Strategic alliances are a growing subset of strategic initiatives. The evidence for that growth includes many advertisements for talent. For one example, the Gateway Division of Acer is recruiting for a Program Manager of Global Strategic Alliances. The program involves maximizing revenue by working with partners on a merchandising roadmap. Another example involves Kaminario’s Director of Strategic Alliances who will implement joint technology and business initiatives across multiple strategic alliances. The work will include driving new product development between the alliances and go-to-market programs.
A Strategic Alliance is a relationship between two or more parties where they collaborate to capture an opportunity or extend their reach into complementary areas. The entities maintain their independence, so the term strategic alliance does not refer to mergers and acquisitions. For example, as part of its Renew Blue strategic initiative, the retailer Best Buy has partnered with Samsung to open the Samsung Experience making it possible for shoppers to get specialized attention on Samsung products.
The life cycle of a strategic alliance involves several phases: plan the alliance, negotiate the terms, invest in the alliance, operate the alliance to realize benefits, and restructuring the alliance (includes termination). Especially for the early parts of the lifecyle we see a role for strategic initiatives and program management:
- The setup of a strategic alliance meets the tests of the definition of a strategic alliance: they span boundaries (markets, organizational structures, product lines, technologies), provide benefits to strategic stakeholders (are a pooling of risk and rewards), and transform the organization.
- Program management is a tool for aligning efforts with strategies. The 5 BARED domains are typically present: benefits realization, strategic alignment, road mapping, stakeholder engagement, and decision governance.
I have participated in many strategic alliances, both as a leader and as a consultant. Here are three tips that will increase the probability of meeting your goals.
Tip #1 – Meet in Person, Frequently
Strategic alliances are tricky because the underlying organizational cultures can be quite different, and you need to be sensitive to those differences. It should surprise no one that culture can undo the best of strategic intentions. Unlike corporate acquisitions, there is not going to be a winning culture. In my experience, there is no substitute for traveling to the alliance partner’s facilities and meeting with your counterparts. I recall well the differences that I experience when representing my employer, a NYSE-traded fast growing company that was partnering with a much larger, older, private company. Our aggressiveness was not a good fit with their conservatism, but we developed personal relationships that helped us recognize the mitigate friction.
It’s commonsense leadership: be respectful of others but open to discussing differences and be prepared to adapt to maintain harmony that supports the strategic aims.
Tip #2 – Find and Articulate Strategic Insights
Often strategic alliances come about by top-level executives who meet and say…. “It would be a good idea to get together.” The next thing you know, you’ve been tapped on the shoulder to lead this strategic initiative.
Where’s the strategic insight? Often there isn’t one readily evident. Further, few executives would want to have their judgment challenged by implying that strategic insights are missing.
While this is a cause for concern, it is not a deal breaker. My best advice is to activate your strategic thinking capabilities and encourage the same on your counterparts. I have written extensively about how to find insights and opportunities in the linked articles. Too, I have gotten good results from identifying customers and probing for value propositions. A great question is what is interesting about this?
Tip #3 – Explicitly discuss risks, risk tolerances and risk response strategies
If you’ve stayed with me to this point, you can see that strategic alliances involve a lot of complexity and potential for things to go wrong. One of the best things that you can do is to schedule a meeting where the parties can freely identify, analyze, and plan responses to risk. I call it a risk clinic, and it is best done with the help of a facilitator. You might want to consider the techniques of the “What about” list and prospective hindsight (see the links for the how-to details). You want to find out the risk tolerances of the parties: what kinds of threats are most bothersome and how much of that risk can they tolerate. For example, some organizations will never sacrifice quality to meet a launch date, while other organizations routinely de-scope in order to hit the date.
Interestingly, the discussion of risk tends to build trust in the relationship. It gets the concerns out into the open, and stimulates some creating conversation. The discussion of the four response strategies for threats also creates a sense of confidence, empowerment, and determination in the alliance team members (the four threat response strategies are avoidance, mitigation, transfer, and acceptance/contingency).
Also, the discussion of risk makes it naturally easy to build an opportunity recognition framework into the discussion.
Strategic alliances offer many opportunities for growth. They are strategic initiatives with unique complexity and issues. In addition to the three tips, what other advice do you have?
- Launching a Strategic Initiative? Here are Three Good Practices (leadingstrategicinitiatives.com)