Modern American business history is punctuated by amazing individuals who created companies that grew into icons of success through partnerships. If you have launched a new business or own a growing middle market company, powerful partnerships can help you propel profits and boost the value of your company.
Partnerships can take many forms. While some require a financial investment, many can be created by simply working with others in a mutually beneficial way. A Peterbilt truck dealership in Florida partnered with their mechanics and a local tech school to create a winning combination for everyone. The dealership had six repair bays and four over-worked journeyman mechanics each working 50 – 60 hours per week. Consequently, both the productivity and the quality of work suffered. During a meeting with the dealership owner, the mechanics proposed that they be allowed to hire apprentice mechanics from the local tech school to handle the growing workload.
The dealership owner visited the tech school and developed a partnership that would provide outstanding graduates jobs at the dealership as apprentice mechanics. The partnering solution solved the immediate manpower problem at the dealership, provided the dealership an ongoing pool of trained talent and generated an attractive pool of job opportunities for tech school graduates.
The dealership also incorporated an interesting and motivational twist to the partnership program. . Recognizing that when people have “skin in the game” they tend to operate with a greater sense of ownership and accountability, the dealership owner allowed each journeyman mechanic to hire up to four apprentice mechanics. However, each journeyman mechanic was responsible for paying their apprentices and the journeyman mechanics were accountable for quality control. This ensured work was done properly.
Another novel approach taken by the dealership was the implementation of a per-project pay rate. Each journeyman mechanic was paid based upon the “book rate” per job, which enabled them to get more work done and earn more than before. Lastly, the dealership provided the apprentices healthcare and other employment benefits not routinely provided to apprentice mechanics. The partnership produced the following results: productivity and quality of work improved dramatically and customers were pleased their repair jobs were completed faster and with very few quality issues. In addition, as the quantity and quality of repair work improved, so did the value of the dealership.
Potential investors in any industry are always looking for owners who understand the power of partnerships. A partnership can be any relationship that provides a business owner a way to: better serve customers, boost efficiencies, improve employee morale, and ultimately propel profits.
The next time you face an issue in your business, look beyond the realm of your four walls to consider the potential benefits of partnerships. Be open-minded when assessing the field of potential partners as some of the best opportunities may come from: employees, a university, college or trade school, or a local or national association. The perfect partner may also be a supplier or competitor or similar company located in another market. Powerful partnerships can propel profits and boost the value of your business.