Alliance Life Cycle

Unlike buying a house, forming and managing a strategic alliance involves a life cycle - embracing a relationship and negotiation that starts with the first conversation between potential partners.

Alliance strategy development evolves over time as we've discussed. From that strategy, identify target partners and the alliance development phase begins. The rolodex is king.

Finding a receptive partner starts the process of developing a joint value proposition. That it is joint is a distinguishing aspect of strategic alliances. Defining ways to grow the pie, so each share is larger makes for the highest probability of success for both parties. Ideally then, this discussion leads to negotiation of a business description of the deal, a term sheet, that when approved by both business negotiating teams can form the basis of the legal contract. It is during these early phases of discussion that the social contract forms, where the principal stakeholders and executives identify a shared vision, approach and the overall tone of their relationship.

With the signed contract and launch of the alliance, the real work begins to make the relationship successful, and to anticipate and solve problems. Enter sales, product development, support, training, marketing, etc, etc. A good BD leader will ensure that all stakeholders have a clear understanding of their roles in the alliance's success.

Important alliances undergo re-negotiation on a regular basis, sometimes in specific legal terms, but more often in the changes to the social and business context that occur. Regular executive review meetings during the life of the alliance can help keep things on track, change course when necessary, and measure mutual success.

At some stage before reaching the end of the term of the contract , the executive sponsors will decide if and how to adjust or extend the alliance to match corporate and market dynamics, and continue to drive success for another several years.

Move an alliance effectively through this process is critical to meeting your company's goals in forming, negotiating and managing alliances that meet your goals - whether revenue, marketing, competitive or any of the other important reasons for forming an alliance.

After a spot of R&R, I will be back next week to talk about setting goals for BD. It is no easy task for management or the BD professional that aims to meet those goals, as we shall see.

See ya,

Michael

Graphic in part courtesy of John Soper, New Paradigms Marketing, Los Gatos CA. Copyright (C) 2008-9.