Unlike buying and selling real estate or even a car, forming a strategic alliance doesn't end with the signing and announcement of the contract. That's why an alarmingly high percentage of alliances "fail" over time - alliances are more like marriages: they require attention and an evolutionary approach in order to remain relevant, vital and important to both parties. Expectations, business imperatives, and people all change over time and so must the alliance.
So, how does a company improve its chances of being on the successful side of the ledger? While the real answer will depend on the parties and details involved in a specific alliance, following a few careful steps can make the difference.
- Consider what "success" and "failure" mean - both to you and to your partner. Often, an alliance will seem to be running well for one party, and horrible to the other. Take steps to understand the changing metrics that your business and your partner's business use to measure success, and adjust accordingly.
- While "Win Win" is a rather hackneyed term, targeting to follow the curve of success for both parties will increase the odds both parties are in for the long haul
- Maintain executive contact - particularly through organization changes and periods of stress. Just like a marriage :-) Required Quarterly business reviews with sponsoring Executives is essential. Make sure they happen!
- Don't be afraid to change the fundamental basis of the alliance if you see things going horribly awry. Consider alternative ways to work together, generate incremental revenue or improved market position for your company - think out of the box. For example, if you have a product licensing arrangement and your partner isn't happy with the selling relationship or profit margin, propose a well-considered alternative to increase margins and self-sufficiency. Remove the pain.
Successful alliances take work - not just at the start when the lights are on, and the stage is filled with music, but during the darkest hours when tempers are frayed and there's grumbling in the wings.
Does anyone have a story of an alliance saved from the dead by a well-considered change of course? Please tell!