The elephant in the room

“Attempting to negotiate exit processes following termination, perhaps in acrimonious circumstances, is unlikely to be productive or to result in a favourable outcome for either party.”  Astra-Zeneca v IBM, 2011, High Court of England and Wales, 306

 You’re both on a high because you’ve just agreed a great deal. It might seem like a ‘wet blanket’ but now is the time to talk about how it will all end. The reason for exit might be project completion or one of you might walk away or, the world might change or, for some reason one partner cannot deliver. Often the alliance just falls apart and in the worst case it ends up in court at vast cost in money and reputation. In our ideal world, the Relationship Managers ask ‘What If’ and start planning Exit from the very earliest discussions between the potential partners.

 “The CEOs stated that they deliberately did not address exit strategies because “this cannot fail”. It did fail, both parties shared a loss of $7bn and, it took years to untangle the mess.” Concert Joint Venture, 2001

 The Exit Plan is a strategic document with ‘tentacles’ reaching into every aspect of the management of the joint enterprise. So, what should it look like?

- possible exit scenarios

- dispersal of shared assets such as skills, materials and infrastructure

- impact on the upstream and downstream supply chain and end-customers

- arrangements for divvying up the Intellectual Property Rights

- details of Exit project management and resourcing

The RMs will need to keep the Exit Plan under constant review during the life of the collaboration. In particular they must have their fingers on the pulse looking for signs of risks and threats and warning their Boards in a timely fashion. Should the Boards decide it is time to ‘can’ the project, the RMs will swing into action and gather a team to create a detailed project plan for the Exit. Once approved and resourced they will manage it through to completion. The overall aims are to minimise disruption to all concerned and to wind up the business in such a way that it leaves the door open to future opportunities. A good Exit Plan will enhance the resilience of your relationship.

Have you got an Exit plan? If not why not?

For a complete Exit Plan guide see our recent book