- So for me, really, it's two things.
It's the collaboration; the working
with partners to unlock value.
You know, fundamentally a joint venture is
about creating more value than the sum of the parts.
The second piece is variety.
You know, there have been seven-and-a-half thousand
different joint ventures started up in the last decade
and every single one of them is different.
You know, it's interesting, BCG research has shown that
about 90% of joint ventures do not deliver as
much value as was anticipated.
And about 80% of companies report
that actually they feel like they get less value back
than they put into joint ventures.
So clearly there are a lot of challenges
but when done right, there's a lot of value they can unlock.
You know, a couple of the common pitfalls we see are a lack
of alignment around strategic goals.
It's about poor working cultural chemistry
between two different partners.
It's about poorly defined business plans,
and its inflexibility to change
to a changing external environment.
The first is where you see that both partners
taking a really investment mindset.
You know, they both think about it as they're buying
into a joint venture, they're contributing something
but they're also getting something back.
And that's really important,
because it provides the joint venture with the investment
and support that is required for it to flourish.
The second is around a functioning
and effective partner governance.
You know, that means that you avoid micromanagement
but you also avoid a lack of interest
and disengagement from the joint venture to really again,
make sure you're providing the support that is required
for the joint venture to be effective.
And finally, the early successes are critical.
You know,
over-investing upfront to get the early successes there
to build the foundations, whether that's
around the first board meeting or the first sales
or the first product launch.
You know, get those early successes
on the board and that will allow the foundations to be set.