Unlocking International Joint Ventures

CHAPTER THREECREATE A PROCESS:BE QUICK, BE INVOLVED AND BE PRAGMATIC

‘By failing to prepare, you are preparing to fail.’

– Benjamin Franklin

The key to getting through an IJV formation (and minimizing risks of career damage) is to have a plan. Get the plan agreed early on, set meaningful and tight times (Be Quick), ensure you are present along the journey and engaged with both the process and issues (Be Involved) and set timelines that can be achieved and when issues arise, be ready to adjust (Be Pragmatic).

The plan needs to cover all the core elements of the IJV including business plan, governance model, IP protection, defining the main points of draft IJV Contract, listing other needed side agreements (such as intellectual property licenses or leases or supply contracts – all of which are frequently necessary) and mapping out the requisite approvals (both internal and governmental, if needed).

This is a lot to accomplish and what is required at the end is frequently not defined at the outset. There will also likely be a lack of alignment between the partners as to how to accomplish it all. This is why IJV negotiations often take so much longer to complete than expected, or indeed, necessary.

To show how to create an effective process, we will leverage consulting tools along with examples of poor process which led to deals falling apart. In this chapter we will work through how to build an IJV formation process, the elements to be included and how to align with the proposed ...