The Relevance of Partnerships

I have been a business executive for about 50 years. During this time, I have gained experience in establishing and developing partnerships with other companies, both here and abroad, for mutual benefit.

Here is an example of what I mean. At present I am the majority owner of a small business. Its president, a seasoned Friend, formed a partnership with one of our suppliers in which we are paying one of their employees to develop a product for them to sell back to us. In this way we save the cost of maintaining a sophisticated laboratory while benefiting from the services of a person dedicated to meeting our needs. The supplier, in turn, profits from selling it to us.

In another instance, we are partnered with a company that makes raw material for engraving. We make raw material for sublimation printing; to some extent we are competitive with this company. But instead of attempting to win the market for our product (which has newer technology with wider applications), we sell them a private label of our product, for sale in the United States only. Abroad, we have a joint venture that sells both their brand and ours through their worldwide distributor network. In this way they gain a broader product line, and our little company is suddenly a world player.

The corporate community began to appreciate the value of partnerships soon after World War II. Much of the credit for the development of these relationships belongs to Ed Deming, a business consultant, who went to Japan at a time when the label, "Made in Japan," had many negative connotations. He worked to create partnerships with workers, who were empowered to make decisions that improved both efficiency and quality, resulting in many dramatic improvements to processes and products.

In my business, we have followed the Deming approach and largely abandoned the old practice of bidding various suppliers against each other. We also try to follow the traditional Quaker testimony against taking people to court. Every contract we sign has a compulsory arbitration clause, with arbitration to be preceded by mediation, in which there is a go-between who tries to arrive at an agreement between the disputing parties. The object is to protect a useful relationship. If agreement cannot be reached, the matter goes to compulsory arbitration. The arbitrator acts as a judge and dictates a solution, which is enforceable in court. Of course we may invoke the arbitration clause if there is a contract, but when we feel that we have been abused in business, we just walk away. I have not seen two sides in a business controversy that landed in court (beyond arbitration) ever achieve a partnership later.

We have an informal relationship with a distributor who turned down an order for our product to be used in a fighter plane because, correctly, he thought we would approve of his declining such work and that it would strengthen our relationship.

Can lessons about partnerships be helpful on the diplomatic front? At this time, with terrorism so much on everyone’s mind, the United States is in dire need of partners. It needs European partners and Islamic partners. Relationships with Japan and China take on new importance. Achieving unity within our own country and with other countries should be top priorities, yet the U.S. administration seems to be making key decisions unilaterally. On the positive side, President Bush has attempted to arrive at a real partnership with Russian President Vladimir Putin, with disagreements better tolerated than one might expect given Russia’s proximity to Afghanistan and Iraq.

The bombing in Afghanistan has made it difficult for the U.S. to achieve a working relationship with that country, and it has hurt our relationship with Pakistan.

International partnerships are difficult for U.S. citizens. Many do not speak a foreign language and have not lived in a foreign country long enough to know the culture. In business I found it necessary to take much extra time to create working relationships. I found I needed to really get to know business partners and their families. I remember once worshiping in meditation with a Hindu business partner. Only to the extent that U.S. embassy staff are likewise immersed in the culture of their host countries and familiar with the local languages can they be in a position to be truly helpful. Too often, the staff are professionals from the State Department who are transferred from one country to another as promotion opportunities open up, making it impossible for them to achieve any significant understanding of how things work.

I believe the U.S. administration recognizes the importance of partnering with the Islamic states of Pakistan, Egypt, Turkey, and Saudi Arabia, among others. I applaud President George W. Bush’s initial efforts to reach out to the Islamic community in the United States, which, if pursued, could lead to a true partnership, with meaningful dialogue between the parties, rather than preaching. If one or two outspoken Muslim individuals were included at upper administrative levels, they could help to create a partnership in which there is a real sharing of ideas.

One caution: partnerships can be difficult when one party is dominant in size and wealth, as dominant partners tend to be domineering. There needs to be a willingness to listen and to make accommodation. To Friends, this translates into listening for the Divine leading. We need also to be accepting of mistakes. I like to say, "It has been a long time since either of us made a mistake . . . on purpose." Some mistakes are easily rectified. Others, such as the use of military tribunals resulting in executions, or bombing foreign populations, are permanent.

I would urge the U.S. administration to use only true diplomats in the process of strengthening partnerships, and to exercise care in the use of lawyers or military people who spend their lives dealing with confrontational situations. As Friends, we are encouraged to "speak truth to power." Voluntary mediation, followed if necessary by compulsory arbitration, should replace the use of force. It works in business. Let us try to make use of what we’ve learned over time to bring about peaceful solutions on a global as well as a personal scale.

Lee B. Thomas Jr.

Lee B. Thomas Jr., a founding member of Louisville (Ky.) Meeting, was president and CEO of Vermont American Corporation from 1962 to 1984 and chair of the board from 1984 to 1989. He is currently chair of Universal Woods, Inc., and executive in residence at Bellarmine College in Louisville. He served on the board of the Council on Economic Priorities in New York City for more than 30 years until 2000, and was chair at the time it negotiated the SA 8000 universal work place standards for global businesses in Geneva, Switzerland, in 1997. He also has served for many years on the Louisville Council on Foreign Relations.