How to get Great Results from Partnering
Winning with alliances How would you like to grow your revenues? Or, perhaps you need to reduce costs, share risks, or access resources you don’t have internally?
Like many large and small organisations, you may have considered partnering and alliances as a way of building value. Organisations are under increasing pressure to do more with less so growth from within may not be an option and mergers AND acquisitions continually fail to return shareholder value.
Against this background alliances hold great promise and done well can deliver great returns. Consider global organisations like Cisco, which has grown into the leader in its field with a business model that is dependent on alliances. Some SMEs stand out with their alliance activity too. Brightwell Dispensers, an SME from Newhaven is also reliant on partners for its success. Brightwell is the leading independent dispensing solutions provider in its field, and as a result works with global client partners like Proctor & Gamble as well as a host of other SMEs in designing and delivering its services. Despite being in different industries, vastly different sizes, and with different goals and objectives these organisations share some common factors in the way they go about their alliance activity. These are the critical success factors (CSFs) for winning with alliances.
Before we find out more about the Critical Success Factors however, let’s consider the consequences of failure. Many promises are made when creating alliances, yet up to 70% of alliances fail, and with an increasing focus upon corporate governance the consequences of failure are becoming more painful. Examples of alliance failure include the 2005 flights fiasco for British Airways after its fallout with catering partner Gate Gourmet. This allegedly cost the airline £35 million in lost revenues, but probably much more in reputation costs and loss of future earnings. Clients are getting smarter and they want to see depth to partnering arrangements, looking beyond smiling sales forces. Given the increasing competition for alliances and the growing consequences of failure, prospective partners need to stand out from the crowd with a positive reputation and results from their alliances; what we describe as ALLIANCE BRAND.
SMEs generally don’t have deep pockets and also can’t afford the financial and reputational risks of failure so you need to place your bets very carefully when it comes to alliances. Let’s consider the three Critical Success Factors and understand how you can win with alliances and create value for you, your partners and other stakeholders.
Whilst all of this is common sense it is not common execution. There are three CSFs:
1. Having a capability to partner yourself
2. Having the right partners
3. Having effective relationship architectures with each partner
Many organisations rush to find partners before considering the implications of their actions and fail to take the time to understand their own and other stakeholders’ needs. Having a capability to partner (CSF1) is the first step and achieved by following each of the points of the ALLIANTIST VIP Map©.
Each of these is addressed in depth in my forthcoming book- ALLIANCE BRAND: Fulfilling the Promise of Partnering, but it is worth bringing out two points in particular here. Alliances are all about accessing someone else’s assets. Therefore to stand out from the crowd of SMEs, especially in aiming to work with large organisations, the attractiveness of your assets is the basis of your offering to your prospective partner.
Assets take three broad forms, physical (eg products, capital, property, customers), identity related (eg reputation, brand or alliance brand) and intellectual (eg specialist knowledge, confidential information, innovative processes). Quite simply, if your assets are more attractive than others, you have a better chance of realising greater rewards. Packaging these assets into compelling value propositions is therefore essential. Brightwell punches way above its weight in negotiations with clients, suppliers and partners because it has attractive physical and intellectual assets that help it stand out from the crowd. It also has a hard earned reputation for delivering on its promises.
Collaboration is a massive issue: if an organisation cannot collaborate internally it has no chance of collaborating externally. This can be a challenge in an SME but imagine the complexity surrounding a large global organisation where people and politics, as well as ambiguity over decision making and accountability, are regular aspects stifling progress. Factors affecting collaboration include leadership and culture, organisation purpose, values and beliefs, structure and control as well as its systems and technology. Teams and individuals themselves have many issues and these include personal motivations, measurement and reward strategies, roles and responsibilities and various corporate policies affecting performance. It’s important that you consider all these issues, both from an internal perspective – as they relate to you and your company, as well as to potential alliance partners.
Having achieved CSF1, the organisation is well placed to find the right partners CSF2. ALLIANCE BRAND offers up a suite of maps and tools to help this process, not least TOPSCORER Map© which helps identify the ideal partner characteristics. TOPSCORER stands for Technical, Operational, Portfolio, Strategic, Commercial, Outside pressures, Relationship, Environment and Regulatory.
Having found the right partners CSF3 is about building effective relationship architectures underpinning the alliance, to help it to succeed, and to mitigate against the effects of failure. One size does not fit all here and the best fit architecture will be based on the alliance value and importance, the strength and maturity of the relationship between the parties, and their ability to execute on the promises.
Mark Darby is Founder & Principal of ALLIANTIST, an Enterprise Hub portfolio client affiliated with the Eastbourne Hub.
ALLIANTIST is an alliance solutions provider that enables organisations to get measurable benefits from their partnering and alliance activity.
Prior to ALLIANTIST Mark led the UK extended enterprise consulting activity for Deloitte, and before that designed and built Reuters first global alliance programme. He was also instrumental at The Rank Group over eight years with its alliances, strategic sourcing and supplier relationship management activity.
Mark is the author of ALLIANCE BRAND: Fulfilling the Promise of Partnering, the book that demonstrates how to get a positive reputation and results from alliances. It is published by John Wiley and Sons.
ALLIANCE BRAND is the book that enables organisations to investigate, create and execute their alliances by following the CSF philosophy expressed HERE. It has easy touse Maps, models and tools to fast track success and fulfil the promise of partnering. You can get your copy of ALLIANCE BRAND from all good bookshops and online sellers like Amazon.
Author: Ally Charles
Created Date: 10-11-2006
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