structured and Open Communication Established Points of Contact Established Points of Contact Complementary Vision, Mission, Values Complementary Vision, Mission, Values Clearly defined Roles and Responsibilities Clearly defined Roles and Responsibilities Well-Defined Metrics of Success Well-Defined Metrics of Success “Communicate everything. Discuss everything. If you are open about what you’re doing and what’s happening, the partnership will have fewer difficulties.” – Government official (page 55)

When To Call It Quits  Failure IS an Option.  Red Flags Loss of authority or identity Loss of authority or identity Consistently missing goals Consistently missing goals Frequent breakdown in communication Frequent breakdown in communication Lack of commitment Lack of commitment Hidden agendas/unequal partnerships Hidden agendas/unequal partnerships Lack of agreement on goals in advance Lack of agreement on goals in advance Leadership failure Leadership failure Mistrust/ego issues Mistrust/ego issues “End a partnership as objectively as possible – because you still have to live with each other. That is why contracts are so important; the emotion must be taken out if the partnership doesn’t work.” – Executive Director of a trade association (page 71)

Checklist 1. Talk & Plan: Start having discussions with Board, staff, members on how partnerships can support strategic plan and mission. 2. Know Thyself: Prioritize strategic needs, recognize strengths, contacts, resources IECA has and doesn’t have. 3. Research: Do homework on potential partners to find the best fit. 4. Establish the Partnership: Draft contract, define joint goals, roles and responsibilities. 5. Maintain Partnership: Develop guidelines for communication, decision- making, assessing progress, conflict-resolution, etc. Assess annually how well partnership demonstrates 6 Key Elements (slide 17). 6. Termination: Have an exit strategy in place.

Good Luck! A successful partnership program involves sound strategic planning, thorough research and diligent implementation. But this team- approach can get you where you want to go faster than going it alone!