The power of professional partnerships
It may go against your natural instincts to partner with a competitor, but it could be the secret to your success. We talk to two firms who have established mutually beneficial relationships with other businesses in their sectors.
“Loyalty and relationships are paramount,” says Brent Campbell, Deputy Managing Director of Perth-based insurance broking firm Oracle Group.
“You make a commitment to each other for growth. And in times of need, that loyalty can be helpful to lean on.”
Partnerships work both ways
18 months ago, Oracle merged with Centro Chambers and Agile Insurance Advice. The intent was to broaden their national network and increase profits, with the three firms sharing operations costs. The goal was to develop a network of 25 Authorised Representatives (ARs) across Australia within five years. “We started with two ARs in Western Australia, but with the new partnership, we reached that target within just six months,” says Campbell.
Our strong partner relationships are important because they mean we can provide better outcomes for our clients.
He says they are now focusing on nurturing and developing this network to create lasting value. “We took the time to set strict guidelines, so although the rapid growth was unexpected we were prepared with structures in place.”
For Oracle Group, it’s a chance to build brand awareness and market position across Australia. For their ARs, Oracle provides new opportunities through access to improved scheme agreements that draw on the strengths of relationships with insurers.
“We’re all trying to grow together. We take an earning from their business, in return we cover their operating costs such as managing their compliance requirements, professional indemnity insurance and IT support,” says Campbell.
Solutions for the greater good
Kris Kitto is a Director at Superfund Wholesale, a Gold Coast-based self-managed super fund (SMSF) administrator. Kitto says, “We love the term ‘partnering’. It centres on long-term relationships that are win-win and based on mutual trust. Our strong partner relationships are important because they mean we can provide better outcomes for our clients”.
Superfund Wholesale has three key partnerships that, together, have formed a powerful symbiotic relationship.
When you a find other businesses with a similar ‘why’, then you will be able to truly connect with them.
“We really believe the power of the collective is stronger than each individual provider alone,” says Kitto.
Most significant has been their partnership with Class Super, who provides market leading SMSF software.
“Class had a challenge,” says Kitto. “They wanted to provide their product to small and start-up accounting businesses, but were restricted by a minimum requirement for their licence fee.”
The minimum was 25 licences, which well exceeds the number of clients most small accounting businesses have. So together they created the SMSF Incubator to allow start-ups and small accountants access to Class’s award-winning software.
“We solved their entry barrier by becoming a re-seller of the software to remove the minimum number of SMSFs required,” says Kitto. “And, for us, exposure to their technology has really enabled us to innovate.”
“It’s been great to work together and create a platform that helps other businesses within the SMSF community.”
Trust and a common goal
Building partnerships based on loyalty is part of Campbell’s heritage. “My grandfather started a business in 1987, and three of his directors are still with us.”
“The key to a partnership is having loyalty and trust in each other, so knowing we have a mutual history helps,” he says. “We’ve also learned a lot from our clients about loyalty – some have been with us for 10 years and we are effectively a cog within their own business, a trusted adviser.”
For Kitto, it’s about knowing your purpose and having a shared goal. “As a business you need to understand and articulate why you do what you do.”
It’s like a marriage. You need to get to know each other first before making the commitment.
“When you a find other businesses with a similar ‘why’, then you will be able to truly connect with them,” he says.
Oracle is also part of the IBNA cluster group – another example of collaborating with competitors. “This lets us all benefit from economies of scale. We can use our combined resources to invest in IT platforms for example, as simplifying processes is a significant priority but it comes at a cost.”
Similarly, Superfund Wholesale is a part of Macquarie’s Virtual Adviser Network. He says joining was one of the best decisions the business has made. “It’s about like-minded businesses collaborating and sharing experiences and resources,” says Kitto. “We’ve gained invaluable clarity around our strategic planning, positioning and marketing.”
Formalise your agreements
A formal contract of intent protects the interest of both parties. “Each side has a set of obligations. It’s no longer a case of doing a deal over a handshake, as my grandfather used to do,” says Campbell. “You need to hold each other accountable. Your reputation is everything.”
For Kitto, formalising your agreement is the last step in the process. “It’s like a marriage. You need to get to know each other first before making the commitment.”
Be prepared to walk away
Not all partnerships succeed, and Campbell admits that’s a risk.
“Any agreement is simply that, until you spend enough time together to build confidence in your relationship,” he says. He has experienced first hand the professional and emotional strain of a difficult partnership situation.
“Sometimes you need to take a stance, to maintain your integrity and resolve the issue amicably. Make sure everyone sticks by the agreement, and then make the tough decision to walk away if it’s not working.”
Which is why Kitto recommends a more organic approach to building a partnership. “If you start with the agreement, often you don’t get the outcome you wanted because the relationship and alignment is not there,” he says.
There are enormous benefits from collaborating with competitors. “It’s about a perception shift,” says Kitto. “There’s no shortage of clients in our market space – so what’s the point of trying to compete. There’s a lot more power from collaboration.”
For Oracle and Superfund Wholesale they’ve both benefited from better product development, shared resources and geographic expansion.
“It’s about synergy,” says Kitto. “Then putting the formal agreements in place to minimise risk.”