Partnerships and alliances are an increasingly popular corporate route to growth. They can enable you to reach new markets at greater speed and lower risk and investment. Taken from my upcoming book, The CEO’s Strategy Handbook, here’s an edited list of five guidelines to follow when entering into strategic partnerships
- All parties have a strong belief in the value of partnerships. There will always be problems and issues in any alliance. If you or your potential partners are less than sincere in your absolute belief in the value of partnerships those problems will turn from slightly choppy waters to enormous tidal waves of destruction.
- There is a good fit of senior personalities. Both teams inevitably take their lead from the boss, and if the leaders are working well together and getting on, it makes it significantly easier for everyone else to work towards the shared aims. You needn’t all be bosom buddies, but there should be sufficient mutual respect and trust at the top to enable progress.
- Aligned objectives. All the partners of the coalition must be materially better off from being part of the alliance than not. This means that all parties must be clear on their specific, tangible objectives and, at the same time, recognize and support the objectives of their partners. A partnership cannot function with a win-lose mentality; it must be a win-win-win..
- Plan upfront for success and failure. All partnerships set off together with the firm intention of succeeding. The reality is that some do and, unfortunately, some don’t. It is critical that you establish what constitutes success and failure up front, and that you are clear on the consequences of both events. In terms of failure, it is worthwhile thinking through all potential downside and determining how you would resolve them. Similarly, you should be clear on what success might mean both for this project and potential future joint ventures.
- Create formal ways of working. The initial teams may be driven by shared enthusiasm and great working relationships, but it’s likely that the composition of the teams, including the leadership, will change over time. You must be able to deal with these changes without needing to start the relationship from scratch. You should therefore create the governance structure for effective ongoing communication and decision-making.
© Stuart Cross 2011. All rights reserved.