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Strategic alliances can
be tricky. Partnerships foster mutual benefits, but the alliances exist only as long as
they are advantageous to both parties. Even so, the concept of gaining a marketplace
advantage by teaming up with another company whose products or services fit well with your
own is not only seductive, its also critical for an increasing number of businesses.
the Need: Conduct
a strategic analysis of your market sectors and target audiences
to determine which areas are the most profitable or have the
greatest potential. Understand clearly where you are so that you
can find the partners that best complement you. You need to
understand how the alliance fits into your business plan, so be
clear with yourself why you're entering into it and what you
expect to gain.
Potential Partners: Even when you get a referral from a
trusted advisor, researching a prospective partner is crucial. You
must feel comfortable with the strategies and tactics of any
company you’re considering an alliance with. Find out about the
business' key strengths, market position and – if possible –
financial status. Once you’ve narrowed the field on paper, the
detailed analysis begins. It's critical that you look objectively
at management styles, work ethics and values, and identity where
potential clashes could occur. Key questions to ask:
- How are decisions made?
- How controlling is
management of its employees?
- At what pace do
- How competitive or
aggressive is the company?
these questions honestly leads to a better match. Some companies,
for instance, are known for their tight rein on employees or the
long hours they keep; if your work style isn't similar to theirs,
you could be headed for problems. It's also smart to get
references from people who have worked with your potential
Joint Objective and Goals:
Developing key objectives and goals that reflect what both parties
expect to gain is critical. Be sure that expectations are
realistic in light of the resources both parties are willing to
put forth, and make adjustments as needed. Nothing sours an
alliance faster than the notion that one party is giving
everything while the other is getting a free ride. Strategic
alliances have to foster an environment in which both parties gain
something; otherwise, they're not partnerships.
Roles and Responsibilities: Assess each company's
strengths, and define responsibilities accordingly – especially
in the area of management. Many alliances fail because of poor
management relationships, so document clearly what's expected. Be
specific: decide how many people will be involved in the alliance
from each company and what their specific roles will be. Each
party has to dedicate resources to the relationship, and both
parties need someone within their organization who will champion
Also consider all the accounting, tax and legal ramifications of
the alliance. Form a game plan for how the alliance will operate
from the beginning to the end of the relationship
Develop a Good Communications Process: Clear communication is
key to creating an enduring partnership. Disappointments and
misunderstandings can be avoided by establishing an effective
process for working with your partner. The relationship must be
developed to the point where both parties can be honest when
evaluating progress and offering recommendations for improvement
– both of which should be done on a regular basis. For example:
you might want to exchange weekly sales reports.
Develop Conflict-Resolution Systems: An alliance is rarely a match made in heaven. Misunderstandings,
compromises and disagreements are natural. When they arise,
resolve them as quickly as possible. It's best to meet in neutral
territory where both parties can speak openly and honestly. Then,
focus on creating solutions
rather than placing blame. Be prepared for the possible break-up
of the relationship by discussing up front how you will end the
relationship, should that be necessary.
Strategic alliances are built on trust, dedication and mutual
interests. They require the respect and interaction of people in
each organization. And, like good personal relationships, they
require effort to build. Once they're in place, however, you can
count on them.
Each party has to feel that he or she is giving something and
getting something in return. If you haven't taken the time to
think through how both sides will benefit, don't pursue an
alliance at this time.
alliance needs to assume a position of status and importance; both
partners must be willing to nurture and care for it. This means
that the top people in both organizations must be supportive. The
point of any strategic alliance should be to make an impact, and
you can't do that without active engagement at the top. It also
means giving extra effort to making the venture work, even if that
means a willingness to go beyond contractual obligations.
Committed partners dedicate resources and effort and face risks to
make the venture work.
Patient: Strategic alliances take time to develop and
maintain. When you're starting out, don't make judgments about
potential partners if they seem reluctant – especially
nonprofits, which are besieged with requests. Figure out how to
stand out from the crowd.
Be all ears. Listen to your potential partners. What they
tell you will not only give you clues to their needs but may
influence your thinking in ways you've never even imagined.