What You Need To Know To Manage Alliances

Few organizations have everything that they need. You may need money, leads, or capability. No matter what you need, there is someone who has it. That someone is a potential Partner.

Curtis E. Sahakian

Have you ever had to work with another Organization to deliver a project you have been assigned?

If yes, you may have experienced a wide range of emotions including frustration, confusion, and helplessness.  The truth is managing projects across Organizations is a real challenge.  In fact, most alliances fall short of going-in expectations.

But, when alliances are successful, they allow you to achieve a competitive advantage by accomplishing far more than your organization could have on its own.  Research suggests successful alliances exhibit three things: 1) strategic fit (both parties bring something unique to the alliance), 2) organizational fit (similar leadership and decision-making models) and 3) chemistry fit (no culture clash).

Keys To Successful Alliances

In addition to these macro conditions, there are 9 success factors you should consider to help ensure effectiveness and efficiency of your alliance:

1. Management Commitment.  Senior managers from all organizations need to be proactively involved.  Their actions must demonstrate the importance of the alliance and commitment to success.
2. Right People and Adequate Resources.  Successful alliances have sufficient staffing and budget.  The people participating in the alliance are assigned based on their proven expertise and collaborative skills.  Alliances should not be viewed as training grounds for junior personnel.
3. Aligned Direction.  The objectives, goals, strategies and success measures need to be agreed by the Management of all organizations in the alliance.  And, the Management needs to be involved in providing feedback to the team on a regular basis.
4. Clear Responsibilities.  You need clarity in the roles and responsibilities of the collective as well as the individuals in the alliance.  The goal is to minimize (or eliminate) duplication of work.  Everybody involved needs to know how they uniquely contribute to success.
5. Frequent Communication.  This includes both formal and informal communication.  Management in each organization needs to be kept up-to-date, and the senior managers involved (typically as sponsors) need to be constantly aware of what the alliance team is doing.
6. Defined Decision-Making Process.  This should be documented in advance and agreed to by all Organizations in the alliance.  The process should not be needlessly burdened with bureaucracy.  And, it should allow issues to get raised to appropriate Management levels within participating organizations as quickly as possible.
7. Alliance Improvement Process.  Alliance performance should be purposefully reviewed and actions adopted to address opportunities for improvement.  All alliances need to be proactively managed through the stages of becoming a high performance team.
8. Aligned Work Systems.  All key work processes need to be integrated.  People in the alliance should not have to operate under the confusion of differing rules.  Misalignments (e.g. rules regarding expenses) need to be identified at the start and clear guidance established.
9. Constructive Conflict Resolution.  Issues will arise.  They need to be dealt with quickly and objectively by the right people.  You cannot allow conflicts to fester within the operating alliance team.

Additional Perspective

A 2009 study conducted on behalf of the Association of Strategic Alliance Professionals documented some relevant findings to this discussion.

• Alliance success rates in the US are around 60%.
• Co-marketing alliances are the most common form (45% of all alliances).
• Alliances are judged by Management to be adding value.

In economic development, the cost of competing in a global market is making alliances an increasingly attractive management strategy.  Local economic development organizations often cannot secure enough funding to competitively invest in promoting their community for capital attraction, retention and/or expansion.  As a consequence, more EDOs are looking to form project-based alliances with local Travel & Tourism organizations, Colleges & Universities, local industry groups, and regional or state level initiatives.  The hope is to amortize the economic development investment and deliver a bigger taxpayer ROI.

In my opinion, it is becoming mandatory for community EDOs to develop excellent alliance management skills within their organization if they want to remain competitive.  This is an area that requires Board attention and financial commitment for an EDO to be successful.  It is a different operating model than many EDO Boards have experience with and likely requires some Board education.

Discussion

What has been your experience with alliances?  Have you been a team member of an alliance project, or have you managed an alliance?  What are the unique challenges you faced?  How did you have to adjust your work process to be effective within the alliance context?  What worked and what didn’t work?  What additional success criteria would you suggest for creating and managing a winning alliance?

Leave a comment with your thoughts.

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