What are the most common reasons why strategic partnerships fail?

1 Misaligned goals

One of the main reasons why strategic partnerships fail is that the partners have different or conflicting goals for the collaboration. For example, a startup may want to access a large market, while the established company may want to acquire the startup's technology or talent. If these goals are not clearly communicated and aligned from the start, the partnership may result in disappointment, frustration, or even litigation. To prevent this, the partners should define their expectations, objectives, and metrics for success in a written agreement and review them regularly.

2 Lack of trust

Another reason why strategic partnerships fail is that the partners do not trust each other or share a common vision. Trust is essential for any relationship, especially in business, where the stakes are high and the risks are many. Without trust, the partners may withhold information, sabotage each other's efforts, or compete for the same customers. To build trust, the partners should communicate openly, respect each other's values and culture, and celebrate each other's achievements.

3 Poor execution

A third reason why strategic partnerships fail is that the partners do not execute the partnership effectively or efficiently. Execution involves planning, coordinating, and delivering on the partnership's goals and activities. Poor execution can result from lack of resources, skills, or commitment from either or both partners. It can also result from external factors, such as market changes, regulatory issues, or customer feedback. To improve execution, the partners should assign clear roles and responsibilities, allocate adequate resources and support, and monitor and evaluate the partnership's performance and impact.

4 Cultural mismatch

A fourth reason why strategic partnerships fail is that the partners have incompatible or clashing cultures. Culture refers to the values, beliefs, and norms that shape how an organization operates and interacts. Cultural mismatch can cause misunderstandings, conflicts, or resentment between the partners, especially if they have different styles of communication, decision-making, or problem-solving. To overcome cultural mismatch, the partners should learn about each other's culture, respect and appreciate the differences, and adapt to each other's preferences and expectations.

5 Unrealistic expectations

A fifth reason why strategic partnerships fail is that the partners have unrealistic expectations for the partnership. Unrealistic expectations can stem from overestimating the benefits, underestimating the costs, or ignoring the challenges of the partnership. Unrealistic expectations can lead to disappointment, dissatisfaction, or disillusionment with the partnership, especially if the results do not match the initial hype or promises. To avoid unrealistic expectations, the partners should conduct a thorough due diligence, set realistic and achievable goals, and adjust their expectations as the partnership evolves.

6 Lack of flexibility

A sixth and final reason why strategic partnerships fail is that the partners are not flexible enough to adapt to changing circumstances. Flexibility is crucial for any partnership, as the market, customer, and competitive conditions are constantly changing and require the partners to respond accordingly. Lack of flexibility can result from rigidity, complacency, or fear of change. Lack of flexibility can prevent the partners from seizing new opportunities, solving new problems, or creating new value. To enhance flexibility, the partners should embrace a learning mindset, solicit and act on feedback, and experiment and iterate.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?