Forming Beneficial Strategic Alliances


Establishing a strategic alliance is not a “shake hands” deal that gets put in place and then becomes the forgotten part of your business. In order to be successful, strategic alliances must be carefully selected, rigorously tested and, like your transformed business, properly systemised in order to work effectively. Many business owners make the mistake of forming strategic alliances with unsuitable partners that end up costing the business considerable amounts – both in lost revenue, costs in unwinding the relationship and in terms of damaged goodwill. When evaluating reasons for these failures, some common trends emerge:

  • Poor planning and budgeting
  • Assuming, trusting and not checking the alliance partner’s credentials, capability, reputation etc
  • Failing to assess the strategic and cultural fit of the proposed alliance partner
  • Not properly documenting the relationship and responsibilities
  • Not agreeing (and documenting) the split of income, contribution to overheads and client ownership
  • Failing to plan and set targets for the alliance
  • Not adequately communicating the nature and purpose of the alliance to staff
  • Not providing adequate coaching or support to enable staff to cross sell or identify opportunities
  • Having poorly defined procedures to manage the flow of work

So how do you go about establishing a strong strategic alliance? We believe there are 9 essential steps after you have decided a strategic alliance is right for your business:

  1. Understand the advantages and disadvantages of a strategic alliance
  2. Conduct a rigorous analysis of your potential partner(s)
  3. Understand what you and your potential partner(s) bring to the arrangement
  4. Negotiate the arrangement
  5. Structure and document your arrangement
  6. Agree on who does what
  7. Plan
  8. Execute
  9. Manage

You will notice that nearly 90% of the process takes place before you and your strategic alliance partner start to do anything with clients. There is a good reason for this – the 90% of the time you invest in preparation will allow you two important things: time to get to know your potential alliance partner even better and time to make sure you have structured an alliance partnership that suits your business.

Get in touch and ask us to conduct a FREE Business Evaluation Meeting and find out about our unique way of designing and implementing strategies to generate sustainable business improvement.

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