Partner Relationship Management (PRM): The Ultimate Channel Sales & Partnerships Podcast

14 - Five Principles of Successful Partnerships & How to Avoid Dysfunction

• Magentrix PRM • Season 1 • Episode 14

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There’s a simple set of principles the world’s best partnership teams tend to follow and some common dysfunctions that hold many teams back.

Ecosystem thought leader Vince Menzione shares how to spread these five principles throughout your partnerships.

Listen to today’s episode to: 

  • Leverage the one communication hack that aligns internal and external teams
  • Drive a partnership-first culture throughout your entire company
  • And, stand out in saturated markets

Vince Menzione is:

  • The Founder of Ultimate Partnerships – a consultancy helping partner organizations drive greater results. 
  • And the host of The Ultimate Guide to Partnering podcast

This production is brought to you by Magentrix ✨💜
Magentrix is a pioneer in platforms for partner ecosystem management and partner relationship management 🤝

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To learn about Magentrix PRM, please visit www.magentrix.com

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Podcast Credits:
Host: Paul Bird
Executive Producer: Fereshta Nouri
Content & Research: Fereshta Nouri
Graphics & Branding: Fereshta Nouri

Paul Bird: 

This is Partner Relationship Management: The Ultimate Channel Sales Podcast.

Welcome to another episode of the Ultimate Channel Sales Podcast. I'm your host, Paul Bird.

On today's episode, we're going to delve into the five principles of successful partnerships.

And look at the four dysfunctions preventing successful partnerships from growing, and we'll look at how you can start implementing these today.

Today's guest spent nearly a decade as the general manager of partner strategy at Microsoft.

He accelerated revenue growth for several companies leading to successful valuations and acquisitions and was awarded the Partner of the Year Award as channel chief for a billion-dollar ISV.

Today, he's the founder of Ultimate Partnerships, a consultancy helping partner organizations drive greater results, and the host of The Ultimate Guide to Partnering podcast.

He's on a mission to help organizations do and discover partnerships better.

He's here today to talk to us about the five principles of successful partnerships and how to avoid dysfunction.

Please welcome Vince Menzione. Vince, great to have you on the show, absolute pleasure to have you as a guest.

Vince Menzione:

Paul, it’s my pleasure. Honored to be a guest here today, so thank you for having me.

Paul Bird: 

So, let's talk a little bit about your background. What’s been some highlights of your career in the channel space so far?

Vince Menzione:

Well, you know, I've described my career as four successful business transformations.

I started out in the early days of wireless computing.  

I was asked to start a new business unit. My background was in enterprise selling, and I had worked with alliance partners and built credibility and trust through these alliance partnerships, but this organization required me to build a channel from scratch.

We had zero market share in the government space.

I went to Washington, DC. I gotta say GSA Schedule. Built out a channel strategy with some successful resellers and influence partners, and grew the business exponentially.

We grew from zero to about 30 million dollars in 26 months. And then Microsoft recruited me to be the General Manager for the US public sector partner business.

So, for almost a decade, I led what became a 4.6 billion-dollar ecosystem at Microsoft. And a friend of mine, a business coach, said, hey, you know, you'd be great at doing a podcast on what you know and love: partnering.

Hence, The Ultimate Guide to Partnering was born almost six years ago. And we have now surpassed 165 episodes. It's been on a tear with that.

I started up consulting and started Ultimate Partnerships, the consulting firm. I’ve been doing that for now for several years.

At the C-suite, many times, organizations fail to align and drive the right set of results for successful partnering.

And so I specialize in that area; I specialize primarily with independent software vendors or SaaS software vendors, to help their organizations better align to understand what the principles of successful partnering are.

And then how they can build effective partnerships with the hyperscalers like Microsoft, Google, and Amazon, and their subsequent channel strategies. 

Paul Bird: 

That sounds very interesting and valuable as well. So let's get to today's topic.

How did you come up with these successful principles we're going to talk about? And how did you recognize some of the dysfunctions?

Vince Menzione:

Yeah, so I've always carried this set of beliefs and principles.

It's funny, I’m a big fan of Stephen Covey, and The Seven Habits and Principles are universal.

There are a lot of tactics we do, but I started thinking about what are the things that are universal across partnerships in general.

I have a set of beliefs and operating principles around those. And I think about these principles as both the internal principles or victory and also the partnership victory; I look at them from two sides of the equation.

And what I found, and what I said earlier, is that organizations struggle internally.

The CEO might say some platitudes around what makes successful partnering or they might say, yeah, we're committed to partnerships. But internally, within the four walls of the organization are they walking the talk?

Are they applying investments?

Is the mindset of the organization right?

Is there a commitment at the executive level across the organization?

Are there accountabilities across the leadership team and the rest of the organization?

What the C-suite says up here and what the sales organization and marketing organization do down here, sometimes are incongruent.

They're not attached and related.

So, how do we get that internal victory?

And so we have some principles around that.

We have the mindset, the executive commitment, a vision, and a value-first strategy for partnerships.

Then, you cross over from the internal victory to the partnership victory. And then, what are the things you apply to the partnership, the set of principles that make the partnership stand out?

One of them is applying maniacal focus to the partnership.

Paul Bird: 

I love that term, maniacal focus.

Vince Menzione:

You need to think about this. I have found that organizations fail because they'd had a great meeting.

I would sit at the other side of the table as the GM of Microsoft, and I would meet with all these partners.

They come to the meetings. We'd host all these big meetings with QBRs and we'd have executive briefings at all of our big events.

We'd have the PowerPoint slides, and all the great talk, and the happy talk, and the kumbaya, and everything else that goes on – the Barney Conversations – is what we’d say.

And they'd walk out of the room and then nothing would happen because they didn't apply a maniacal focus.

There were crickets.

You need to say, what are the objectives we need to drive against? How are we going to measure those objectives? What are the milestones?

And, what's the timeline to get there?

Having simple goal setting or OKRs – whatever you want to call it. It’s applying that to the business.

And measuring it. Measuring it weekly, daily, monthly, across the business, and measuring it with your partner.

Get in the room and say, what are we doing right? And have candid conversations. 

It's OK to have an aggressive undiplomatic conversation about what's working, and what's not working as long as you're respectful of each other's positions and you're moving to the same objective – that north star.

Applying that maniacal focus.

Paul Bird: 

You had also said that maniacal focus, the commitment should be on one thing.

How do you get so many stakeholders to focus on one thing? Is there a process or an exercise that you take them through?

Vince Menzione:

Yeah, you need to peel back on the one thing.

I like to call it, how do you stand out as a shiny quarter and a bucket full of shiny quarters?

What's that one thing you do better and differently than everyone else?

You might be an ISV competing with 10 other ISVs. Let’s use Microsoft as an example in their ecosystem.

What's the one thing that you do differently? Why should the sales team pay attention to you? That's part of your branding in your story.

What is that one thing? How do you stand out? What does success look like? Why should I care? What's in it for me?

What’s the ‘with them’ conversation for a sales rep who wants to engage you and your team? We need to get down to that. That's part of it.

Part of the exercise, we do with the marketing teams when we do workshops, is to come up with that.

Not so much come up with it, they know what it is intuitively, but they may not be peeling it back. I find so many times, organizations, when you look at their website, they've got all these capabilities and expertise.

It's just like, show me the one thing that you do better and differently than everyone else. I want to get there as quickly as possible.

We work on that. That's part of the branding and story part of the principles. And then, it's about delivering results. Co-selling is not always for the faint of heart. Sales organizations, sellers in general are very much independent.

Sometimes they are control freaks and they only want to do it their way. And getting to work together with another seller is not always intuitive to how people have been trained to sell in the past.

Some people know how to do it, they came from organizations that were partner-led, or partner-assisted, but you have to get there.

So how do you show up? How do you operate together as a unit to go after an opportunity?

How do you think about the opportunity holistically and know that there's not only one decision maker at the customer level, but there are several other layers?

There are five seats at the table.

There are other influencers coming into this decision process. Ensure that you've covered your bases with all of those decision-makers. That's an important part of the exercise.

The last piece is about agility. Because, as you know, things change.

Our economy changes.

Technology changes and you need to be agile. You need to understand how to pivot.

You need to understand and be intuitive enough to know that maybe you need to invest in other areas or strategies. Intuitively, I know what will get us where we need to go in terms of our objective or strategy.

So, that agility is the last component of a successful partnership.

Paul Bird: 

You mentioned something about a kind of mindset of togetherness. You hear a lot about that in coaching and development; mainly how the mindset plays the greatest role.

From your perspective, why is mindset so important when establishing and accelerating partnerships?

Vince Menzione:

It hearkens back to when I was at Microsoft – I was there during the Ballmer days, the Steve Ballmer days. And I was there during the early Satya days. And what a market difference.

During Steve Ballmer, we were competing with everyone. We were fighting 100 battles and trying to win every category.

And Satya came in, and the first thing he did was we each got a copy of a book by Carol Dweck called Mindset.

It talked about the difference between a fixed mindset and a growth mindset.

He introduced a coach, Dr. Michael Jurvey, who has been a guest on my podcast. He’ll be back pretty soon. He's a mindset expert. 

Then they changed the compensation models. No longer will you are rewarded for competing with everybody.

Every division was competing with one another for resources, for compensation.

Teams competed with one another. Individuals competed with one another, so he changed our mindset.

Fundamentally, that's how he shifted it.

I think from a mindset perspective an organization needs to think growth mindset, forward-leaning mindset, infinite mindset, like it's an infinite game.

We're not planning it to the end. And scarcity mentality versus abundance mentality also enters the conversation on mindset.

Having the right abundance mentality towards what we're trying to do. Having a partner-led mindset or a partner-assisted mindset.

Partner mindset in general.

So, that's how I think about mindset and how organizations need to think.

We're fortunate enough, being in the movement we're in right now that we're starting to see more talk about this. A couple of years ago, nobody was talking about it.

Now there are several people – thought leaders – coming out and saying, hey, we need to help the C-suite understand this.

They need to understand what partner-led or partner-assisted growth looks like. You can't do it alone. 

Mindset needs to change in an organization.

Mindsets are fixed based on where people came from, and what their past success looked like...

And we tend to gravitate to our old history and our past, as we move from organization to organization. As an example, the CRO might be used to hiring another 100 salespeople and dialing for dollars.

That was the old way of doing things.

The CFOs would say, we're just going to put money here, why would we put money towards partnerships?

And the CEO was also driving that. So, getting that mindset across the C -suite is fundamental to success.

Paul Bird: 

You've also said that companies that don't have a partner-friendly culture are dysfunctional organizations.

How do people get out of being in that way of doing things in the past, where maybe it was direct-only or not channel-friendly? How can they move over to having this kind of mindset of togetherness with their partners?

Vince Menzione:

First off, you have to recognize that there are some dysfunctions in the organization. We call them, The Four Dysfunctions.

At the bottom of this is trust. Trust needs to be embedded in everything across the organization.

And getting trust right is important to success. Organizations fail because they:

A) Don't trust their partners

B) They don't trust the process of partnering 

And C) They don't trust the organization with the responsibility for driving partner strategy

Organizations need to get that trust factor worked through. That's a super important factor.

Other areas are the mindset is also a disfunction – not having the partner mindset.

Not being deliberate enough in engagement.

Super important is communication.

Engagement, I talked about getting the seats at the table and getting everybody in the room to have those conversations.

A lot of times, we were afraid to have those conversations.

So, we signed an agreement, we have the meetings, and we get together, but intuitively, we're not trusting one another, and we're not saying what we really want to say to further the cause together.

That also becomes a factor in the dysfunctionality of partnerships.

Paul Bird: 

So, let's say there's a new VP taking over partnerships and ecosystems and is hired to build the channel. I know you've done this in the past, but it's an old-fashioned company. They're not channel-friendly.

What advice and recommendations can help them make a culture shift? Or is it even possible?

Vince Menzione:

I think you certainly have to be open-minded.

One of the things we do at Ultimate Guide to Partnering (the podcast) is we try to exhibit what success looks like.

The guests I bring to the platform generally are leaders in the partnership space.

They come from vendor organizations or hyperscalers like Microsoft, Google, and the like.

In the most recent episode, we had a channel chief who's been channel chief at three organizations where she has built very successful partnership strategies.

I think you have to look around the room and see what people are doing, and how they are driving success. What are the results they're achieving versus the results you're seeing today?

It's easy to see today that we're going through a little bump in the economy. Organizations are recognizing that it's harder. People aren't answering the phone.

Cookies are being blocked by our platforms. And so we have to find new ways to go to market and new ways to influence customers.

I have guests like Jay McBain on the podcast.

He's been a five-timer on the podcast, and we talk about the evolution of the ecosystem.

Educating people about what success could look like, bringing resources to bear to help drive that, and helping them see.

We start off with a SWOT analysis.

We want to help them understand. I'll interview the executive team; I'll interview their partners, and we come back with a readout that says: this is what your current state looks like.

This is what your strengths, your weaknesses are, your opportunities, and your threats.

It’s simple business 101, but it's a way to frame the conversation; to get them thinking anew about how they should pursue this new strategy.

Paul Bird: 

So, then, you also mention this concept of a shared vision.

As part of this shared vision as it relates to partnerships and ecosystems, what are some of the activities that a new head of channel can take to create this shared vision? So we've got something to focus on.

Vince Menzione:

Well, somebody needs to put a stake in the ground.

And generally, you hope that the new channel chief for that new ecosystem is going to do that.

You're going to need to work across your own organization to determine: What is our North Star? Where do we want to take this?

And then get agreement from, in the case of an ecosystem play, maybe there is a chief partner hyperscaler partner, like Microsoft or Google that you're aligned to. And then get alignment across your partner ecosystem; that is what we want to drive together.

People will align with that.

Certainly, vision drives a lot of things: It inspires us. It coalesces us. It helps drive our behavior in the right way.

So if we know this is the intention and this is where we want to go, it helps align both your own organization, as well as your partner organization.

And so many times, I'll come to the meeting, and we've got both sides of the table, and nobody knows what the vision is. What is the vision for this? What are we trying to do in three years' time?

We're having all these meetings. We're doing all this talk. We're trying to drive tactics, but nobody can tell me in the room or articulate the vision for success.

Paul Bird: 

What does success look like?

Do you think it is more challenging to get internal buy-in on a vision? Or buy-in from the partner network?

Vince Menzione:

It's a good question.

It depends on where the internal organization is in terms of its journey and its mindset as well as the partner ecosystem.

I think it's probably easier to get the partner ecosystem aligned than it is to get your own organization aligned if your organization suffers from a fixed mindset, doesn't have executive commitment, and hasn't thought through its vision and values it's trying to drive across.

So, you know, if you have, and if you've done all those things upfront then it's equal that both sides are driving towards the right.

Paul Bird: 

You dropped a nugget there. A beautiful one on constant and consistent communication.

So as you look at this, are there more strategies when it comes to communication that is more effective than others?

And how do you combat dysfunction of poor communication or worse, no communication?

What steps can people do to improve that?

Vince Menzione: 

Show up well.

Show up for your meetings well. This starts at the top and it works its way down to co-selling. At the leadership level, show up for every meeting with a very concise view.

I have 1 or 2 slides that I generally use as templates with my clients.

It takes them through: this is what we agree to. Maybe it's only 1, 2, or 3 objectives that we want to drive against.

These are the key results we want to achieve, and this is what success looks like.

And this the accountability– who owns it? And there's also another accountability exercise we go through.

And then, when you even get down into the field level, show up, well.

In those conversations, if I meet you, I want to understand you.

Why should I work with you? Just show up with that one slide. I know, it's a brag slide.

It's an infographic.

And it says, Paul Bird Enterprises has done X number of business with our company, has driven X number of wins.

If I work with Paul and his organization, I can achieve X results against my quota, against my scorecard.

And so, show up well at the field level, as well as you do in each of the meetings. Be very deliberate in your engagement.

Don't assume that the other side already knows.

Paul Bird: 

That's great advice.

How do you combat, or what steps can you take if you've got poor communication.? How can you fight dysfunction if you're joining an organization that has a culture of being non-communitive, or communication is like pulling teeth?

I've worked for organizations like this, so I'm curious to see what suggestions you have to get people out of that rut.

Vince Menzione:

First of all, find an organization that doesn't exhibit these traits. That’s my first suggestion.

But if you're already in one, I would coach my leadership. I would take them to the dance, so to speak, so they could see where it's working in other organizations.

I'd invite them to listen to great podcasts, like yours and mine.

I'd invite them to go to conferences where they hear from other leaders about what success looks like and what other organizations do to be successful.

So you have to work with your leadership team in order to help them be successful and see the light.

The good news is, more and more organizations are seeing the light than just a few years ago. That's a good thing for all of us in partner roles in these organizations.

Paul Bird: 

For sure.  

I'm going back. You also mentioned agility.

As a success criterion, a lot of organizations have headcount, but that doesn't always mean they're agile.

So how can a business be more agile?

Is there any low-hanging fruit that partner teams can leverage there?

Vince Menzione: 

Well, agility is very situational.

I'll give you an example of when I was at Microsoft.

We had traditionally invested in device partnerships, systems integrators, and traditional channel partners.

And then this thing called "the cloud" happened. All of a sudden, we're building these clouds.

We built a government cloud and the business I was involved in running. All of a sudden, we had to sell reason speeds. So I pivoted the business.

I pivoted the business from these other partnerships that I knew intuitively were going to work. Whether I had partner development managers or not, they were self-sustaining.

I took a bunch of resources. I moved them into a recruit motion.

And we went and recruited a whole bunch of new partners.

One market, in particular, was healthcare., That was a high-growth market. There was a lot of new innovative SaaS technology out there.

And we went aggressively and grabbed a bunch of those partners and brought them to the Microsoft Cloud – the Azure cloud.

That's one example of pivoting.

Another example of pivoting is a good friend who owns a partner business, he was a systems integrator. You know that type of business is a low-margin business.

He found a solution in a particular vertical market and recognized there were no competitors. He built a successful SaaS software company focused on the law enforcement industry.

And he pivoted his business.

It was painful because you have the revenue that's coming in today, and you're investing in your future state.

So you have to think through that whole agility pivot process to do it successfully.

And as you know, many companies have moved to the cloud, and Adobe was one of the first examples of an organization company that moved this product to subscription.

It was painful for Adobe in the beginning, and then they’ve reaped the rewards since; their stock accelerated growth over the last few years.

Pivoting is very situational, but you need to think through where the business is going.

How do I need to move my resources, my money, and my people, to drive the most optimal results for the business?

Paul Bird: 

And the risk-reward.

Because you make that pivot. You know, you talk about the SWOT analysis at the start. You decide you want to make that change and go from, I've got a guaranteed distribution path for pushing boxes out the door.

Now, I have to move this to a subscription that renews monthly or annually.

That's jumping off the cliff.

Vince Menzione:

At a fraction of the annual revenue monthly.

Paul Bird: 

Exactly.

Vince Menzione:

Getting those annual contracts paid upfront most of the time.

Paul Bird:  

Is there anything you can do as a channel leader to empower your partners?

If you’re making these changes at a business level and having this great foresight to make changes, is there any that trickles down into the partner network where you can empower them to a degree?

Vince Menzione:

Absolutely. Platforms like yours help drive some of that process.

Once you put that stake in the ground, then you need to net, you need to inform, you need to educate.

You need to drive the investments into the business in the right way to drive the right behavior, to drive the results you wish to achieve.

All of those things need to happen.

Your investment, in your resources, how you think about your partner ecosystem, educating, enabling, supporting, and rewarding.

Thinking through each of those is how you ignite your channel to be successful.

Paul Bird: 

I was listening to one of your podcasts, and there was a line that you said was absolutely beautiful around the concept of trust.

You said, trust is the oxygen within a partnership, and I couldn't agree more.

So, do you have suggestions on how organizations can be top-performing and provide trust and transparency people are looking for?

Do you have suggestions on how you can communicate or any strategies you can go through?

Vince Menzione:

You earn trust over time. You exhibit trustworthiness. Over time, by exhibiting the right behaviors, you create trust.

It's not tactical. It's more strategic.

How you exhibit it, both within your own organization and to the partner, to build it.

All the things you do with it are the right set of principles to go do that.

Without trust, oxygen is sucked out of the room. And that can happen pretty easily. Unfortunately, it happens way too often with partners.

Paul Bird: 

I actually had a podcast conversation a couple of weeks ago talking about how to lose a partner in 30 days, and that was what was behind it – the absence of trust.

Taking a deal direct. Having that shortsightedness. 

My approach has always been just transparency. I don't hide anything at all, and if people have questions, I've got answers.

That's the approach I've always taken to make sure there's clarity. It's the oxygen within a partnership. The visualization that drives. Without it, it's gone.

Vince Menzione:

You’re reminding me that as a tactical leader building a channel, you've got to over-pivot on abundance; you have to share opportunities.

You have to help the partner be successful upfront and build trust, build the relationship so that they come back again and again and again.

I think about an example when I was starting up that government sector and we had not sold to any of the military. There was this conference I went to, and I went into the room where there were these colonels; they were all talking about this one organization.

And I recognized that they were a key influencer and Systems Integrator that could drive the success of my offering. So I got the meeting with them and helped build their business.

We gave them opportunities first, and then ultimately, they brought us into the room. And we met with those colonels. And we yielded the rewards of many successful years of growth, strategy, and revenue together.

Paul Bird: 

So, The Ultimate Partnerships consultancy that you run.

Tell us a little bit more about that and how you coach an organization that has not been overly channel-friendly. Maybe, they are looking for a new mindset.

Or, maybe they have new leadership – what's the secret sauce you can share with us? The path you would like to take them on?

Vince Menzione:

It's situational, but it’s starting out with a set of principles.

There are things that we do around each of those principles to ensure they're successful.

Moving to a mastermind is allowing us the opportunity to come in the room and do a lot more upfront, and do it in a shorter period of time to accelerate success, versus me coming in the room and them following along for a period of time.

We cover mindset. We meet with the leadership team; I talk to them about what success looks like, what commitment looks like, how they need to think in their organization across each of the functional areas, and who's responsible and accountable for each of those functions.

And then, what does that strategy look like across their partner ecosystem?

Do they have an alliance strategy? What does that look like?

Do they have a channel or influencer strategy?

Do they have a tech partner strategy?

And then holistically, looking across the ecosystem approach. Then apply the principles across the organization.

Getting to branding, getting to co-selling, driving the right set of results, and showing up for those partners in the right way so that they can be successful.

Paul Bird: 

Perfect.

So, if we start to wrap things up if organizations embody your principles and avoid the dysfunctions of culture, commitment, communication, and trust – what sort of results can they expect?

Vince Menzione

Well, we hope to achieve their greatest results.

And those numbers are dependent on the organization, where they are today, and where they're going, in terms of the future.

We generally see upticks of 30-40% growth over a period of time, whether it be six months, a year, or two years of working together and achieving their top status with a tech partner like Microsoft. Or, just growing their channel and building their channel strategy across their organizations.

Paul Bird: 

So if somebody wants to learn more or they want to listen to The Ultimate Guide to Partnering, your podcast, what's the best way for them to find you?

Vince Menzione: 

So we're on all of the major platforms: Apple, Spotify, Amazon, and Google.

Ultimateguidetopartnering.com is our website.

That’ll get you to each of the podcast episodes. There's a search feature you can search through all 165 plus episodes that are out there, and you can reach out to me at vincem@ultimate-partnerships.com.

Paul Bird: 

All right, Vince. Thank you so much for being a guest on the show today. It's been a pleasure having you.

Vince Menzione:

Paul, it’s been my pleasure. Thank you. I love what you're doing. You've been driving a lot of excitement and enthusiasm through your podcast and your work. 

Podcasting is not for the faint of heart. So my applause to you for all that you put into this. It's a quality podcast.

Paul Bird: 

Perfect. Thanks so much, Vince.

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