When two companies are considering a collaborative marketing or joint venture partnership, there is a precise recipe for success. Negotiating a joint venture is very different than other types of business negotiation. Instead of splitting the pie, where one companies vies for a larger piece, the key to joint venture negotiations is expanding the pie
When two companies are considering a collaborative marketing or joint venture partnership, there is a precise recipe for success. Negotiating a joint venture is very different than other types of business negotiation. Instead of splitting the pie, where one companies vies for a larger piece, the key to joint venture negotiations is expanding the pie where both parties walk away in a “win-win” situation.
Approaching a collaborative marketing or joint venture partnership requires a fine balance between negotiating for your own self-interests, while keeping in mind that this is an “interaction implementation” partnership, not a one time transaction where you shake hands and walk away from the table forever. If negotiations are conducted poorly, then the joint venture is doomed from the beginning.
Traditional vs. Implementation Negotiation
Traditional negotiation methods call for “trump cards”, where one party withholds as much information as possible. Since “knowledge is power”, negotiating parties perceive the sharing of information as a weakness during the negotiation process. Negotiators will not reveal what is most important to them and this may cost them more in the negotiation. Instead, through smoke and mirrors, negotiators mask what is important to them and the information they hold. In addition, the negotiators believe that the other party should conduct their own due diligence research to reveal the reality.
If traditional negotiations extend into a joint venture partnership, then the collaboration risks a high probability of failure. Like any relationship, it is open communication and information exchange that keeps the partnership healthy. However, with traditional negotiations, information is inherently kept secretive, which spells disaster when it comes time to implement the partnership. To keep a long-term collaboration and joint venture partnership healthy, it is important to disclose vital pieces of information, as this will determine whether the partnership will function effectively.
Talk about your priorities, what factors must be in place in order to make the relationship fruitful for your business. Likewise, keep an open ear to your potential partner’s needs. By speaking openly during the negotiation process, you can develop a creative solution that will relatively expand both pieces of the pie, instead of simply attempting to negotiate for the bigger piece.
Moving from the Negotiation Table to the Working Room
Once the negotiations have closed, it is time to transition into the working relationship. Interestingly enough, it is important that both partners in the joint venture relationship have an understanding of flexibility. With the rapid changes in the marketplace and emerging internet technologies, the specific details that were hammered out in the initial negotiation may not be relevant in six months. Therefore, in order to make the transition from the negotiation table into the working relationship, it is important that both parties can work together in all market conditions to continue the fruitfulness of the relationship.
The key to negotiating joint venture or collaboration marketing partnerships is open communication, ensuring that the relationship’s implementation will be meet with smoothness and not surprises.