Keeping the attraction alive.

• Author: Harrigan, Rudie
• Position: Corporate alliance

Special efforts are needed to learn how to work with a partner and to maintain an alliance over time and the tide of events.

The promise of corporate alliances is often unrealized. Although managers are forming more alliances, their firms are enjoying them less because expectations often outrun what can be delivered through this form of business enterprise. Because few firms can afford to make all of the investments needed to compete on every front where they see opportunities, it is helpful to have allies.

Yet it is difficult for managers to make the attitudinal transition from forming partnerships to working within them. Dealmaking is often more exciting than working day to day with partners. The chase is more interesting than the kill. Negotiating the details of how things will be is far easier than making it so.

Shortfalls between expectations and reality are unfortunate because alliance partners can often supplement firms' resources and organizational capabilities to provide the mix that both firms need for competitive success. There are so many ways available to combine value-adding activities when firms take partners that the corporate alliance should be an option in every firm's strategy arsenal. Indeed few big-ticket projects are being undertaken alone any more because the stakes are too high to bet the farm.

To use this means of implementing strategy effectively, managers should be honing their diplomatic skills and working to maximize the benefits of working together. Because there are costs to cooperation, managers should be doing their homework before searching for Prince Charming. But just in case there was not due diligence during the courtship phase, here are suggestions for reviewing and improving on venturing experiences culled from my ongoing field interviews.

A review of sponsoring firms' expectations concerning the purpose and responsibilities of parties to corporate alliances can clear the air when partners become disenchanted with how their partnership is evolving. Managers can also institute organizational practices to improve their firm's benefits from working with outsiders.

Alliances based on strong business grounds are more likely to be mutually satisfying to partners than those based on "blue sky" aspirations. Typically cited cost- and risk-sharing motivations should be based on extant projects where progress can be measured. Each partner should be missing just one (or two) complementary and easy-to-identify ingredients needed for marketplace success...