To help deal with partnership stressors, I use a model to explain the dynamic of change. You can use this model in forming business partnerships as well as in your personal life. The first step is to know where you’re going.You do this by creating a vision of what the change will look like when you’ve arrived. I once asked a marketing manager to think about what would happen if he partnered with the production manager. He responded by saying: “Well, we’d talk to each other regularly, we’d problem-solve issues, and we’d work together to meet production and shipping deadlines.” After thinking about this for a minute, he got very excited and said: “I think I get it! Now all I have to do is put a plan together to accomplish these three items and I’m on my way.” “Close,” I said. Then I mentioned that it would be helpful if he included his production partner in the discussions. “Oh, yeah,” he said, “I forgot about him!” Even the best intentions can go haywire when we forget about our partner.

If we can’t control the change that’s occurring around us, at least we can recognize the stressors and develop a plan to deal with them. Knowing your stressors and how you react to change is important in helping you cope with change.When two people or two organizations come together, things are bound to be different.

Once we acknowledge the change, we begin to feel lost—like we are stumbling in the dark.We know the past is changing, but we’re not quite sure what the future looks like. This is the transition stage. During transition we spend time  reflecting on the future, think about what we want, and take action to help move us in that direction. At this point other people help ground us and give us input to gain clarity about our future and the new reality. As the new reality begins to take shape, we feel stronger.We know more about ourselves and what we want.We’re ready to take action and set new goals for ourselves.

Change is part of our daily lives. Our bodies go through a normal growth and maturity cycle as we change from children to adolescents and then to adults. As our bodies develop, we also mature both mentally and emotionally. Change doesn’t end with our bodies and minds. It is a dynamic that affects our relationships as well. And to add to the complexity, people are changing in different ways and at different rates all the time. As Heraclitus noted, there is nothing permanent except change. With all this change occurring around us, it’s helpful to remember that while you can’t always control change, you can control how you respond to it.

It is in the nature of financial institutions to have exposure to a variety of currencies. Exchange rate risk is therefore translational rather than transactional. By and large, long-term currency risk is primarily taken in the form of subsidiaries. Currency fluctuations change the value of the equity invested, hence are reflected in the balance sheet rather than in the P&L. Of the larger European banking groups, ABN Amro, BNP Paribas and Royal Bank of Scotland have substantial retail banking operations in the United States. In the insurance sector, Aegon, AXA, ING Verzekeringen and Prudential stand out in terms of US exposure.

With respect to their vulnerability against currency movements, companies from the consumer sector benefit from their broad geographic diversification.

It appears to be common policy to match assets and liabilities in the various regions to minimize overall currency risk. However, while transaction risk is accounted for, companies tend to leave translation risk unhedged. But many of the well-known European consumer companies like Nestle and Unilever have been able to raise funds in US dollars. Thus US dollar denominated debt exceeds assets and earnings. During the US dollar weakness those companies have seen their debt and interest burden diminish faster than their earnings. UK tobacco companies tend to finance a significant part of their business with Euro denominated debt, leaving them exposed to a strengthening of the Euro versus Sterling.