Decoding Partnership Opportunities Pt. 3: Finalizing Your Strategy

By Karen Lehman May 20, 2024

In this third and final article, we hope to further de-mystify the affiliation process by providing additional information and guidelines for finalizing a partnership relationship with another organization.

In our last article on decoding partnership opportunities, we looked at the fundamentals for considering an affiliation or partnership strategy and started a list of steps to be taken. In this third and final article, we hope to further de-mystify the affiliation process by providing additional information and guidelines for finalizing a partnership relationship with another organization. While it is hard work, and daunting, it can also be an exciting opportunity to consider what is possible for your organization’s future!

The issue of using a facilitator or consultant is an important decision. When the board decides to explore an affiliation or a partnership, using a consultant or facilitator to support the process is not as important as picking your affiliation partner, but it’s close. A good facilitator will provide information, direction, insights, and guidance, but they should not steer or push you into decisions in a predetermined manner. An organization seasoned in affiliations may not require outside assistance, but the general advice is that a facilitator can be invaluable in this process. They will keep track of the timeline, ensure submissions and information are maintained confidentially, and that each potential affiliate partner is treated fairly and with respect. They should bring neutrality, support, and focus to the approach.

The letter of interest will be sent to the list of potential partners. At this step, there is an expressed desire to explore an affiliation but there is no commitment (yet). Nondisclosure and confidentiality agreements are needed before moving into the intent process. Potential partners responding to the letter of interest are now asked to respond to a letter of intent. A letter of intent will include a full description of your organization; your mission, history, assets, services, leadership, operations, financial position, etc. A list of questions is generated to seek out the most important information needed to determine if the organization has what is needed for partnership consideration. Usually, the list of questions will relate to the established criteria and will help determine the mission, vision, culture, compatibility, and other attributes of a potential partner.

Numerous tools can be used throughout an affiliation process, and at this stage in particular to rank and compare potential affiliate partners. The partner list is usually narrowed down to top candidates (based on your ranking from their letter of intent responses) who are scheduled for interviews and in-person conversations. Getting to know each other and understanding compatibility is important during this time. Organization tours can be considered; whatever it takes at this point to learn what is needed to determine the best affiliate partner.

It is at this point in the process when some of the things that you thought initially were non-negotiable are now considered with a fresh eye. Give and take, prioritization for what is most important begins to be the focus.  Maybe you have to give up some of the control that you hoped to retain to have access to the capital that is needed for the future (as an example). It is now time to select the top candidate and outline and agree to the next steps which is typically the due diligence process. Additional expertise may be needed such as an attorney and/or an accounting firm. Further commitments such as preliminary letters of agreement are signed and work begins on finalizing the affiliation process.

Communication is an important consideration. Hiring a communications expert is a best practice to ensure that all stakeholders are considered. Many organizations will communicate the intent to affiliate early in the process so that stakeholders can begin to understand the reasons for this path and support the process. Communication at key steps along the way is important to consider.  Do not underestimate the importance of communication and transparency with your stakeholders!

There is no one way to step through an affiliation process. Each organization is unique in its life cycle and needs to consider what is best for their situation. What may work in one affiliation process, may not work in another.  The most important piece of wisdom is to be in charge of your destiny. Be proactive about your organization’s future and be willing to consider all the feasible strategic options available to you.