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Business Strategy. Begin with a sound,
well-articulated
strategy.
Before moving forward, determine and explain why you wish to enter into a
joint venture, why you have chosen your
partner(s), and what you hope to
achieve. Define involvement (managerial, capital, etc) of the parent
companies and how long the JV will last. Put in place strategies to define
governance, accountability,
decision-making process, and conflict- and
issue-resolution procedures. Ensure buy-in and participation at the highest
level. Consider outcomes: what could cause you to terminate the joint
venture, and what is the preferred exit strategy.
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Human Resources (HR) Strategy.
Develop HR strategies that align and support the goals of the JV: develop a
distinct identity and
culture for the new organization; communicate
aggressively to employees; and establish distinct career paths, management,
and a means of return for employees transferred to the JV. Create
compensation,
incentive, and retention programs tied to the success of the JV.
Maintain open
communication between the HR departments of the parents and
the JV.
Leadership. Define a process
for
leadership selection that's
seen as fair and credible, and
name top-tier leadership as soon
as possible.
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Look for
key indicators of
leadership
potentials such as behavior, past experience, and measurable outputs.
Talent. Make the identification,
retention, and
motivation of the key talent a top priority. As times of uncertainty can
lead to defections, take strong counter-measures to prevent them. Paying
close attention to the specific skills, knowledge, and behavior that will be
required to achieve the new organization's business objectives, identify the
key players in both the parent companies who will be needed during the
transition to a joint venture organization and beyond. Be aware of which
employees are most at risk for recruitment by other organizations and
collect data on the causes and costs or turnover that might influence which
employees to target and which retention practices to implement. Conduct
employee research to help the new organization determine what matters to
employees and can serve as the foundation for all programs and
incentives.
Communication. To
engage and
motivate
your employees,
communication should be frequent and used to
create a shared vision, establish a connection with leadership, explain the new rules,
support the individual transition process, aid in retention, and ultimately,
define the new organization in terms of "We" instead of an "It" or "They".
Share as much information as you can, and never sugar-coat or make false
promises. |
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▪ screening of prospective
partners
▪
joint development of a detailed
business plan and shortlisting a set of prospective partners based on
their contribution to developing a business plan
▪
due diligence – checking the credentials of the other party ("trust and
verify" – trust the information you receive from from the prospective
partner, but it's good business practice to verify the facts through
interviews with third parties)
▪
development of an exit
strategy and terms of dissolution of the joint venture
▪
most appropriate
structure (e.g. most joint ventures involving fast growing companies are
structured as
strategic corporate partnerships)
▪
availability of
appreciated or depreciated property being contributed to the joint
venture; by misunderstanding the significance of appreciated property,
companies can fundamentally weaken the economics of the deal for
themselves and their
strategic alliances.
▪
special allocations of
revenue,
gain, loss or deduction to be made among the partners
▪
compensation to the
members that provide services. |
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