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Ten Tips for Successful Strategic Alliances



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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 an advantage by teaming up with another organization whose products or services fit well with your own is not only seductive, it’s also critical for an increasing number of nonprofit.


Identify the Need: Conduct a strategic analysis of your operations to determine if you want to break into a new market, increase sales, develop new products/services or save on operating costs. Understand clearly where you are and where you want to go 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.


Evaluate 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 organization you’re considering an alliance with. Find out about the organization’s 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, ethics and values, and identity where potential clashes could occur. Key questions to ask:

  • How are decisions made?
  • How controlling is management of its staff?
  • At what pace do staff work?
  • How aggressive or bureaucratic is the organization?

Answering these questions honestly leads to a better match. Some organizations, 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 strategic partner.

3. Establish 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.
4. Define Roles and Responsibilities: Assess each organization’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 organization 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 the cause.

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.

5. 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 or monthly status reports.
6. 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.
7. Build on Trust: 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. Both organizations must deliver on their promises – meet deadlines, produce quality products/services and meet their financial obligations.

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.


Demonstrate Commitment: The 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.

9. Be 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.
10. Listen: 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.
Prepared by:

Geri Stengel, president of Stengel Solutions, a business strategist.  She can be reached at 212-362-3088 or E-mail

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Contact Geri Stengel at
  212.362.3088 or E-mail

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