The title of this article refers to the thought processes of a top manager of a company, corporation, or business. There are reams of articles written about various entities forming business or strategic alliances and all the benefits that will accrue to the partners. There are almost as many articles detailing all the alliances that fail! The careful manager wants to help his company succeed and an alliance might be one of the answers, but how to know who, when, where, and how? And why?
First National created a very helpful white paper that answers these questions. Their approach is to consider the business alliances as conferring a competitive edge, giving more resources to offer while minimizing any weaknesses.
The first question to ask: when and where should you consider an alliance? If you are lagging in sales, share, technology, etc. and/or have a strong competitor challenging you, you can use the help of an alliance. But, who do you choose?
This takes careful research and in fact, you should use the same approach as if you were buying the potential ally. Use the Internet, financial reports, talk with their customers and suppliers, find out if their quality approach is compatible with yours, what is their marketing vision, and, most importantly, how will they feel about partnering with you? Do they share the same values as you?
Last, how will the alliance work? Here the devil truly is in the details. Each alliance is different. They stand on their own merits. Just like going on a date. Will you have a second one? Once you contact your potential partner, treat them during the discussion as if they already are your partner. Be honest and lay out all the factors, including both the pluses and minuses. They may have answers, but even if they don’t, finding out these factors after the “marriage” is sure to be unsettling.
Have very specific terms for your relationship, which means a detailed legal document. Include all the conditions and terms for success, or in case of failure, dissolving the alliance. When you start the relationship, start with what are the conditions of success in several years. Conditions change and the alliance now right, could fail in the future.
This does sound like a lot of work, and it is! But the benefits are very rewarding personally and professionally. If it sounds like too much for you to handle but you want to explore the benefits, consider a partner to help you find the right alliance. 3rd Eagle has years of experience and many satisfied clients we have assisted in forming strategic business alliances.