Achieving business growth is a key priority for SME Directors. That being said data from the Global Entrepreneurship Monitor shows that early stage entrepreneurs and SMEs in the UK have the second-lowest growth ambitions among G8 economies. With this in mind it has naturally led to increased government policy focus and academic focus on supporting SMEs to grow. In particular there has been a focus on promoting collaboration and strategic partnerships between SMEs. This has been particularly successful in the UK tech and digital sectors.
While the primary driver for an SME to enter into a collaboration or strategic partnership is increased profit and business development, for me it should never be the sole consideration. Of equal importance is compatibility of the strategic partners with the core values, organisational cultures and reputation of the SME enterprise seeking collaboration and strategic partners to grow and develop. That should be front and centre ahead of profit potential because that’s what makes partnerships sustainable.
On 15 January 2017 Edelman released their latest Trust Barometer research. It showed the largest drop in public trust across the institutions of government, businesses, media and NGOs since Edelman commenced tracking trust levels against this segment in 2012. In practice what this means is that increasing and maintaining public trust for any business or strategic partnership is critical now.
Alongside this the digital world we live in has resulted in increased citizen activism against businesses through social media. This rise in digital empowerment has increased the influence of citizens on business behavior and transparency. The result is the public can easily spot today when an organisation says one thing but its actions say another. That mismatch weakens public and stakeholder trust in your business. That in turn brings reputation and crisis management challenges.
When you take the Edelman research findings and integrate that insight with the digital world that we live in today for me you can see three strategically critical things that relate to strategic partnerships.
Businesses today are operating in a climate of increasing public scrutiny – more now than at any time in history. In this environment authenticity in corporate communications, stakeholder engagement and employee behavior fast becomes business critical for reputation management.
Becoming authentic as a brand means living out your core values and aligning your core values with public opinion and expectations of businesses to in turn promote trust. Living out your core values in reality extends far beyond profit. It means increasingly having a social impact. There is a strong role for values based recruitment in today’s climate – it can help when implemented strategically secure employee buy in to your core values and vision. It also necessitates an increasingly strategic approach to Corporate Social Responsibility. The reality is organizations today are operating in a post profit age. In a post profit age the interconnected triangle of core values, governance and organisational culture alignment all come together to play a central part in sustainable and effective reputation management.
That all of this taken together means when entering into strategic partnerships you need to consider from the very outset the impact of the partnership on your own founding values as a business, your organisational culture and brand authenticity. Values compatibility across the strategic partner organisations rests at the heart of partnership sustainability not profit potential.
With this in mind the natural question is how can an SME business help safeguard and enhance its reputation when considering entering into a strategic partnership? I offer three top tips:
Before entering into a strategic partnership use your resources to build the capacity of your organisation to prepare it for growth that will result from the partnership. By building capacity I mean building the skills and expertise of your staff, injecting flexibility into your processes and strategies and generally becoming a more agile business to capitalise on opportunities. This can help build a strong foundation for a sustainable and effective strategic partnership.
Do not rush into setting up and agreeing the strategic partnership. Take the time at the start to engage with the strategic partners collectively and individually. Get to know their business and take the time to build relationships and trust with key people in the partnership. Consider during this engagement process how do the values and ethos of the potential strategic partners align with and complement yours? What is the public perception of the organisations you are partnering with? Will the strategic partnership build not only the capacity and profit of your business but also enhance and strengthen your brand authenticity and reputation? To help in this process consider doing sentiment analysis software to track sentiment patterns and history for the partner organisation. How has public sentiment towards their brand or organisation changed over time? What is the public perception of their brand?
Integrate your Corporate Social Responsibility strategy and activity with the strategic partnership. Corporate Social Responsibility and the strategic partnership are not two separate things. The two interact with each other and an integrated approach between them can increase value and enhance brand reputation. Look for ways in which your corporate social responsibility activities can complement and cross over with the strategic partnership. Any strategy without integration across the enterprise and strategic partnerships built into it from the start will likely not be sustainable, resource efficient or achieve maximum value impact.
