Exit Strategy

Clause 10 – Management – Effective disengagement

Exit Strategy

Clause 9: Staying Together

Although the exit strategy is shown as the last stage in the relationship life cycle, it is a key aspect that should be addressed as part of the initial stages and carried through the whole life cycle. The exit strategy should not be confused with contract termination.

Instead it should focus on how the parties plan to disengage from a collaborative initiative and ensure business continuity and customer support.

A strong relationship will recognise the value of monitoring changes and ensure that the concerns and needs of each partner are duly addressed. It is important to ensure that while one particular initiative may come to its natural end, others may emerge from successful collaboration.

The way that the termination of an agreement is viewed both internally and by the market is crucial to the reputation of the parties. While it may be appropriate to cease activity, how this is presented and interpreted will influence the way each party pro-actively approaches disengagement.

Key Components

Develop and maintain joint exit strategy

By jointly developing and maintaining a focus on disengagement, the partners will focus on the value of the collaboration. This may seem a negative approach but organisations who maintain a realistic perspective will enjoy greater engagement and thus increased value from collaboration.

Establish boundaries for the relationship

It is important to define the boundaries of the relationship, though these may change over time by mutual agreement. This definition should include the business risks.

Monitor and evaluate changes

Regular joint reviews of both the market and the relationship will ensure it is still relevant and delivering value to the parties.

It is crucial to agree the triggers that would indicate the relationship has fulfilled its useful life.

Manage business continuity and transition

Maintaining continuity for both the partners and their customers, while also adding value, is the foundation of a sound relationship.

The termination of any collaborative initiative needs to be effectively orchestrated by the partners. This is particularly important where service provision is being transferred to another party.

Evaluate future opportunities

If the relationship has been well managed and has delivered its objectives, the way should be clear to consider future possibilities for collaboration.