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EY’s Vice Chair Emeritus Joins Ultimate Guide to Partnering®
In this episode, Greg Sarafin delves into the imperative of the ecosystem, the pivotal role of chief partner officers, career progression in consulting, and the dynamics of organizational leadership.
Discover how Greg oversaw EY’s Alliance Partner Ecosystem, driving substantial growth and impact, with a staggering 40% contribution to EY’s growth over the past six years, surpassing $10B in revenue. With insights from his extensive experience, including leadership roles at IBM and BearingPoint, Greg shares invaluable perspectives on strategic partnerships, technology implementation, and leadership skills essential for C-suite roles.
Learn firsthand about the intersection of technology, business, and partnerships as Greg discusses the tech industry’s influence on GDP growth, AI value creation, and business process reengineering. Gain actionable insights into partner operations, cost management, and the profound impact of partnering functions on organizational success.
Tune in to uncover the secrets of effective partnering, leadership, and capital allocation in today’s rapidly evolving business landscape. Don’t miss this enlightening conversation with Greg Sarafin, a seasoned leader with a wealth of experience in driving impactful partnerships and organizational growth.
What You’ll Learn From This Episode
0:00 – The Decade of Ecosystem and Partnering Efficiency
2:16 – Industry-Specific Partnering Models
5:08 – The Role of Chief Partner Officers
14:24 – Challenges and Benefits of Partnering
14:58 – Elevating Partnering to a Core Competency
20:36 – The Future of Partnering
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Transcript
Keywords:
Vince Menzione 0:39
flywheel success is where you will build momentum, and that momentum will continue, and then you feed into the other systems to say, this is what we did. This is how we did it together.
Vince Menzione 0:50
So Greg, you’ve been a thought leader in this ecosystem movement as we refer to it now, like, why is it a strategic imperative? And what would you say to other SIS or other organizations similar to EY, analogous to EY, what they need to go do better differently? Soa
Greg Sarafin 1:12
I’m gonna take it up from the world of tech and SI, because I believe this movement is much bigger than that. I know that because there’s a natural affinity for tech and consultancies to partner for four decades now, if you think about it, and that Bill Gates moment, right, exactly, and so. And the reason for that is that clients, if they just adopt technology and they don’t get business value, or value realization, I think, is the word we typically use, right? What was the point of spending the money on technology so you, you, you hire the consultants to a make sure you don’t screw up the implementation, because that’s easy enough to do, and never happens.
Greg Sarafin 1:40
It’s never happens and then, but more importantly, hopefully, you then adopt it and use it for a business purpose that returns shareholder value, client value, employee value, stakeholder value, right? You want value creation from having deployed capital and OpEx to put in this deck, and so there’s been a natural synergy. But there are partnering models all over. Like every industry has its version of partnering models. They’re just very different by industry, right? If you look at consumer products, they do a lot of partnering, they do a lot of cross licensing, they do co branding, right? They do supply chain sharing, right?
Greg Sarafin 2:03
They do a lot of things that are partnering models that are value creative to their end customers, but don’t look like the way that we partner between sis and tech companies. Automotive, automotive, automotive, massive partner, massive partner, dealers, technology, exactly. Now you’re getting play in my, in my that’s another partnership. You have bow stereo, you have Brembo brakes, you have roqueros C you have BorgWarner transmission, right? Those are all. Those were all supply relationships that turned into value relationships, and even co brand relationships in some cases, right?
Greg Sarafin 2:40
So let’s take it up a level. The reason it’s the decade of ecosystem is because partnering is more capitally efficient in many value vectors. The path to getting to a particular outcome for a client. If you try to do it within the four walls of your company, you probably don’t have enough capital or time to get there. You are speaking my language, so you need to combine your capital. And when I say capital, I mean it broadly. I don’t just mean money, resources, resources, IP, access to customers, access to supply. How big is that today? That’s huge. Route to supply is one of the most highly valued data is another highly valuable one, especially with AI, right? So to me, the reason it is the decade of ecosystem isn’t because what we’re doing in our little world of SI and tech. It is because Tech has taken down the barrier to interoperability between companies. I love that.
Greg Sarafin 3:13
And AI takes it down even further you can in cloud. And you again, you come from a very famous cloud company, right? How much value did Microsoft Cloud unlock not because people move their workload from a data center to the cloud. It turns out that might actually be more expensive. The value on lock is when multiple companies can form these really valuable value propositions for no cost of interrupting the marketplace is driving it even further. The Marketplace creates an accelerant, seamless so to me, the biggest thing that Microsoft is doing economically and its peers is it’s unlocking the ability for companies to pull capital together and new value creation models, and that is why. It is the decade of ecosystem because and you’re going to see this in every industry. We already are seeing in every industry.
Greg Sarafin 3:50
And here’s the good news. And I dropped the mic now, if you are listening to this, and you are, and you’re like me and Vince and others who have been banging our heads against the wall, hey, flat spot, right here. Right it? You know all your inner direct sales, etc, all of a sudden you’re you’re entering a decade where your worth to pharma companies and and energy companies and automotive, you’re there. They need you, yes, because they need to try to figure out how to do this, because they don’t have what we have, which is experience doing partner operations, partner governance, partner relationship handling and go to market motions. Absolutely, they don’t have any of that experience or, no, they don’t know. And the people listening to this do. And I’m telling you, more than half of you in 10 years will not be in tech. We’re GSI, right.
Vince Menzione 5:58
We’re gonna help the transformation of the rest of the world, right? Yeah, I see that as well. I talked to and that is why, yesterday, about this very same topic,
Vince Menzione 6:11
we’re excited to announce ultimate partner live executive summit October, 22 and 23rd in Las Colinas, Texas. We’re bringing back the event that we hosted last year, but in a new facility with state of the art capabilities and live streaming. This is your opportunity to engage with other technology leaders, to learn the what, why and how to achieve your greatest results, partnering with Microsoft and other tech giants, featuring leadership tracks, fireside chats and workshops designed to help you achieve more. The doors are opening next week for Early Bird registration. So let’s dive in here. The talk that you gave at my event was around the CPO, which were the chief partner officer, new term, by the way, although I think you’ve been espousing the benefits and the value of this, I think about your organization, I love the talk you gave. And I also think having been on both sides, having been at the Microsoft and then in the billion dollar ISV, where these things don’t necessarily happen as easily. What do you think about when you think about the chief partner officer, role, its value and where it needs to sit in an organization? Yeah,
Greg Sarafin 7:28
so I actually flip it on its side. So I believe that for companies to pull, allocate capital, create new value vectors and then drive go to market at scale, they need to have a partnering function. Yes, you’re speaking my language. You don’t have a partnering function. You’re not doing that function. Not just a bolt on, thank you. A function not just a bolt on. And at many companies, it’s a bolt on, as you know many and it’s actually a go to market bolt on, that’s it’s not a value creation bolt on based on where it sits
Vince Menzione 8:05
in the organization, right?
Greg Sarafin 8:06
So you need a function, and that function, just like the finance function or the tax function or the HR function, the supply chain function, it’s an L zero function of the company, and it is a steward of a set of business processes. Yes,
Vince Menzione 8:26
it’s a steward of the processes. Say that processes from Hell, yes, take us through them.
Greg Sarafin 8:32
So first of all, as you know, partnering touches every internal, every other internal function of the company. That’s right. It can alter rev, rec, it can alter your tax position. It can alter your capital position for the for the better. Hopefully, it changes how you think about marketing and branding. Right now, you’re co branding, multi branding, what is that? Yeah, right. So, so
Vince Menzione 9:02
far, you’ve touched the CFOs office and the CMOS office.
Greg Sarafin 9:05
Oh, by the way, if you’re partnering, you’re creating interoperability. Now you’ve created a nightmare for the CIO, because the CIO now has got to work a very about cybersecurity, yeah, through all these other threat factors, that’s right, right? You’re no longer it’s no longer the it within your organization. It’s the it across your organization, and the partners that you’re working with, like and I could go on every trust me, we’ve done this, every ro function we didn’t get revenue. Your go to market complete and your product function, yes. Are you engineering a product to be complete? Are you engineering a product to be the digital core? Now I’m back to tech, right? Yes. Are you? Are you? Are you engineering your product to be the digital core, and then your your partner ecosystem does the last mile around it. Because as that core gets bigger, you know that it goes by the square of the radius, right? So your cost of making that too big, you can, you don’t have the capital, right? So you can only take that core as. Are you want the minimum liable core, and then you want your partner ecosystem to fill in the last mile around it. That is your ideal scenario. So your product strategy has got to be informed by your partner and go to market strategy. The point is, there are places you can go today, and you know what it allows. You’re an expert in these processes, right? So you’ve got these processes that are intra company processes that affect every other function of the company. Yes, but then you have the intercompany processes from hell. We talked about this before the cast, right? Your old company and my company are to the largest, most complicated beasts in the world. And, you know, let’s say Judson and a Andy go. Hey guys, we want to do this thing, and energy, and, you know, like, and it takes them 30 seconds, you know, stroke of the pan, we’re gonna go do this. And then it gets then who’s to get handed to you? It gets handed the partner organizations for us to then try to figure out, Oh, my God, there’s, there’s 12 corporate functions, or, you know, there’s 12 entities within Microsoft, and 32 with an EY, and then, like, and who, oh, my lord, you need a calculator to figure it out sometimes. Yeah, right, so I joke a little bit, but you know just how hard that is do.
Vince Menzione 11:14
And I call it maniacal focus, right? You get from the Kumbaya, you get from the vision, oh, yeah, like that trickle down to the OKRs, and then you got to get into execution, yeah, and the
Greg Sarafin 11:23
execution this, that’s a lot, right? Which is why you only do big motions. Yes, you do that, right? Because, right? Because the cost of sales is, is too high otherwise, right? And that’s one thing I’ll spend the organization in multiple directions simultaneously. You get, you know, my rule is, you with any partner, what are the five motions that matter that are gonna get you to 80% of your value creation revenue? And just focus on those, because each motion has a hurdle cost, yes, a very large hurdle cost, and so you can’t spin up 20 of them.
Vince Menzione 11:54
So what is your guidance to other organizations? This is a this, by the way, this is considered a new role, right? There are. It’s, you’re saying it’s, it’s the at the top level, the L zero level,
Greg Sarafin 12:05
yeah. And it’s considered a, it’s, like you say, every company has some form of partnering today, but it lives in it’s a bolt onto a different bolt on there’s a channel chief, there’s an alliances leader. There’s multiple alliances, strategic supply chain lead. In the case of automotive, there might be a marketing function that is business development and energy, yeah, a lot of its JVs, yes, yes. So, and then there’s some, there’s some businesses that are, I call, you know, partner, partner native, like Airbnb and Uber and all those folks, right, that just are built in the cloud. They’re orchestrators, they’re value orchestrators, and they bring together a bunch of participants to trade and receive value for which they take their piece. Yes, so And do they have partnering functions? I don’t, I don’t, I don’t know. Or are they just partnering entities? Yeah, I think
Vince Menzione 12:55
they’re just partnering, partnering. They’re almost like mark their marketplaces in many respects.
Greg Sarafin 12:59
Yeah, those, I would agree with those are market I look at Microsoft or Amazon’s
Vince Menzione 13:03
marketplace or Google’s marketplace right now, I’d say it’s more analogous to that. I would agree.
Vince Menzione 13:08
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Greg Sarafin 14:03
partnering is just at every company. It’s just small p partnering. It’s not big P partnering, right? It’s not an L zero function. And you’re not allowing all the different types of partnering mechanisms if you just keep small p partnering, and you’re never going to be able to scale it. If you’re small p partnering, if you really want to scale, you’re going to have to you’re going to have to raise it to an L zero function, and then L zero functions have an officer that are accountable to the board and the CEO for the efficacious execution of that function and contribution to key KPIs of the company.
Vince Menzione 14:41
And how do you get there? Like, what is that function? What does that function look like? And what
Greg Sarafin 14:45
are the attributes of that function? So that function has a number of layers to it. So there is a governance layer, and the governance is in part, a governance into the capital allocation process. Yeah. So, how are we allocating our capital? And let’s not think about capital allocation as just deploying our resources. I call it. I have this saying, I use, I say, you know, companies need to make a pivot from the the economics of scarcity, the economics of abundance. Yeah, mindset. It is a mindset. It’s very much a mindset. And that mindset can have, it can be night and day. Yes, the the impact of which side of that mindset you fall on. Because if you’re in the economics of scarcity, it’s like me, me, me, my here’s my capital, my people, my resources. I’m going to deploy them as effectively as I can to out muscle my competition. That’s right, that’s the old mindset. That’s the old mindset, yeah, right. Whereas the new mindset is, I have asset value and asset classes, I have all these other entities out there who I can work with, who also has asset value and asset classes, and I’ve got customers out here who have permission to help on a particular to a particular outcome, that’s right. Jeff Bezos understood that better than anybody. Didn’t they did. He did, right? And Satya Nadella and Satya Nadella two of the two of the great towers of CEOs in history, right? So they understood that. And so both of those companies are masters at delivering the outcomes that we want, either in our personal lives or professional lives or both. And not just saying what, what are, what of my assets am I going to deploy? How am I going to orchestrate a lot of different assets to get you to that outcome, yes. So right away, you have to govern decisions about capital allocation, about who you partner with and don’t partner with, because here’s another one for you. More is not more, no and channel, even in channel, right? More is dilution. Yeah, less is more. That’s right, who are your strategics? There should be very few of those. And then who are your specifics, the ones that you’re partnering with, because they have a very specific thing. It’s not strategic as a relationship overall, but you still need that asset class, and they’re the most logical provider of that asset class as companies realize, Oh, my God, I need to have an abundance economics mindset, and I need to be able to think about capital allocation and value creation broader than just what I have within my four walls. They will realize, maybe some faster than others, that this is no longer a bolt on, as you said earlier, this is a core competency of the enterprise, from decision making all the way down to execution. And I think you’re seeing the secular trend now. There are, there are more chief partner officers named every day. True.
Vince Menzione 18:00
I just want to make sure that that is where it needs to sit, or is it just entitled only? That’s the
Greg Sarafin 18:05
other piece I’d like. So many chief partner officers are actually chief channel officers, or they are Chief Business Development Officers, or they are whatever they are, right? They are not actually running an L zero function of the company. They are not in the C suite discussions. Um, and again, I think it will get there, and I think economics will drive it there. Yeah, it’s just, can we help ourselves by elevating this conversation, right, and, and, and frankly, also elevating the understanding of what a partner function does, because it is the of all the fun like now, if you ask the average person, they actually understand the difference between fpna and, you know, basic accounting. No, they probably don’t know right or indirect tax from direct. No, they don’t. Yeah, for some reason, partnering doesn’t get that break. It’s like we don’t know what you do. We don’t trust you. Why are you spending all that money? Where’s it going? Right?
Vince Menzione 19:10
The least understood function is terrible.
Greg Sarafin 19:12
It’s just I feel sorry for everybody listening right now, I feel sorry for myself. No, actually, I don’t feel sorry for myself. Because,
Vince Menzione 19:19
well, how did you get how did you get from point A to point B? Maybe that helps you. And you
Greg Sarafin 19:23
know what form it starts with measurement. Yeah. I realized very early on that, yeah, well, we all know people are belief driven, and so if I’m, if I’m in a system of belief that says we shouldn’t be partnering. We can’t partner. Partnering doesn’t matter. And if we do partner, it’s too expensive. We’re not getting the value right. All those negative things, and we’re all familiar with those sorts of attitudes at our companies. So the first thing you need to do is say, Okay, this is why we partner. You. We don’t partner because we’re trying to make money from Microsoft, right? One even partner because we’re trying to make more money for ourselves. Necessarily, we’re partnering so we’re relevant to our clients. So you start there, right? You keep going. Guys, look at the market. Look at the secular trends in the market. This is happening. Look at the most valuable companies on the planet, and then go down a layer and say, Why are they most valuable? Why is Microsoft the most valuable company on the planet? Because it unlocks capital value creation.
Vince Menzione 20:32
Growth Mindset.
Greg Sarafin 20:34
Growth Mindset.
Vince Menzione 20:36
Thanks for listening to this episode of ultimate guide to partnering. Hopefully this episode and all the episodes we’ve recorded are helping you better align your partner strategy to achieve your greatest results. So I want to ask you something, have you implemented everything you’ve been learning, and are you now achieving the growth and revenue objectives that you hope to achieve? If not, it’s time to take action now join ultimate partner experience. We’re building the community I’ve always dreamed about with UPX. You get access to exclusive Industry Insights, unparalleled networking opportunities, tons of educational resources and support from a community that shares your goals. Join us now. Visit our website, the ultimate partner.com and sign up today. You.