With the complexity of today’s globalized business environment, it’s naïve to think that any one organization can be everything to everyone.
It’s quite impossible for even a large, multinational service provider to specialise in all areas or have coverage in every market or segment. Strategic partnerships provide a great opportunity for companies to augment their offerings, fill in gaps in expertise and infrastructure, and leverage technology and talent in ways that yield a whole greater than the sum of its parts.
Laying the groundwork for success
Whether the intention is a commercialised referral arrangement, a vendor/client contract, a joint venture or a possible merger or acquisition, it’s important to do your homework prior to forging a new partnership. At the most basic level, the parties involved must want to work together, and the partnership must add value and offer mutual benefit — financial, reputational, coverage, growth or otherwise.
Ideally, a partnership should address a particular pain point or solve a problem that neither organisation can effectively tackle on its own. Both the challenge in question and the solution offered by the partnership should be articulated and quantified as thoroughly as possible. For example, is it meant to be a short-term, mid-range or long-term arrangement? How can the return on investment (ROI) be measured? Neither party will be well served by overselling or underselling what they have to offer.
Much like the discovery steps undertaken as part of a standard request for proposal (RFP)/sales process, potential partners should spend ample time getting to know one another and learning about their respective organisational cultures and objectives. There really is no replacement for good, old-fashioned engagement with the right stakeholders! This process of exploration generally reveals whether the two parties are well aligned in their values, expectations and strategic ambitions. It’s also an opportunity to build trust and establish pathways to genuine collaboration.
While effective strategic partnerships offer numerous benefits, there are inherent risks involved. Relying on another organisation requires relinquishing some level of control. The partner organisation could, for instance, adhere to standards of quality or have an appetite for innovation and disruption that makes you uncomfortable; in such cases, the partnership could negatively impact your reputation. (These kinds of issues should be, but are not always, identified during the discovery process outlined above.) Support for the partnership from the target market — geographical, business sector or what have you — is key to ensuring success.
Consider the global insurance industry, for example. Many areas of the property and casualty sector have embraced the use of technologies like drones, satellites and artificial intelligence (AI) in claims adjusting, particularly during catastrophic (CAT) events. It’s now fairly common for carriers and loss adjusters/claims administrators in the space to partner with tech startups and others who are innovating in these emerging areas. Alternatively, the marine and aviation sectors rely heavily on the London markets, which tend to be more conservative and prefer well-established partners over new industry “disruptors.” Having a thorough understanding of the market your partnership would serve is critical to heading off the risks involved.
Partnerships in action
Last year, Sedgwick’s UK-based fraud investigations team embarked on a strategic partnership with Shift Technology. We invested in Shift’s AI and machine learning technology to bolster our counter-fraud solution and improve our accuracy and speed in detecting claims fraud. This space is ripe for innovation, as fraudsters are continually developing new schemes and counter-fraud solutions must be equally creative in order to keep up. Pairing Shift’s leading-edge technology with our dynamic claims systems and team of well-trained experts has proven to be a win-win; the partnership has enabled us to effectively manage a surge in fraud investigations prompted by economic uncertainty stemming from the COVID-19 pandemic and the crisis in Ukraine.
Further, Sedgwick is a service provider and strategic partner to thousands of organisations that turn to us for help in reducing their total cost of risk or enhancing a part of their claims journey. We aim to be a partner clients can trust on account of our breadth and depth of expertise, scalability and global coverage.
But perhaps more essential to our offerings are the values behind them. Placing care of people at the heart of everything we do attracts many clients to our solutions. These organisations share our caring counts philosophy and believe enough in Sedgwick to have us serve as an extension of their operations. Like any good service provider, we know that clients take on a level of risk by entrusting their programs to us — and that we must work to earn and maintain their confidence in us through our daily commitment to them.
Strategic partnerships thrive when they continue to be nurtured. Through ongoing communication, collaboration and give-and-take, parties can establish mutual accountability and develop true partnerships whose benefits far outweigh the risks.