Book Review: The Partner Operating Model – A Guide to Predictable Ecosystem Revenue
I live and breathe channels and have been doing that for 30+ years. I would only write this article here in Trophy Club, Texas (Dallas Fort Worth area) if I had been in channel business my entire career. In the first part of my career, I was the channel partner, then evolved to leading a software company within the analytics/business intelligence/data warehousing domain where 60+ percent of the revenue came from the channel. In my current company, TELLUS International, I have opened channels for European companies in North America (including the USA), Australia, and New Zealand. My work with International Association of Microsoft Channel Partners (IAMCP) gave a global perspective of what it takes to become successful when also adding global cultural aspects to the partnership.
You should ask yourself why I am providing this background. The reason is that software vendors are strongly rising in ecosystem thinking and that indirect selling has become a key Go-To-Market factor for ISVs. What is interesting, though, is that it is nothing new how I have operated my entire career. However, many very large companies have been very focused on direct sales, and this is moving more towards co-selling and transacting through different marketplaces.
In a recent Salesforce survey of 5,500 sales leaders, 89% of salespeople are actively using partners today, and for those who are not, 58 % will soon be. What is interesting is that if that happens, 96% of revenue is partner-assisted. (Thank you, Jay McBain,for sharing the info.)
As part of my ongoing project in channel analysis and strategy, I came across a brand new book, "The Partner Operating Model—A Guide to Predictable Ecosystem Revenue," by Frie Pétré, the founder of Qollabi.
The title immediately caught my attention. Is there a new channel/partner operating model I am unaware of? I ordered the book as the only version a couple of weeks ago, which was only physical (now also as Kindle), to see how Mr. Frie defines a Partner Operating Model (POM).
The book is divided into four main parts consisting all-in-all of 14 chapters.
➡️Part 1 - Market Trends
Chapter 1 - Indirect Sales Transformation, Demystifying Ecosystems
Chapter 2 - Be prepared for the Decade of the Indirect Sales Channel
➡️Part 2 - The Partner Operating Model
Chapter 3 - Why Businesses Need to Leverage Indirect Sales
Chapter 4 - How to Succeed With Indirect Sales: Implementing A New Partner Operating Model
Chapter 5 - Trust: Create Goodwill With the Right Stakeholders
Chapter 6 - Analysis: Have Meaningful Conversations With Outcome-Driven Data
Chapter 7 - Commitment and Accountability: Predictable Mutual Success Planning
Chapter 8 - Tying Partner Objectives to Wider Company Objectives
➡️Part 3 - Roadmap For Transformation
Chapter 9 - People
Chapter 10 - Processes
Chapter 11 - Data
Chapter 12 - Technology
➡️Part 4 - Business Impact
Chapter 13 - Evidence
Chapter 14 - Transformation and Change Management
The book's first part provides a quick view of how the markets have evolved from the decade of direct sales to the decade of inbound marketing into the ecosystem and partner operating model decade. The author refers to the book "Predictable Revenue: Turn Your Business Into A Sales Machine With The $100 Million Best Practices Of Salesforce.com" as the decade of direct sales. The second decade can be represented by "Inbound Marketing: Get Found Using Google, Social Media, and Blogs" by Brian Halligan.
The first chapter includes many references to people within the ecosystem, giving the reader different perspectives. A good example is the quote from Bob Moore, CEO and co-founder of Crossbeam, in which he talks about Ecosystem-Led Growth as a Go-To-Market motion.
The author dives into the suggested Partner Operating Model and its definition in the second chapter. The book suggests that different operating models, such as Toyota Production System (TPS), Spotify's Squad Framework, Apple's Integrated Product Development, Amazon's Two-Pizza Team Model, and many others, have existed for ages. According to the author, it all boils down to People, Processes, Data, and Technology.
According to the book, "an operating model is a framework that outlines how a business functions across various areas to achieve its goals. The framework specifies how a company leverages its resources—people, processes, data, and technology—to efficiently and effectively reach these objectives."
I believe in operating models and have always said in my envision/business design workshops, "I don't care what frameworks are used, as long as they are used consistently to achieve the expected results."
I also like the "Operating Model Canvas" book by Andrew Campbell et al. as that framework is "compatible" with "Business Model Generation" and "Value Proposition Design" by Alexander Ostewalder et al. My company, TELLUS International, has used these as a reference in our workshops since 2010 with hundreds of software vendors and system integrators.
The New Partner Operating Model (POM) components are defined as TACAM: Trust, Analysis, Commitment, Accountability, and Measurement.
It is important to recognize that the framework results from the author's experiences in different industries. These experiences led the author to form the company Qollabi, which helps partner organizations connect through a collaborative platform.
I have always believed that theoretical frameworks should be able to be implemented in practice. Therefore, the reader should not view some content as marketing material. It provides context for the author's Partner Operating Model in practice. In a similar fashion, my academic work (doctoral dissertation) was based on case study research, and the framework I built can be applied in practice.
The rest of part two discusses the different TACAM steps and their inclusions, such as how partners can build predictable mutual success with OKRs and tie the objectives to wider company objectives.
Part 3 of the book explains the roadmap for transformation by walking through the reader's people, processes, data, and technology. These are well-known concepts by any management consulting firm, and their "dimension" gets ingrained into the consultant's brain. I've been there and done that. Each concept includes multiple valuable sub-chapters explaining, for example, the arrival of the Chief Partner Officer title, which has been widely discussed by organizations such as Canalys, Partnership Leaders, and many others. The technology discussion is also interesting, as is what it means to transition from traditional to modern partnerships and how to gradually build your partnerships from crawl, walk, to run stage.
Part 4 (the last part) provides evidence of the business impact. The author references well-known management consultancies such as McKinsey, Boston Consulting Group (BCG), and Deloitte to provide evidence of some of the content in the book. The author also emphasizes the essence of change management as any transformation concerning partnerships needs to be managed to have a successful outcome.
In summary, the book is a good walkthrough of how the markets have evolved from direct sales to inbound marketing and ecosystem-led sales. The timing of this book is good, as the press and technology market are full of discussions about how organizations should evolve into co-selling through partnerships and deploy their solutions to a marketplace to make the transaction painless.
I also enjoyed that the author has provided many good references to other sources (both historical and new) to allow the reader to dig into other sources for more information. That has always been my style when I wrote my two business books.
As mentioned in this article, partnerships and partnership execution is nothing new. What is new is that partnership selling has become more common and accepted based on the research and surveys presented in different sources. There is also a need to make the partnership execution more operational, whereby books like this can help an organization that wants to become more efficient in partnering to use as a resource. What comes to technology, organizations need to make the partnership transaction smooth and driven also by AI, that is where the opportunity lies in making the sellers life easy.
The book is a good resource for both beginners in partnerships and for us who have been in the channel and partnership for years, as it might bring new ideas on how to be more effective in partnering.
I would love to hear how partnerships are going with your organization and share my experiences in building channels and partnerships in North America, EMEA, Australia, and New Zealand.
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Yours,
Dr. Petri I. Salonen