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STRATEGY

Cirque du Soleil and MGM Mirage: A Lesson in Strategic Partnership
 

Naturally, when you seek to grow, you plan new products or marketing campaigns. Why not consider other companies who could help?

Where does Cirque du Soleil's constant flow of creativity come from? It's thanks, in large part, to a companywide policy that asks employees to look for inspiration everywhere.

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Cirque du Soleil is now a brand with global recognition. But it wasn't always. Having started as a Canadian troupe of street gymnasts, the business started without much in the way of funding or visibility. That it has grown to be so well-known and well-loved is, of course, because of its brilliant originality. But none of that might have thrived without another gift: partnership.

Critical to Cirque's growth and reputation was a deal struck with MGM Mirage, in which the hotel group invested in the buildings and the production the circus needed to grow. The hotels got unique entertainment, increased footfall, and expenditure by customers who were not their guests. The circus got staging of a kind it could not have afforded but which provided settings that spectacularly showed off it creativity and ingenuity. It was a brilliant partnership. But what really made it successful?

1. Mutual Respect

Cirque insisted on--and got--total artistic freedom. This wasn't always easy. Some of the shows looked more risqué than the hotel had imagined. But the hoteliers stuck to their business, and the gymnasts to theirs.

2. Lead Time

Nearly eight years passed between Cirque doing one show for MGM Mirage and the creation of a joint venture. During that time both organizations came to know and trust one another. By the time they sat down to do a deal, each knew--and appreciated--what the other had to offer.

3. Balanced Contributions

MGM Mirage gave 10 times as much cash as the circus. But MGM had more cash and knew it stood to make more, in the form of increased dinners and drinks, if it worked with Cirque. In great partnerships, each party plays to its unique skills and attributes. In this case, the hotel had cash and the circus had entertaining ideas.

Successful strategic partnerships always strike me as being a great deal like marriage. The two companies go on a lot of dates and vacations together. By the time they seal the knot, they know each other well, and appreciate each other's differences. They also, often, have good pre-nups in place: a clear path for resolving disputes.

But when I meet owners or teach business school students, I find they rarely consider strategic partnerships as a path to growth. They naturally think of marketing, and great products--but not the other companies that could help them expand. I think this is because the dominant mental model for business success is the heroic soloist: the rugged individual who takes on the world and wins. But this is, of course, romantic nonsense.

No one succeeds in business alone. The ones who thrive recognize what they have to offer, what they need, and who can help.

IMAGE: Flickr/Focka
Last updated: Jan 29, 2013

MARGARET HEFFERNAN is an entrepreneur and author. She has been chief executive of InfoMation Corporation, ZineZone Corporation, and iCAST Corporation. In 2014, she published her fourth book A Bigger Prize: How We Can Do Better than the Competition.
@M_Heffernan




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