In the early ’90s we were just starting out as young entrepreneurs. We were very green and very ambitious. We produced conferences for hotel investors, and we were holding one at the Beverly Hilton Hotel in Beverly Hills, California, owned by legendary businessman and entertainer Merv Griffin. At a cocktail party he hosted for us on the opening night of the conference, we and Griffin were mingling with delegates, chatting about hotels and explaining our perceived need for partners to help build our business. Hearing the word “partner,” Griffin turned and said decisively, “If you don’t need a partner, don’t have one. Partners can get in the way of what you want to do.” These words made a profound impression on us. But rather than scare us away from partnering, they started us on a journey to build our first successful business partnership.
We call our first step toward building successful partnerships the “Thank You, Merv” principle. We know Griffin wasn’t actually telling us, “Don’t have partners in business.” He had many partners and business relationships throughout the years, including King World, now CBS Television Productions, and Sony Pictures Entertainment. These collaborations helped Griffin become successful (he netted millions when he sold his company to Coca-Cola in 1986). We think Griffin was really saying that you need to know why you are entering into a business partnership, you should be realistic about what to expect and you should proceed with a reasonable amount of caution.
What we’re saying to you is, “Wait a minute. Step back. Think about what you’re about to do.” If an opportunity to partner on a project or business presents itself, make sure that a collaboration is really what you need or want in order to create or grow your business. Entering into a partnership is not something to take lightly. It can, and most likely will, have a profound impact on you and your business.
A basic question to consider is whether you’re coming into the potential partnership from a position of strength. Successful partnerships start with a real purpose. There has to be a “need” or a “want” to be fulfilled that’s compelling enough to overcome forces that might pull you and your partner apart. A partnership needs to advance you or your business and help you achieve the level of success you seek. When you occupy a weak position, you might need the partnership in order to be viable, whereas when you come from a stronger position, you might want a partnership for freedom or competitive advantage.
When we’re approached with an opportunity to partner, we put ourselves through a pretty rigorous mental process. We start by asking ourselves three things:
- How much will the project cost? Not only in money, but in time and resources.
- Who is doing the work? We want to have a clear idea about who in the partnership would do what.
- What’s in it for us? Beyond financial gain, what are the other benefits for us? Are there any? And is the financial gain compelling enough?
If the initial answers are positive and plausible, we dig deeper and ask ourselves questions designed to help us evaluate not merely the idea of partnership but any specific offers on the table:
- Why do we want to partner?
- Do we need a partner or do we want a partner, and do we really know what those needs and/or wants are?
- Will joining forces get us further ahead than we could get on our own?
- Do we know the risks in taking on a partner, and are we prepared for those risks?
- What do we really know about this partner, their track record, image, goals and objectives?
- Are we prepared to give up control, in part or in whole, of our ideas or business and attach our future prospects for success to another?
- Are we willing to share our success, and are we willing to risk taking on someone else’s failures?
It’s so important to answer these questions carefully. Although partnerships can offer great benefits, they can also pose great risks. Entering into a partnership does place restrictions on your ideas and how you carry them out since your partner will usually want to have some say in how things are done. Once the partnership is underway, your expectations might not be realized, and you will need to know how to handle the disappointment. At some point, differing priorities and points of view may arise that require conflict resolution—will you be able to handle that? Are you a fighter or a pushover? Finally, although a partnership might bring you more independence because you will have someone else to help carry the load, you might need to carry your partner’s load sometimes too.
Better to spend a little time thinking now than a lot of time (and expense) extricating yourself from a failed relationship later. In effect, what you’re doing in taking the time to think is building a foundation for your partnership. When a partnership is based on a solid foundation, there is nothing better. When a partnership starts on shaky ground, watch out.
This article was published in September 2016 and has been updated. Photo by @SBphoto/Twenty20
For more than 25 years, Jim Burba and Bob Hayes have been partners in life and business. Their book, Smart Partners will be published by SelectBooks (New York) on September 6, 2016. Co-founders of Burba Hotel Network and Burba Hayes LLC, this couple has formed a power partnership that produces conferences for the hotel investment community, feature films, and a Broadway musical. Since 2000, their conferences have attracted nearly 90,000 international delegates in 22 countries. Follow them on Twitter or at www.BurbaHayes.com.