Evaluating a Potential Joint Venture Partner

You need to group your questions under three very broad questions:

1. Does the partner have the skills and resources I need? It’s important to distinguish between the skills a partner possesses and what the JV needs to succeed. They may not be the same thing. You also need to make sure that your proposed partner has been reinvesting and upgrading its skills, and not just coasting.
2. Will I get access? As far as getting access, it follows that if you don’t understand each other, you won’t have access to the skills your partner has. If your managers who will be working in China, for example, don’t speak Chinese, you won’t be able to easily communicate with the Chinese managers about local market opportunities.
3. Will we be compatible? You’re going to have to “live with” your JV partner, so you want to be sure that you’ll be compatible. Visit them in their own milieu and see how they behave. Determine if their organizational climate is the same as or at least similar to your own. This will make you feel more – or less – comfortable. Solicit opinions from their other partners and suppliers. Try to work together on a small project that will allow you to get to know each other before making a big investment in a JV.

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