Hello, Newman!

It's hard to imagine now, but there was a time during the nineties when we didn't watch much TV. Maybe my wife and I (my girlfriend, back then) were working too hard, or had better things to do. Now, with the kids and all, we have a tendency to crash in front of the TV for a while after they're all in bed. This past summer (rerun time), we invested in some DVDs and were enjoying some Seinfeld reruns. While I enjoy all the characters for their peccadilloes, the one that I marvel at the most is Newman. Newman stands out for his lack of vulnerability, and literally revels in his power as a mail carrier. He understands that his customers are dependent on him and he celebrates the power this bestows on him. WA-HA-ha-ha!

And, why, you might ask, would I bring up Newman at a time like this? Well, the other day, I met with a colleague who was lamenting the relationship that had developed with one of his company's key partners. The partner's business had grown substantially over the years and now represented a dominant share of revenue. You may be thinking, "Oh, stop whining!" But, wait, there's more: the partnership was structured around exclusivity, restricting his company from bringing on other partnerships within the same market space. While the relationship with this partner remained relatively strong, he worried that his company's dependency would put it in a vulnerable position. He doesn't want to be beholden to Newman, if you will.

While hindsight is 20:20, it's hard to see the danger signs of an unbalanced partnership while the mail truck continues to pull up to your mailbox day after day. To help assess how healthy your partnership is with any one leading partner, you may want to ask yourself the following questions:

•  If the partner was acquired, or its business was affected by market
   conditions outside your control, to what degree would your
   business suffer?
   Having more than one "anchor tenant" protects you if one tenant closes its
   doors or moves to another location.
  

• What percent of your resources (and time) can you afford to dedicate
   to any one partner, and for how long can you sustain that level?  Sometimes, the resources lavished on a successful partner can
   detrimentally affect your ability to respond and nurture an emerging partner.  While dedicating precious resources to fewer partners almost always
   results in a higher quality partnership, dedicating too many of those
   resources to one partner can put you at risk of losing flexibility and the
   ability to respond nimbly to new opportunities.
  
  
•  How much is the partner contributing to the bottom line?
   While top line results are important, if the partner is costing too much to
   manage and keep happy, it may be time to consider alternatives. You may
   be better off letting go of exclusivity or rebalancing your partner portfolio.
   And, be careful about betting on the promise of revenue for too long. If
   you haven't seen revenue progress to match your resource investment
   after six months, the chance of it happening without intervention is slim.

Even if you ultimately decide that this partnership is worth its weight in gold, it's wise to insist on a regular partner review to minimize complacency. It's a good opportunity for both parties to look at progress against the plan and to shift strategies and resources as needed.

The last thing any of us wants to deal with is a character whose favorite refrain is "when you control the mail, you control information!" WA-HA-ha-ha!

Here's to a healthy balance of partners that keeps you ahead of the curve.

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