The global alliance mind-set.

• Author: Daniels, John L.
• Position: Companies forming business alliances

Companies must evolve from isolation to partnership. An important first step is expanding the executive perspective.

In today's competitive global business environment, it is becoming increasingly clear that no one company can do it all or go it alone. As a result, a new way of doing business through alliances is evolving. This evolution is the result of intense competition, which is driving customers to demand more customization and improved access to services and products.

At the same time, companies that supply services and products are restructuring to reduce costs. Invariably, this leads to fewer in-house resources. These restructured companies quickly realize they cannot provide the global reach or scope of activity to completely satisfy their customers' increased demands. They also feel restricted in their ability to create new markets and compete on a cost-effective basis.

Today, many companies that lack the required resources are turning to alliances with business partners to help provide the needed expertise. In some cases, alliances prove easier to manage than the company's own resources. On the other hand, alliances can turn into complete disasters.

Success is based on the ability of executives to steer their companies through uncharted and perhaps virtual territory, searching for a way to move from isolation to partnership.

As can be imagined, the dimensions of managing alliances are complex. Mastering productive alliances calls for viewing business activity in a different way and learning new management skills. This article provides important global alliance considerations to help companies evolve from isolation to partnership. As a starting point, an action checklist provides a tool to benchmark a company's current alliance activity.

Every company going global should have a process to identify and develop alliances. The effort requires partnering with others who complement a company's competencies and strengths. At the same time, management must be educated and an environment created to reward synergistic activities with partners. An important first step is to expand the executive perspective.

Many companies confuse the term "global" with "multinational" or "worldwide." But global is a business concept (how you do business) rather than a geographic concept (where you do business).

Sphere of Influence

A company that has a global way of doing business has a "sphere of influence" that includes all its potential business relationships. A global company looks at its suppliers, owners, alliance partners, and competitors and asks the question: What situations and relationships can be leveraged to create a global advantage?

While most companies operate in a number of locations to earn revenue, source material, or distribute goods, a global company stretches beyond its operations to other spheres of influence. This can include exploring potential...