All Articles Leadership Checklist: The first 90 days after a joint venture announcement

Checklist: The first 90 days after a joint venture announcement

4 min read


I recently wrote an article (login required) for Business Law Currents, a Thompson Reuters publication, that laid out the top dozen issues parties to a prospective joint venture need to consider before investing the time and resources necessary to achieve the expected benefits of collaboration.

The discussions surrounding each of those issues are important in establishing the overall goals and objectives of the JV and the framework for implementation. However, while well-drafted legal documents are useful, they obviously are not enough to assure the success of a JV.

While a JV and a merger are distinctly different strategies, they share one thing in common: the need for a clear planning and building agenda for the first 90 days following the announcement of the combination. In the merger context, this is often referred to as an “integration plan.” When a JV is on the horizon, the idea is to move it from being just an announcement to an accepted part of the day-to-day experience of personnel from both parties.

When it becomes clear an agreement is near on the outline for a JV, action should be taken to initiate quick, aggressive, yet carefully orchestrated, planning overseen by an experienced JV project director who can provide strong leadership from the beginning. The project director, ideally supported by specialists in particular areas (e.g., human resources), should be prepared to engage in different activities and deploy an array of tools and strategies.

While each of the parties to the JV will have one or more people with primary responsibility for implementation of the JV from their perspective, the JV project director should be selected by both parties and empowered to engage with all parties to facilitate the formation and organization process.

The JV project director’s experience should include a project procedure manual that lays out key required steps and provides the tools necessary to complete each of those steps. While the launch activities for a complex JV are quite extensive, experience shows that the following key dozen actions should be on every project director’s list:

  1. Embark on detailed planning of the structure of the JV, as well as the provisions that are to be included in the charter documents (i.e., shareholders’ agreement) and operational plans and policies.

  2. Conduct a full audit and assessment of the resources (i.e., technological, informational, strategic, physical and human) that are owned or controlled by both of the parties and determine their suitability and availability for the JV.

  3. Interview key players from each party to identify concerns about the proposed JV and any challenges, as well as establish processes for developing strategies to address and overcome potential problems.

  4. Establish an ongoing program to secure the commitment and ongoing engagement of key players from both of the parties at the beginning of the JV review and formation process.

  5. Identify the business and financial goals and objectives of each party with respect to the JV and incorporate alignment into the planning process.

  6. Develop a systematic and continuous program for educating each party about the strengths and resources that are available from the other party and why the other party was identified as a suitable JV partner.

  7. Carefully determine the requisite level of experience and skills needed to fill key positions within the proposed JV organizational structure.

  8. Establish a clear and mutually agreed-upon process for selecting and assigning key personnel within the proposed JV organizational structure.

  9. Develop and implement a clear and comprehensive set of personnel policies and procedures, supported by training and other methods, for establishing cultural norms and expected behavior.

  10. Design and launch a program for educating all JV personnel about the conditions, norms and expectations in the markets in which the JV will be operating, including local regulations, culture and customs.

  11. Establish a clear and mutually agreed-upon strategy for engagement of the JV with key stakeholders in its marketplace (e.g., pricing and marketing strategies for products to be manufactured and sold by the JV).

  12. Establish procedures for cooperation and coordination between the parties with respect to initiation and negotiation of strategic alliances between the JV and other parties.

Alan S. Gutterman is the founder and principal of Gutterman Law & Business, a leading provider of timely and practical legal and business information for attorneys, other professionals and executives in the form of books, online content, newsletters, programs, training and consulting services. Gutterman has three decades of experience as a partner and senior counsel with internationally recognized law firms counseling small and large business enterprises and has held senior management positions with several technology-based businesses. He can be reached via e-mail.