Managing Risks and Evaluating Success

It pays to take an eyes wide open approach - contemplate and plan for risks.   It could save you tens of thousands, your friendship and your reputation.   How do you know how successful your partnership is?     Will it achieve what you expect?

The partnership venture may seem a good idea, but what could go wrong?   Many partnerships are based on family or personal relationships with other professionals.  A lot of trust can be placed with partners that do not live up to expectations.   Based on conversations with businesses that have experienced failed partnerships are some reasons why partnerships fail - can you add others?
  • Too many cooks in the kitchen – partners with identical skills sets and not enough diversity to add-value
  • Partners have different (and conflicting) values
  • At least one partner is a control freak and treats others as staff
  • Imbalance of effort – one partner perceived to be putting in more time and energy than the other(s)
  • Partners not being transparent – especially when it comes to the money – whoever is controlling the money may hold the power
  • Partners bringing hidden debts to the partnership venture
  • Hidden agendas
  • Lack of communication
  • Too much, too fast
  • Probably didn’t need a partnership in the first place
  • One partner thinks in small business/employee mode (ie get paid for effort) whilst the other partner may be in business building model (build the brand, customer base, structure for the long term) and may not see eye to eye because of this
  • No agreement in place, or agreement missing elements
  • Management and priorities change – the partnership becomes irrelevant
  • Differences of opinion – who wins the argument?
  • The balance of power changes when family members are drafted in to ‘assist ‘with day-to-day operations
  • There’s no exit clause
  • No policies and procedures and/or documented system
  • Not resolving issues when they first occur – leads to underlying resentment   Can you think of at least three more reasons ...
  1.  _____________________________________
  2.  _____________________________________
  3.  _____________________________________
  How do you plan for risks?   Below is an example of a risk management plan.     Use the template to prioritise risks within your partnership?     Use your findings to inform decision-making and partnership planning activity.

Partnership Risk Plan Example

H = high, M = Medium, L = Low
What could go wrong? How will we know? What is the likelihood of this happening?(H/M/L) What will be the impact if it happens (H/M/L) What could be done/planned now to prevent or reduce impact or the risk?
A partner tries to take over for their own benefit They monopolise conversations They persuade others that theirs is the only way They get their way or make things difficult if they don’t   Medium High – partners may decide to withdraw or end up with processes or resources that don’t suit their needs Refer to the agreement.  Ensure the objectives are maintained.  Build in option to withdraw if milestones/objectives are not achieved  
Not all partners contribute Partners miss meetings Partners don’t follow up on commitments Partners make excuses   Medium High – may lead to resentment.  Indicator they may withdraw. May impact on achieving deliverables Refer to the agreement.  Ensure everybody agrees to the roles and responsibilities. Build in grievance procedure into the agreement – in the event that partners are not happy
Staff won’t agree to the change and may make things difficult Blockages – change processes slow down   Discord – rumours upsetting others Medium-High Implementation slows – impacts on budget and timeframe Staff become unsettled – absenteeism due to stress Develop and follow a change management plan Engage a facilitator who can manage conflictEngage all staff in the process – good communication
The project is perceived to takes up too much time Resources relocated to the project Other parts of the business slow down because resources diverted to the ventureUnexpected expectations from partners on our role Low-medium Other business activities become exposed – drop in income and profits     If the partnership venture is taking up more time, refer to agreement and scope statement Call a partnership governance/management meeting if this is an indicator of a larger issue.
NEXT UP ..... EVALUATING SUCCESS

Downloads

Managing Risk Evaluating Success Managing Risk
Risk Management Template Partnership Risk Plan