In business, we come across opportunities to partner with another individual or company. There’s always a number of steps we all go through leading up to a formal legal agreement or memorandum of understanding (MOU). In all cases, we’ve had several fruitful discussions, the more detailed under non-disclosure (NDA). At this point, we have determined that we are compatible in our thinking and that our capabilities are complementary. But the problem really is how to go about defining the business relationship, which is really about how the relationship might work. And we do not want to start the formal legal process to encapsulate the business relationship without first knowing how we both see this working out.
One of the most useful tools we have used, in both large corporations and small businesses, is the ‘THEY-WE’ matrix. It is a single piece of paper, that each party completes independently.
‘WE’ (our business) fills out what we expect ‘THEY’ (the proposed business partner) to provide to the relationship (the ‘Get’). This can be marketing, sales, technical, design, manuals, etc. capabilities. ‘WE’ fill out what ‘THEY’ can expect to get from our business in return (the ‘Give’).
Likewise, ‘THEY’ (our proposed business partner) fills out what they expect ‘WE’ (our business) to provide to the relationship. Again, this can be marketing, sales, technical, design, manuals, etc. capabilities. ‘THEY’ fill out what ‘WE’ can expect to get from their business in return.
Once both parties have completed their single sheet of paper, they exchange their versions. It at this point we see whether our discussions and our intentions are in line with each other. You either start the formalization by an agreement or decide to end the discussions. We usually find that the list are combined and negotiated until both are satisfied. This then provides the basis for the legal agreement or MOU.
We have found this is one of the fastest ways to get pass that defining the business relationship step.