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Old 09-15-2008, 05:10 PM   #1
Northboy
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Join Date: Sep 2008
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Default The Practise of Syndication

The Practise of Syndication



The Practise of Syndication




Introduction:

Since the dawn of civilization mankind has colaborated to achieve common goals.

In the past, one individual's vision may have been the focus bringing a group of the willing together in common purpose. Today, with the advent of technology and the considerations of modern society, a consensus vision is formed.

The difficulty however is that it appears we have been mezmorized into regarding modern technology as a panacea. In doing so, we have discarded the cornerstone of civilization building, we have forgotten the knowledge of how to syndicate our efforts into action.

This guide contains information on how to develop and use syndication as a business tool to build a foundation on which the concepts adopted by a group can be successfully implemented.

I hope that you find the information in this guide to be thought provoking and useful in working with others.


Graham Stanley,
November 15, 2007.




What is syndication?




Syndication is a time honoured process wherein individuals pool their resources to achieve the result of an objective.
The objective may take many forms, but in the context of this guide the objective is generally termed "mutual prosperity". Such is the case of historic references of syndications dating from ancient Greece, where the practise was used to create a merchant sea trade.

International merchant trade is one of the areas historically where we see syndication at work. There are however many domestic syndications in operation across all ranges of human endeavour.

Syndications come in all sizes for a myriad or reasons. Some are grand vision in nature, such as industry development, and some are more modest.The successful ones however follow essentially the same organizational construct and the participants operate under a code of conduct.

The primary difference in the organizational structure of syndications as opposed to individual pursuits is in the group works towards a vision of what they're trying to achieve rather than the basic pursuit of profit.




The Formula of Syndication:

Goodwill + Dialogue + Understanding + Cooperation + Trust = Trade

Participants in a successful syndication need to undestand their respective role and obligation to the group. The adoption of the above formula produces the foundation for a successful syndication.

1.Goodwill:

A spirit of reciprocity is required by the participants considering participating in a syndication. Reciprocity in business dealing establishes dialogue to work to achieve a common result.Approaching a potential syndication opportunity with the spirit of Goodwill is an essential first step.

Good purpose will greatly assist in attracting the right participants.The intent of the syndication and its activity must also follow in the spirit of reciprocity. Objectives of a one sided strategy generally do not work well in syndications.

2.Dialogue:

A transparent communication of factual and anecdotal information is necessary in the syndication process. Without the participants of the syndication being fully aware of the resources made available by its members, mistrust may take hold. Mistrust accounts for many failures in syndications.

3.Understanding:

Participants of a syndication need to develop an understanding of how the objectives of the syndication are viewed by other members. Within a syndication, the participants may have different personal goals. These should be understood and accepted by the group.

The development of a memorandum of understanding may be helpful.



4.Co-operation:

Built on the foundation of Goodwill, Dialogue and Understanding, a plan of action can be developed and implemented. Actions can take many forms, but it is in the process of "doing" that co-operation can be perfected. A successful syndication displays a great level of co-operation amongst the participants.

The development of a formal action plan with the clear division of duties and responsibilities as well as a timetable is recomended.

5. Trust:

The Trust is developed and nurtured through the equitable disbursement of the results of the syndication activity.

Without equity of disbursement of the results of the syndication, the wheel eventually collapses.

Equitable disbusement of the results should be clearly agreed upon and a sharing scehdule clearly defined.


The result of the formula is described as "Trade". This is the result of building a strong foundation within the syndication. The stronger the foundation of the syndication, the greater the level of success achieved.




Envisioned as the spokes of a wheel, if the spokes of a successful syndication are well crafted, the syndication rolls on sustainably.




Stated in another way;






Approached with Goodwill;

Dialogue leads to Understanding,

Understanding leads to Co-operation,

Co-operation leads to Trust,

Trust leads to Trade,

Thus is the Wheel of Syndication.





Getting Started:

The Issue:

Issues can take many forms. Issues can be identified as responses to economic transition or redevelopment, opportunities of the marketplace or any other legitimate reason for which a syndication should be considered. Not all issues are suitable to consider a syndication.

Syndications are most effective and beneficial where initiating a grand vision is considered the most appropriate response to an issue.

The Elements of Syndication:

In response to an Issue, an "Issue" being defined as the solution to a specific problem or a product to respond to a verifiable consumer or community need; the basic elements of syndication required to be understood are:

1. The Opportunity:

Syndications respond to real opportunities. A marketing opportunity, an industrial vision or other worthwhile purpose is necessary to commence an effective syndication process.

2. The Objective:

The objectives of the syndicate must be clearly understood by all the participants. A syndication will not be successful if the objectives are not clearly understood as confusion will lead to misunderstanding.

3. The Method:

The method to be employed to achieve the objective must also be understood by all the participants and all the participants must be in agreement. If not, then the syndication may need different participants.

4. The Process:

The process to be employed by individual participants may vary as long as the process employed does not contravene the Code of Conduct agreed to by the syndication group. Individual syndication members may have differring ideological views or varying methods in how they approach day to day operations of their respective enterprises, but in terms of activities within the syndication, the Code of Conduct specified for the syndication must be adhered to. Without this level of discipline the foundation of the syndication may be jeopardized.

5.The Measure:

Measurement of the success of the syndication in relation to operating results must be accurate and timely. This maintains the level of trust within the syndication and is vital information on which the participants can make adjustments to operating performance. In syndications group participation is the key.

6.The Result:

The result is measured against the objectives of the syndication; ie. did the syndication meet the objectives envisioned in a practical sense. Results are always viewed as an analysis of the success achieved against the objectives of the syndication.

7.The Exit:

A good syndication has a well defined exit strategy defined by a future event.

A structured timetable in terms of a formal schedule may be helpful in some syndications, but is not ordinarily required.



Events:


Events can come in many forms, but they always relate to the primary purpose of the syndication. syndicated enterprise public at the correct time in the future or the completion of an order for a number of components that a syndicated group obtained a contract to deliver.

Should the participants wish to continue their activities, a new syndication can then be formed using the process illustrated above.



Assistance in organizing a Syndication:




The Role of the Trust Merchant:

A Trust Merchant is a term used to describe an individual or organization that nurtures the formation of a syndication. Many mistake Venture Capitalists and others as Trust Merchants, however while they may be active participants within a given syndication, they do not fill the role of the Trust Merchant.
A Trust Merchant can be easily identified as the individual or organization that provides the trust component of the Wheel of Syndication. Their primary concern is maintaining the balance of equitable treatment of the participants within the structure of a given syndication.

With a Trust Merchant as a guide, the participants enter into the process of syndication with a degree of confidence not achievable otherwise.Trust Merchants are active in economic development, ethical investment initiatives and many industry organizations.

Trust Merchants may be a participant in a given syndication, but this does not always have to be the case.

Last edited by Northboy; 09-15-2008 at 05:13 PM.
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