Millions and millions are exchanged between companies every day. At the core of those transactions are highly competent professionals who pave the way by creating critical strategic relationships that make it possible for this to happen. These highly competent professionals are Strategic Alliance Specialists. The good ones excel at communication, sales, PR, strategy, project management, presentations and much more. Most of the really competent ones have a lot of experience and contacts to help them make connections and create relationships that lead to actual deals. I have been in the Strategic Alliances field for over 20 years now so it is safe to say I have plenty of contacts as well as experience.
Strategic Alliance Specialists have contacts they are able to use to create new relationships and critical deals for both their existing and new clients. There are many approaches towards creating a strategic alliance but there are 5 key actions to create a successful strategic alliance, which are:
- Have a strategy worked out and in place before you seek out a partnership. I have seen more potential alliances fail before they even get off the ground due to not having a clear strategy of where they want to end up and how they want to get there. Picking the right partners to help you achieve your goals can only be done once you know what your goals are and have a plan on how to achieve them. Start by finding out where you have strengths and weaknesses. Look for areas where resources are lacking or could be in the future due to market trends and shifts in supply-and-demand needs. Talk to your employees about their needs for fresh ideas and creativity. Determine which market opportunities you want to seek out and champion in the near- and far-term. Talk with your sales and marketing teams to see what customers are saying about your services, product, processes, and expertise.
- Know when to say yes and when to say no!
It is extremely important to know when to say yes and when to say no. Knowing when to say no to a potential alliance is just as important as selecting the right partner to help you achieve your goals.
- Example of a great alliance: An alliance between Seattle-based Starbucks and Purchase, N.Y.-based Pepsico created the popular coffee-flavored drink, Frappacino. The relationship moved Starbucks into the bottled-beverage market while PepsiCo gained an innovative product with a well-branded partner. Each met their strategic and operational goals. A perfect match.
- Example of a bad alliance: An alliance where one of the partners is greatly benefiting while the other is gaining little to nothing. This type of relationship is doomed for failure and won’t last long.
- Ensure you have a business plan in place that works for both partners!
An alliance will be as successful as it is vital to each partner. When creating the business plan, ensure you look at it from both angles – your company’s view and your partnering company’s view. The partnership needs to not only appear vital and essential to achieving each partners goals but it also needs to actually be vital and essential to each partners goals. Consider the following in your planning process:
- define expected outcomes from the relationship for both parties in the relationship
- define and document the elements provided by each party,
- define the benefits a successful alliance brings to each party
- identify the results that will cause the alliance to be most beneficial for your business and define the structure and operating issues that need to be addressed to achieve these results
- protect your company’s intellectual property rightsthrough legal agreements and restrictions when transferring proprietary information.
- define the basics of how you will operate
- be certain that the company culturesare compatible, and the parties can operate with an acceptable level of trust.
With this in place, you have a high chance of success!
- Know your strategic alliance partners business as if it is your business!
Companies have learned the hard way not to enter into an alliance without a detailed business plan and contract. But sound business planning is only half the battle. Dwelling on a formal plan can obscure the critical need to explore and clarify up front the nature of the partners’ working relationship—not just what they will do but how they will interact.
Within most failed alliances I have seen over the years, almost always have business planning and carefully crafted contracts in place. The breakdowns in trust, communication and the inability to resolve an inevitable succession of disagreements are usually the most common causes of failure.
- Functioning as an alliance!
Successful alliances depend on the ability of individuals on both sides to work almost as if they were employed by the same company. For this kind of collaboration to occur, team members must know how their counterparts operate: how they make decisions, how they allocate resources, how they share information. That, in turn, requires a clear understanding of each partner’s organizational structure, policies and procedures, and culture and norms. The partners should use that understanding to establish guidelines for working together.
Alliance is defined by its synergistic outcome – results must exceed the sum or the parts. This definition implies needed behavior. “For superior results you can’t simply call each other partners. You must function as partners. Alliances go beyond doing things between firms that become transactions afterwards – like licensing, co-locating resources, starting to outsource, or trading a lower price for a longer term. Such tactics may be involved in alliances; alone they produce one-time gain. In an alliance, continued joint creativity leads to regular improvement, outperforming what any single change can do.”
- Follow up and Project management.
If I had to pick one single thing that results in the majority of Strategic Alliance relationship failures, it is the lack of follow up and project management of the alliance. Initially, when an alliance is first formed, there are press releases, photo opportunities and a lot of dinners and backslapping. However, after the initial party, most people go back to their over stacked desks and in baskets and get caught up in anything and everything but the management of the strategic alliance business plan.
Follow up! Set goals, timelines and have weekly, monthly and quarterly meetings (in person, video conference or even on the phone) – the main point being: Execute the plan and follow up! Upon mutual agreement, make a commitment and implement your plan. Identify team members who will act as a point person to ensure implementation takes place as scheduled.
- Go beyond formal governance structures to encourage collaborative behavior.
Just as partners need to focus on building a strong working relationship at the start of an alliance, so they need to nurture that relationship throughout the life of the partnership. This means leaders must actively foster collaborative behavior among all the people who work on the alliance.
Dispensing with finger-pointing also helps prevent the alliance partners from defensively withholding information from each other—information, such as significant testing data, that may be important to their mutual success—for fear that it will be used as evidence of incompetence or poor performance. This does not mean that issues of accountability will never arise—only that they will be dealt with more effectively after the parties have together explored all the factors that contributed to the problem.
Finding, formulating, nurturing, strengthening and cultivating partner relationships takes time, resources, commitment, dedication, sometimes money, and most of all, a great deal of understanding, patience and trust. Therefore, before you initiate your first partner offering, think first, plan next, be strategic and always do your due diligence to make sure it’s a partner relationship worth pursuing- worthy of your dedication and care.
Strategic Alliance Specialist