by Water Street Partners
I HAVE BEEN THE CEO of Life & Specialty Ventures (LSV) since its inception in 2005 as a two-partner joint venture. As I reflect on my last ten years in the role – which included the addition of four more owners, growth into new products and geographies, shifting market dynamics, and changes in the needs of my owners – it strikes me that some things I have learned along the way might benefit others taking on the role of the joint venture CEO.
LESSON 1: BE A GOOD PARTNER TO YOUR OWNERS
In my experience, being a good partner to the JV’s owners is paramount to
success as a JV CEO. That partnership starts with a deep appreciation for
why the owners formed the venture in the first place, and an understanding
that the venture fundamentally exists to deliver specific financial and
strategic benefits to the owner companies. For example, our JV was formed
to focus on ancillary insurance products that complemented our parent
companies’ core health insurance offerings. While the owners were
ultimately looking for a financial return on the business, their initial goal
was more strategic: Improve the ancillary products business, and in so
doing, create valuable benefits, including higher penetration and retention
rates in their core health business.
I have found that having a clear strategy and value proposition for the JV to
present to the owners is a must. If I cannot succinctly explain my strategy
and reason for being, I quickly lose my Board, the owner companies, and my
own team. My Board members and owner companies want to know what the
JV is doing to make their business more successful. That will mean different
things to different owners, and to different JVs. The point here is that JV
CEOs need to know what it means and must be able to easily articulate it to
a range of audiences. (Download the full article by completing the short form to right).