Innovative Partnerships: the key to a new Capital Efficiency

Written by Gregory French

Executive summary

Everyone wants to power growth, but fewer and fewer are succeeding. In the Industrial Age, capital looked like the answer and the concept of capital efficiency was limited to a monetary metric that spoke to fiscal health as the driver of value.

In our era, the demand for innovation requires much deeper collaboration: using each others’ resources, particularly knowledge and expertise. Intellectual capital has become as valuable a currency as monetary capital. Innovative strategic alliances enable partners to share knowledge and value delivery - lowering costs of entry, ensuring more effective use of resources, accelerating growth, and increasing return on investment.

The right partnerships gain ability without growing or buying it. By sharing a future focused on generating new value, designed to address mutual concerns and mutual benefit, strategic allies can create capital efficiency and competitive advantage.

Start with a strong foundation

Strategy is key. Explore and refine your landscape of opportunity together with your objectives – the future you want to create. That will ensure that your strategic intention combines vision and action.

Take the time to develop a clear, compelling statement. It can serve as a lightning rod that galvanizes action and shines light on the clear path and associated risks.

You’ll be better prepared for whatever comes at you – more match tight – plus visibility to the goal makes others want to play with you – gets them on board. Seeing how you will be successful sparks their appetite to join.

Understand the game

The challenge is superior use of resources. Capital Efficiency improves probabilities of success by either boosting returns on investment or accelerating movement to cash flow positive.

Resource efficiency is not just about managing costs but about identifying alternative value propositions that allow you to acquire skills, services and assets vital to growing the business without having to use capital resources.

Strategic Alliances are a key means of achieving Capital Efficiency and accelerating growth opportunities. Innovative revenue-share model design and detailed relationship negotiation are core.

Critical success factors

  • Visibility to Success galvanizes action and makes you a desirable candidate for Strategic Alliances.

Invest in detailed exploration and refining of the opportunity/objective/future so that your Strategic Intent combines vision and action and brings to light potential risks. Critical Path Analysis refines your objectives and opportunities, then designs milestones/building blocks that lead you clearly to your desired outcome and success. This kind of detailed knowledge truly is power and gives you a strategic athleticism that makes you fit to play in a competitive and dynamic landscape.

  • Relationships as resources

Build partnerships that allow you to structure the acquisition of skills, content, distribution or other resource requirements and lower initial capital outlay prior to cash flow generation. Think of relationships as capital, and assess them accordingly.

  • Be an expert about your partners’ concerns

Make sure that you truly understand all parties' concerns and desired outcomes. This greatly improves your effectiveness as you envision, design and communicate a future that you can create together, as well as design and execute a contractual and economic partnership that thrives. Your partners become part of your critical path.

This is the key driver - can’t stress it enough – take your partners’ concerns as seriously as you take your own.

The turbo-charger

Recognizing value that is not obvious is the key to market leadership.
New value is the name of the game. It hides beyond low-hanging fruit, and standard metrics and propositions, and requires the courage to consider abstract and interconnected value correlations.

Information is abundant, which places great value on the craft of synthesizing it: discerning patterns and observing connections that are not obvious to others. Part of the trick is to understand how value is perceived by people and entities whose views differ from your own.

The task begs for contagious curiosity and compelling questions to draw out what is typically guarded information. Genuine questions neutralize anxiety about status and competition. A properly targeted question can shift perspective and result in discovering untapped opportunities, fresh assessments, and the opportunity to design elegant solutions. Step into every conversation with authentic concern for your partner’s interests.

Resting on a clear understanding of your goals and the ability to articulate concerns and show visibility to success, even a small startup can show up as a horse that is worth backing.

 
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