Strategic alliances are today commonplace among large corporations. The advantages allow these companies to successfully compete in the global marketplace. Powerful synergies are the outcropping of these alliances. Smaller companies can derive the same advantages through alliance relationships. In this article, I will focus on what I call Synergistic Partnering Alliances where competitors can realize great value by building relationships of integrity with one another.
To begin, you must search for the perfect mate. How do you find competitors with whom who can successfully become a synergistic alliance partner? First, talk to your suppliers. They already have a great deal of experience with your competitors. They also have a good handle on the integrity or lack there of. Also, your trade associations can be quite helpful. The board members and staffers are usually knowledgeable about the players in your industry. Other possibilities are your local chambers of commerce and the better business bureau.
The key is to find a partner with the same core values as you. This will make life together better. Ask IBM and Apple why their alliance did not work out. If you can find anyone that will tell the truth, they will most likely blame the fact that the cultures of the two companies were too different. A significant point in selecting a partner is to keep in mind that your alliance will only be as strong as its weakest link. What I mean to say is that you want a winner, not a looser on your team. Do not build an alliance with a needy person or organization, especially if they/it that cannot make it on their own. Trust me—you will regret it if you do.
Next, you must court your future alliance partner to start building a relationship. Assisting your future synergistic alliance partner to have an emotional ownership in the partnering paradigm will be your primary mission at this point. Intellectually, your partner can see and realize the benefits of a synergistic relationship but the fear of losing control might block their emotional ownership to a commitment. Without their emotional ownership, not buy-in, any commitment made will have been done on a shaky foundation.
Now, they might be experiencing the getting married jitters. You must successfully deal with the fears and issues in synergistic alliance partnering with competitors. Sensitivity and understanding of your potential partner’s situation are crucial at this juncture. Talk about the up side and the down sides to your intended alliance. Talk about how you might deal with the relationship if things do not work out. Plan an exit strategy. Getting fears and issues out on the table rather than hiding them in the dark will serve all involved extremely well.
Where are you going to live?
The question is about your individual and combined marketing areas. Also, talk about new buying habits and information recovery systems. You will need to track new information to detect the value gained in the alliance. Selecting the alliance marketing area, geographically and service/product mix is no easy task. You will need to pay close attention to the small and large details alike. Might you share warehousing or delivery facilities or possibly even employees to overcome personnel challenges?
Who is Going to Do the Chores?
Alliance partner responsibilities and activities make the relationship a success or failure. Too often this is the area where unrealistic expectations of one another rear themselves. Be clear, commit it to writing, who will be doing what. The palest ink is better than the most powerful memory. It is too easy to forget your commitments in six months, a year or a decade later. Regular value updates on the alliance relationship will be very helpful. Too often we keep issues to ourselves and the issues fester like a splinter. This is not the way to build a successful relationship. The relationship value updates should consist of expectations (met and missed) and profitability targets. This information will assist you in determining to upgrade, downgrade or maintain the relationship as is.
Time to tie the knot
The synergistic alliance partnering agreement should be in writing. It should contain detailed explanations of activities, expectations and responsibilities of each partner. This document will be your guiding light or road map for your successful alliance relationship. When in question, you will refer to the “Partnering Charter.” Now that you are in a relationship, it will be necessary to make regular relationship bank deposits of physical and emotional energy. Always meet your partner more than half way. By giving more than half, a robust synergy follows and so much more is possible by working in concert than singularly.
Surviving under the sheets?
Yes! Being in an alliance relationship is much like being married. Once the synergistic partnering alliance is in place it becomes essential to learn how to become successful cohabitants. While each of you is responsible for your own success, you now must consider how your actions will affect your partner’s business. Be aware of the things you do and how your actions might create a need for your partner to change their strategic plan. Confer before you act. After all, you are in bed together. To get space, you must give it first.
When your partner takes all the covers
This is not much fun. To Successfully deal with the regular and normal issues and challenges of the relationship, you must get past the “Denial Syndrome.” Denial is an insidious situation that generally results in personal destruction. The expression, putting your head in the sand like an ostrich is applicable to denial. The problem with putting your head in the sand is that you leave your posterior undefended. Too often in conflict, one finds it easier to ignore than confront. A confrontation does not have to be a knock down drag out affair, especially if you selected your partner well. Open communication is the key element in dealing with missing covers, or anything else. Remember, if you steal your partner’s sheets today, they might take yours when you are cold and in need.
We must go to the marriage counselor
When relationship roadblocks occur, it may be necessary to seek third party counsel for mediation. In this situation, authenticity and openness are meaningful. Since you took the time to choose well, it is usually worth the time, energy and expense necessary to rebuild the partnering bridge. Mediation is becoming a popular method for resolving conflict and it will be easier than you might think to find a qualified mediator. In this process of reconciliation, focus on the reasons for selecting your partner and the benefits you hoped to receive rather than the anger, rage or hurt feelings.
Oh no, divorce!
You truly tried but it did not work out. For a myriad of reasons, this sometimes happens. No reason to feel like a failure or declare that you’ll never again be in a relationship. In dealing with separation issues, be the bigger person and again meet your partner more than half way. Otherwise the rage and anger will fester and you will become immobilized. If there is “community property” dispose of it fairly or offer to buy out your partner. Either work it out, or take court ordered pennies on the dollar. Only outsiders win in this situation.
We did it, and look at the profits
Yes, success is my hope for you and your partner. Enjoying the journey with your alliance partner and looking for additional opportunities is what make all the work worth the energy. Maybe your alliance will simply be a buying consortium. Perhaps it will be an alliance to serve a large multi regional customer. It could be to share a pool of employees or an advertising coop. What ever you select, have fun in your partnering journey. Enjoy the process and the rewards. And I assure you, build your alliance correctly, and there will be rewards.
Ed is the Founder and CEO of the 501(c)(3) non-profit public charity, Cigar PEG Philanthropy through Fun, and president at Rigsbee Research which conducts qualitative member ROI research and consulting for associations and societies. He has been called “the dynamite that broke up our log jam” by association executives—rarely politically correct and almost always provocative—and from a dozen years as a United States Soccer Federation referee, Ed calls it the way he sees it. Exceptional resources at www.rigsbee.com.