4: Underlying Rationale for Working Together

Okay Peter, I think I now have a more open mind about joint ventures. So what do we start with?

The strategic logic. We need to resolve a series of questions. All are necessary but not sufficient conditions for proceeding. If they can be satisfactorily resolved, we can then go on to discussion of partnership and fit, and shape and design.

But what if we can’t resolve the questions you are going to ask? What if there is fundamental disagreement either within the company or with our proposed partner about what we ought to do?

The short answer is that you better think long and hard about whether to proceed. Joint ventures require a strong foundation. We’ve all read the horror stories about buildings that suddenly collapse, killing people and causing millions of dollars of damage. The subsequent investigations usually uncover some combination of poor engineering; the use of building materials that weren’t up to code, or some such. Well, while a failed joint venture won’t physically kill someone, it sure can kill some careers. And it certainly can easily cause millions of dollars in losses, and lost opportunities.