Partner Conflicts Management Tips from the Experts

The 3 Most Common Types of Partner Conflicts

Every alliance manager will tell you that the most disruptive conflicts are those starting with mundane errors that escalate until reaching the executive corner office. Tactical errors can feed into hurricane-force destructive powers. One such error was when a “press release was sent prematurely without quote approval” cites former Microsoft business manager Steve Murchie. In one case, this simple error led to a public retraction by the (smaller) partner, and followed a retraction from a leading industry analyst firm who had written a lengthy report based on the press release. It was embarrassing for everyone involved and highly damaging for the alliance managers at both organizations.

The second cause of conflict is cultural. This happens when two firms with different styles come together to address a market, or develop a product without taking into consideration the working relationship and styles of the organizations and personnel.

Missed deadlines are the third most visible source of partner conflict. While not as serious as the other two conflict sources, it is the most common and in the long-term, more destructive to a relationship.

Conflict resolution Without Blame
The most effective means of handling conflict with the partner is to address the issue in as direct a manner as possible. Separating the personal relationship between yourself and your alliance manager counterpart is equally important in healing the wound of conflict.

Phillip Benz of Advanced Vascular Dynamics has had his share of conflicts and found that most handled directly are easier to dismiss. He provided an example of working with a publicly traded partner who attributed a product delay to his firm. Benz learned about this from the newswire first, his CEO second and the rest of his internal team third. This caused a communications headache which wasn’t alleviated by the knowledge his product had been shipped off months before and had nothing to do with the partner’s own internal sins.

Had this partner come forward and either acknowledged to Benz something was amiss, he might have prepared a statement for the press. As it was, Benz’s peer blithely reasoned that Benz’a company wouldn’t be impacted by negative press the same way as a public firm.

The Direct Approach

Laurie Erickson relates a great story about a conflict she had with one of her long-term manufacturers in France. She and her colleagues had just created a new design process by laminating denim directly onto hair clips. She had flown to France to share this new process to the manufacturer and left a few sample pieces behind. No sooner had she returned to America than she received a call from the manufacturer. It turned out Erickson’s primary competitor was in France the day after Laurie, and her manufacturer sold the samples, and the process to them. They claimed that once produced, it had the rights to the manufacturing process even though it was Erickson’s firm that had provided the intellectual property.

Because of Erickson’s trust-based relationships with the manufacturers, it never occurred to her that the firm would be in a position to give her designs to a competitor. But the partner defended its position. “You are still making money if I sell it to her just as if I was selling it to a retail store,” he argued. Erickson had to go through the exhaustive process of describing leadership is sometimes about industry perception, brand awareness and positioning. Unfortunately, the soft conflict resolution approach didn’t appear to work.

I had them go back and compare my growth against my competitor’s. Then I asked who they thought were really going to come up with the more innovative products to spur sales.” Erickson then rhetorically asked where they wanted to be as a business in fifteen years to drive the point home. Within twenty four hours, the manufacturer had repealed its offer to the competitor which was highly embarrassing but preserved the relationship with Erickson. “They are used to be selling a collection for a short term” Erickson summarized. “I sell for a long term.”

Reacting in the heat of the moment

Erickson wisely started her conflict resolution with logic and reason. This evolved to a subtle threat of a change in manufacturing partners, which luckily was not necessary in the end. A good many more conflicts would be resolved if alliance managers could keep their cool in the heat of the moment. Unfortunately, a propensity to take a misguided statement personally flavored with stress overcomes good sense.

Don’t let this happen to you. Protect the investment put forth by managing even the most heated situations through the use of deflection, diplomacy, and constructive application of a comment. Even the most derogatory comment can be nullified if managed properly.

Inventors or product developers of any type tend to become more personally sensitive to derogatory comments, particularly those aimed at their products. While hard, these comments cannot be taken personally. Criticism can be many things depending on who’s in the room. For example, a criticism of your product might be the means through which the PPO alliance manager gains a favor with its own engineering team. On the other hand, it might be a way for the alliance manager to set his firm up for a better negotiating position. If the criticism is raised by a product manager from the PPO, it simply might be a test of your confidence in your own product line.

Handle these arrows with the graceful side step. Never raise your voice, shake your head in a dismissive manner, or smirk. All of these nonverbal cues are more insulting that a direct negative response. You absolutely must maintain eye contact with the person talking, lean forward as if you really care and even go so far as to take notes. These simple tactics show you have the dignity to be polite even if the person on the other side of the table is a raving lunatic.

Instead of reacting, dig deeper into the wound. This will uncover if the rant can be substantiated or it it’s a smokescreen. You can politely ask if these issues have been discussed internally. If a claim has been made about your product you know to be false, don’t bother to refute it. Instead, ask for the “third party source” of the information. If the statement was fabricated or the benchmarks were conducted internally, the speaker will be forced to admit this in a public setting. You can then state a desire to see the results so you can address the problem immediately.

At the executive level, this kind of interaction is rare. In working with the chief executives of large and small companies alike over the years, snide offhand remarks are rare. In fact, the atmosphere is more collegial than anything else. It is at the product and alliance manager levels where the conflict takes place. Yet it is also where resolutions are created and the partnership bond formed and strengthened.

Preventative Medicine

The best conflict management strategy is to ensure very little arises in the first place. This is very easily done. Set expectations appropriately, deliver on commitments, and don’t use strong-arm tactics that get you the agreement you desire but at a price so high that the motivation to work with your firm undermines the written contract. In other words, annoy them but don’t make them mad.

A first start is to under promise and over deliver. Companies that bluff, exaggerate, or over represent what their product can do are setting themselves up for failure. These sounds like common sense but according to Murchie, the majority of verbal pitches he receives are “so unbelievable I just didn’t want to spend the time.” He provided an example where one person was pushing a partnership in the non-profit arena. This individual was trying to show how Microsoft could make an additional five hundred million through a partnership with his firm. It’s hard to recall a single entity in the world making that kind of money in a space defined as not-for-profit.

Instead, do your homework on the partner’s product. Understand the technology, mechanics, ingredients, fabrics, processes, and issues faced by the partner. Far too many alliance managers are large companies receive solicitations for products already shipping! Had someone done a bit of investigation, significant time might have been saved with the knowledge of a competitive product line, partnership, or unaligned corporate objectives.

When you are on the cusp of creating a partnership, be armed with known and anticipated sources of conflict. Prepare your alliance managers and executives for the bumps that will surely form on the road and directly deal with conflicts as they arise. This will keep the relationship dynamic, healthy and sustainable for the long-term.

More information on partner management techniques can be found at www.mbybizhomepage.com/education or at www.bmginc.com.


Partner Conflicts Management Tips from the Experts - To learn more about this author, visit Sarah Gerdes's Website.

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