The urgent need to rapidly address major climate challenges has seen a proliferation of leading multinationals engaging in large-scale, collaborative alliances in recent years. In sectors ranging from renewable energy to EVs, companies are increasingly joining forces with like-minded partners to address significant global challenges and embark on transformative projects.
Ed McEwan explores the growth of these strategic partnerships, highlighting the critical role of human capital in ensuring their success.
The evolution of strategic partnerships
The concept of commercial partnerships has transformed significantly over the years. Traditionally, partnerships typically involved a dominant player with a majority share dictating the terms with a smaller partner.
However, with increasing technological complexity and urgent global issues, such as the need to significantly reduce carbon and greenhouse gas emissions, placing new pressures on companies collectively, a heightened need for more cooperative strategies has emerged.
Alliances have subsequently become a much more attractive option, offering a way for businesses to share initial investment costs, access new markets, dilute risk, and tap into a broader range of specialist expertise. From industries as diverse as aviation fuels to car manufacturing, these partnerships are making otherwise prohibitive ventures feasible.
Examples include leading automotive companies such as Volvo Group, Porsche, and Polestar partnering with fully integrated aluminium producers to develop the first truly ‘climate-neutral’ car by 2030, or Sasol and Topsoe forming Zaffra, a joint venture to develop and manufacture a sustainable aviation fuel.
Modern partnership dynamics
These alliances can often involve four or more commercial partners and, increasingly, government participation. Indeed, public-private partnerships have become common in major renewables infrastructure projects, with the likes of wind farms and solar power installations frequently involving government bodies as partners.
Partnerships are also expanding to include more technological collaborations. Companies now partner not just to bring physical assets online and subsequently manage them, but also in co-developing new technologies – accelerating and bringing new sustainable innovations to market faster, for example.
Of course, partnerships involving an increased number of collaborators bring new challenges. The diverse interests and priorities of multiple stakeholders need to be embraced and balanced, alongside various corporate cultures and operational approaches. The involvement of government entities only adds to these challenging dynamics.
The human capital element
In the past, managing a successful partnership was driven mainly by commercial interests – but that has changed. Effective partnership management now requires empathy, agility, collaboration, and a genuine concern for achieving mutually beneficial outcomes. The focus needs to be on creating win-win scenarios and ensuring all stakeholders feel valued and invested in the partnership’s success.
Finding the right people to meet these requirements is crucial. Experience from 25 years ago is less relevant today; instead, the key lies in assessing candidates’ propensity for success within the dynamics of a modern strategic partnership.
The ideal scenario is to create a balanced leadership group with diverse personality types. Individuals within this group should be able to collaborate effectively but also have distinct competencies that allow them to play clear roles at different phases of the partnership’s maturity. Ensuring cognitive diversity in the group will also help prevent groupthink and foster an environment that encourages challenging conversations that lead to better decision-making.
In general, key personality types crucial to creating a strong and dynamic senior partnership team include:
- Idea generators: in the early phases, individuals who can bring fresh perspectives and set ambitious strategies are critical. They push boundaries and set the vision for the partnership.
- Expanders: the initial idea generators often lack the ability or desire to rapidly scale those visions. So, it’s important to include leaders who excel at realising and growing early concepts, turning small-scale initiatives into significant revenue streams.
- Doers: Finally, a strong partnership team requires senior members who excel in practically implementing and maintaining the plans developed by the other two personality types. These individuals will thrive in taking detailed, scalable blueprints and ensuring they become a reality and meet their objectives.
Detailed assessments can help to identify these personality types from within the partnering organisations. In some cases, strategic partnerships can also benefit from the inclusion of external experts or consultants to bridge any gaps in expertise and provide fresh perspectives.
Additionally, ongoing training and periodic reviews should be incorporated into human capital strategies, to ensure the team remains agile and capable of adapting to new challenges.
Conclusion
The trend for big businesses engaging in large-scale strategic alliances to tackle major challenges or realise significant opportunities is only set to grow. Getting the human capital element right is crucial to their success. Leaders selected to head up these ventures must be able to foster trust, embrace diversity, and continuously adapt to evolving priorities and demands. Getting the dynamics right upfront will pay dividends in the long run.
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