All Articles Leadership Overcoming the challenges of starting a joint venture

Overcoming the challenges of starting a joint venture

5 min read


This is the second post on implementing a joint venture. View part one: “Checklist: The first 90 days after a joint venture announcement.”

The project director on a new joint venture needs to be prepared to engage in extensive face-to-face dialogue with executives, managers and other personnel from both parties. Once agreement or consensus is achieved, the results should be immediately documented and commitments confirmed so that there is no confusion at a later date.

Photo credit: iStockphoto

For example, if it becomes apparent that one of the parties has a large pool of engineers or other technically trained personnel with skills and experience that are ideally suited for the JV, it is important to obtain a commitment from that party to provide staffing support to the JV. This commitment includes agreement on who will be made available, when, the terms of the assignment and plans for allowing personnel to return to their parent company upon completion of certain activities.

The project director needs full and visible support from the executives of each of the parties. Executive support can be particularly useful when the project director pursues alignment of interests between the parties as well as among the functional and support units within each of the parties and the JV.

For example, if a JV is formed to conduct research and product-development activities relating to a specific technological opportunity, a concerted effort must be made to inform and engage relevant research specialists from both parties. These specialists should be informed even if they are not being assigned to the JV, with communications established between them and the researchers who will be working on the problem.

Finally, the project director needs to be provided with sufficient resources — financial and otherwise — to complete all activities in a tight timeframe. Support from specialists has already been mentioned; however, the project director should be able to access meeting rooms to conduct planning and training activities, engage outside consultants to facilitate brainstorming and problem-solving sessions, and obtain assistance to create documents, budgets and schedules.

The project director should also be able to facilitate the extensive flow of information and communication required during the first 90 days. In particular, the project director and the executives from both parties need to take advantage of multiple communications channels (i.e., print, meetings, video and e-mail) to disseminate a full and clear vision of the hopes for the new JV and how it will affect everyone involved.

A JV project director occupies an important role but must be mindful that the mission he or she is pursuing is often seen as threatening by people from both parties; planning for the JV will likely begin in an atmosphere filled with rumors, misinformation and worries.

In the ideal world, the project director would obtain full commitment and support from all quarters and gather information on “best practices” that can be transferred to the JV to reduce the learning curve. The reality is that people will be reluctant to share their knowledge with the project director and the JV until they fully understand what the JV means to them and their careers.

The JV project director may also be stymied by personality issues and the personal ambitions of executives and managers on both sides who see the JV as a threat or a path to advancement. To reduce the potential damage from these issues, the project director must have the support of top executives from both parties and their commitment of time and effort in addressing the “me” issues that can be expected to have (e.g., “will I have a job, will I be assigned to the JV, who will I report to and will my duties change?”).

The executives also need to set the stage for success in the way that they act during the negotiation process, which means avoiding unnecessary hostility and establishing a foundation for ongoing communication and cooperation that naturally flows down to everyone else.

While all the advice above is valuable, the task is clearly daunting and there is much to be done in a very short period of time. The JV project director, acting in concert with the senior executives of both parties, much identify and pursue a small set of key, measurable goals and objectives during the first 90 days. These goals and objectives, which should keep everyone tightly focused and engaged, should be announced, widely communicated and accompanied by guidance as to what everyone’s role will be in achieving them.

Alan S. Gutterman is the founder and principal of Gutterman Law & Business. He has three decades of experience as a partner and senior counsel with internationally recognized law firms counseling small and large business enterprises in the areas of general corporate and securities matters, venture capital, mergers and acquisitions, international law and transactions, strategic business alliances, technology transfers and intellectual property. His publications are available on the Thomson Reuters Legal Solutions site and additional information on his publications and activities can be found at