Good partnerships are essential for long-term business success. They are necessary for building the culture and capabilities that enable superior value creation that is mutually beneficial.
No one can do this alone. It requires joining with others who have a wide variety of complementary capabilities. The more people with different and advantaged capabilities join together the more successful they and their organizations will be.
Partners are those who join with us in any form, manner or endeavor. Beneficial, lasting partnerships have three requirements:
- A shared vision The breadth of the necessary shared vision depends on the nature of the endeavor and each party’s role in it. For those responsible for a business’ success, such as its employees and co-investors, it is the full vision. For transactional relationships, as with customers and suppliers, it would be to make those transactions mutually beneficial. As trust develops, the transactional relationship can evolve into a true, quality partnership where each partner is motivated to help the other succeed and grow. For every type of endeavor and relationship there must be an understanding and agreement on the vision – what they are jointly trying to accomplish and the best way to accomplish it.
- Shared values Partners share the values necessary for making the joint undertaking successful long term. At a minimum, these include honesty, mutual respect, humility, knowledge sharing and a commitment to continual transformation.
- Complementary capabilities Each partner brings something different and important to the success of the endeavor. When both parties are intellectually honest and open about their strengths and weaknesses, they can apply comparative advantage to determine the division of labor that will generate the greatest results. Together they will achieve more than they could individually.
To maximize Koch’s long-term success, we strive to become the preferred partner of our core constituencies – all those who are important to that goal. Following are the types of partnerships that we consider most important:
- Employees who are contribution motivated and have a talent that will enable them to contribute. We help them find the role for which they have the greatest comparative advantage and reward them for the value they create.
- Co-investors who satisfy the three requirements for beneficial, lasting partnerships – shared vision and values and complementary capabilities – with whom we can create a mutually beneficial relationship.
- Customers for whom we can create the greatest value who will reward us accordingly – in particular those we believe will succeed and grow.
- Suppliers who create the most value for us and for whom we can become a preferred customer by enabling and rewarding them.
- Communities where we are able to have the greatest long-term success due to their laws, culture and location. By contributing to the well-being of the community, we become a preferred partner.
- Lawmakers and regulators with whom we can work in the spirit of mutual benefit so that laws enable, rather than hinder, people’s ability to succeed by helping others.
- People throughout society will support us to the extent we consistently practice good stewardship and only earn good profit while striving to remove barriers holding people back and motivating others to do the same.
Developing mutually beneficial partnerships takes intentional effort and time. Our relationships with our core constituencies are a top priority as they are vital to our long-term success.