There is a theory in some circles that small businesses just don’t have what it takes to compete with big business and when we are invited to the table we don’t know what to order. The American Airlines merger gives us a great example of what do look for in a partnership and what we should avoid. Here are some lessons we can take away from the merger.
Choose your partners using a strategic gauge
Now I have been on my soapbox before about small business and our lack of strategic thinking, but this merger highlights what separates us from the big boys. Small businesses tend to have a ‘fire fighting mentality’; we focus on keeping the doors open. While focusing on daily operations is part of the equation, the big boys understand that if they don’t think about what comes next in five years they will still be fighting fires. This merger will give American Airways access to new markets, expanded human capital resources and more flight capacity. The bottom line is they have increased their market presence and ability to take care of their customer. When we partner with other companies we should be seeking similar things. Before you commit, ask yourself ‘how do we help each other?’
Don’t ignore chances to grow and evolve
The one thing I have noticed in this merger is the complete dismissal of acquiring additional routes in the Asian market, considered by many a key market. Now as small businesses, we don’t often think about mergers. Our language is partnerships or strategic alliances and these relationships should be born out of opportunity. What strategic partnerships should be born out of is the possibility of creating an innovative new product, the possibility of breaking into an undiscovered market or the possibility of introducing the next big thing.
The right partnerships take time
Nothing worthwhile happens overnight and I think this is a universal truth even for businesses. While some opportunities are unexpected, there is a still a period of time to work out the details. As a business owner you should expect that there will be a courting and vetting process for a legitimate partnership. Some of those verification steps can be as simple as trial by fire, but the point is that there should be one. No one should expect another company to jump into bed with them after one meeting.
Small business owners have the advantage of flexibility and quick response. If a partnership isn’t performing or personality conflicts are preventing success, we are able to create a solution within enough time to minimize the damage. The best thing we can do is to choose partners with a strategic purpose and a process to help us exit the partnership if it doesn’t work.