Making business alliances work.

• Author: Segil, Larraine D.

Creating, building and managing successful alliances is a capability that is critical to associations and companies of all sizes. As global markets become more complex--yet needing essential local expertise--and as industries in media, communications and all their supporting technologies converge, competition intensifies. Alliances enable organizations to focus on what they do best, while leveraging their assets to save time and cost, in relationships with other symbiotic organizations.

However, despite their prevalence and increasing importance, most alliances fail. It is a widely accepted fact that the majority (60 percent) of alliances either fail outright, fall captive to shifting priorities, or achieve only initial goals, and 55 percent fall apart within three years after they are formed. In my research over the past 20 years, I have found that alliances most often fail not because of poor strategy and development or business mismanagement, but because partner companies are unable to work together effectively and are therefore, unable to achieve their joint goals. Unlike transactional business arrangements between companies, strategic alliances are open-ended, intimate, long-term, risky and unpredictable. They involve the combination of organizations with different cultures, values, histories, interests, and methods of operating.

While every organization is different and faces multiple challenges, there are systemic and recurring behaviors that often are precursors to alliance failure. Recognizing them enables one to implement corrective action.

Building and Maintaining Internal Alignment

Critical to alliance success is the ability to build and sustain internal alignment about such issues as whether to partner, with whom to partner, the purpose and goals of partnering, how a partnership will operate, who will be involved, and when each milestone should be reached. Without the ability to maintain internal alignment, a company runs significant risks of sending mixed messages to, or acting inconsistently toward, its partners, misleading or confusing them, and jeopardizing trust between them.

The chances of both developing and sustaining alignment over the course of complex, long-term relationships are dramatically increased by putting an alignment system into place up front that identifies critical issues and who has 'skin in the game,' defines who is accountable for decision-making about various issues, and lays out a procedure for how...