New Strategic Partnership
One thing I’ve been spending the majority of my time on recently is a large strategic partnership. The relationship we’re developing is one that will drastically change our business – and we’ve been lucky enough to have a number of firms eager to be our dance partner.
With so many options, and so many different factors to be considered, how do you figure out who fits best? Here’s an idea:
| Effort | Chemistry | Domain Expertise | Cache | Value | Total | |
| Firm A | 2 | 1 | 1 | 9 | 4 | 3.4 |
| Firm B | 5 | 3 | 5 | 1 | 3 | 3.4 |
| Firm C | 6 | 4 | 4 | 3 | 6 | 4.6 |
| Firm D | 1 | 2 | 2 | 8 | 11 | 4.8 |
| Firm E | 10 | 6 | 10 | 4 | 1 | 6.2 |
| Firm F | 3 | 5 | 3 | 10 | 10 | 6.2 |
| Firm G | 7 | 7 | 8 | 2 | 8 | 6.4 |
| Firm H | 4 | 11 | 6 | 11 | 2 | 6.8 |
| Firm I | 11 | 9 | 7 | 5 | 7 | 7.8 |
| Firm J | 8 | 8 | 11 | 7 | 5 | 7.8 |
| Firm K | 9 | 10 | 9 | 6 | 9 | 8.6 |
Out of 11 potential partners, we’ve ranked them 1-11 across a variety of metrics, and then averaged the total [if we got really savvy, we'd give a weight to each metric then build a weighted average...]. This is a great way to take emotion out of a decision like this. What’s best for the business becomes pretty clear, very quickly…
More on this shortly. Stay tuned!
October 9th, 2005 at 5:44 pm
Hmmm…its all Greek to me-but yes, I get the point, loud and clear. Its easy to see which route to take.
BUT…one thing has me a bit concerned here.
drastically change our business
Uh…HOW drastically and what, if anything, does that mean for us BzzAgents? lol
Cathy-aka:BzzAgent, jus2cusmile
October 9th, 2005 at 6:40 pm
It will mean things will get even better for BzzAgents! Don’t worry, we wouldn’t have it any other way.
Dave
October 9th, 2005 at 9:03 pm
Will it involve a new channel?
October 9th, 2005 at 9:21 pm
A channel like expoTV? Oh look! Pete Blackshaw\’s on the board of
advisors…hmm, now if only BzzAgent produced video…
sorry dave, couldn\’t help it. -owen, coBRANDiT
October 10th, 2005 at 8:37 am
Dave,
Great to see ya!
I am honored by your reply.
Thanks for the answer and while I was wee-bit worried there for a sec…I would expect nothing less than \’better things\’ from you guys!
Thanks!!
Cathy-aka:BzzAgent-jus2cusmile
October 11th, 2005 at 4:06 pm
As a bzzagent and an algebra teacher, I love seeing things like this – real
world applications! This one is especially good, since the math is
straightforward enough that you don\’t have to know a whole lot to
understand it.
October 11th, 2005 at 8:50 pm
Dave,
And a partnership with the likes www. redtoucan.com?
Part social network part e-commerce network should interest bzzagents?
Think Friendster meets ePinions. – with a bunch more.
Buzzagents, have a look and vote with your mouse!
FREE t-shirt or cap to those that do.
http://www.redtoucan.com
cheers
Willy
October 13th, 2005 at 11:19 am
Dave,
I tried to keep out of this and hoped that when a math teacher responded I wouldn\’t have to, but unfortunately it seems he was never involved in decision models or statistics.
You have inadvertently weighted the results of your analysis by using rankings of the 11 companies on each factor in the model. I doubt if you intended for a company ranked an 11 to be mathematically equivalent to saying it is 11 times better than the company ranked one, but that is what happened. You basically have set up a nonparametric analysis (the only thing you can say is that is a company ranked 11 is better than 10, 9 etc; but can not say how much better) and averaging such data is not valid.
A more accurate way of doing this same basic analysis would be to independently rate each company on each factor on a scale of one to ten and if possible anchor the scale with at least somewhat objective criteria. (for example: for chemistry a one would be \"never want to see these people again\", a ten being \"where have they been all my life\"… by the way, tried to pick the most \"touchy-feely\" criteria for my example, some of the other criteria may be more easily quantifiable).
I would also caution against weighting all factors equally (as you indicated you are aware) but more critically you may have at least some factors which have an inverse relationship to the decision. Do you really want someone with high \"domain expertise\" or would it be more beneficial to form a partnership with someone with little expertise who will defer to your judgement?
Good luck on your decision, I hope you don\’t mind too much that I felt compelled to offer my two cents.
—
Gary
October 13th, 2005 at 12:26 pm
I\’ve performed this type of analysis when evaluating vendors and it pays to be careful in how you use the numbers. The math teacher has some good points, but making it mathematically correct also creates the issue of everybody \"grading easy\". If you do go to separate grades, don\’t allow 1-10; break it out similar to 1/4/7/10 to have people make decisions.
Weighting is IMPERATIVE. Look at the categories and determine what is important to the success of this partnership. You may want to automatically eliminate certain firms if scores in a critical category are too low. Chemistry and Value seem critical. Unless you are just looking for buzz…does Cache really matter?
Do you have the right categories or is there too much overlap?
The best models still don\’t make it easy to follow the facts and ignore the emotions. Stand tall with the team and don\’t let Cache lead you down the wrong path…
October 13th, 2005 at 12:52 pm
Hi,
Not sure if you were referring to my post (not a math teacher, Bus. undergrad and grad and very heavily into measurement/stats in grad school) but I agree that you have to be careful of the \"Halo effect\" in this exercise. That is the reason you want to try to objectively (as much as possible) anchor each point in your scale, this will help minimize the effect.
—
Gary
October 15th, 2005 at 10:26 pm
I have found a customer can (almost) always be educated. And \"cache\" was big BEFORE the FIRST dot-com crash. Is it really important to you now?
Here is an idea, borrowed from my husband\’s risk-management class, and a few other places. First, what is the probabillity of success with each partner? Next, what is the $ value of the relationship with each partner. Multiply the two, and you have an expected value for each. Take the highest
If you are bullish on dot-com in general (and I think you are not!) then you take the relationship that gives the biggest payout the soonest. Invest in REIT index funds, and some other stuff.
Study fine print closely!
Best regards, – LegoMommy MS, MBA
October 16th, 2005 at 10:02 pm
I think I meant bearish on the dot coms! – LegoMommy
October 17th, 2005 at 11:19 am
One thing you haven\’t put into the table is the question: \"how well do they partner?\" Beyond the chemistry fit, you can ask if the group has done partnerships in the past, can they present co-branded teams / answers to clients, will they be responsive when you get into the detail.
Agencies form networks all of the time, but some are better at pitching integrated teams (BBDO recently) then others (IPG). Some work to get people to know each other through organized programs (WPP, Omnicom), some are more cut-throat on how they approach business. And this gets baked into financial systems, performance evaluations and all of the big company bureaucracy.
Take a look at how many partnerships they have and how many are currently running. How did ones that ended end? Partnership is about keeping promises and sticking to what you each do best. Great way to build the business and a great reputation.
—
John
"When the going gets weird, the weird turn pro."
–Hunter S. Thompson
October 20th, 2005 at 12:51 pm
hi,
i\’ve used handy eval tools like this, and they work. am in the process of using one for an agency selection process. glad things are going well, dave.
talk soon,
~G~
.
October 29th, 2005 at 5:18 pm
if possible i would really love to hear spesific details on how things will be better for us bzzagents (as Cathy had first posted) and also maybe more details regarding this partnership and which company/companies you decide to go with. This stuff is really interresting i cant wait for an update on everything
BzzAgent-IrocAngel77