6 Tips for a Great Strategic Alliance
I had a great breakfast business meeting this week with two leaders who are energized and focused on growing a line of business within their company. Through our discussions we realized that our service offerings were complementary and that I had an expertise that would add value to their competitive advantage and that their niche and client base could create prospects for my business. We had the makings of a ‘win win’ situation and decided to discuss further if there was truly a mutually beneficial strategic alliance in our working together.
A strategic alliance is an agreement between two or more parties to pursue a set of agreed upon objectives while remaining independent organizations (Wikipedia). There are many different types of alliances that businesses can make some are conventional and others are strategic. An alliance can be between colleagues, peers or businesses.
Alliances are very important for business success as they allow a business to expand its product or service offerings without having to invest or take a risk in developing this expertise or niche on their own.
What Makes an Alliance Strategic in Business?
Jason Wakeam’s article in the Ivey Business Journal defined an alliance as strategic if any one of the following criteria are met:
The alliance is:
- 1. “Critical to the success of a core business goal or objective or [personal goal]
- 2. Critical to the development or maintenance of a core competency or other source of competitive advantage.
- 3. Blocks a competitive threat.
- 4. Creates or maintains strategic choices for the firm [or manager].
- 5. Mitigates a significant risk to the business [or manager].”
Personal Strategic Alliances in the Workplace
Alliances between colleagues need to be in the best interest of the company’s goals and the manager’s goals. These alliances can be helpful and supportive as they can take the form of mentoring. They can also be beneficial for moving action plans forward and improving cross functional team alignment. Alliances are not a ‘cliques’ which are solely self-serving and can breed gossip or other negative behaviours and have a negative effect on company culture.
- 1. There must be executive support and sponsorship from both companies
- 2. The values and cultures of the 2 businesses need to be aligned – without value alignment the alliance will struggle. Trust and transparency are very important for a successful alliance
- 3. There has to be open sharing between the 2 businesses as to the objectives of the alliance
- 4. A balanced contribution to the value proposition of each company is very important – this is where the win-win comes in
- 5. With a great strategic alliance – there is a 3rd win and that is for the customer or client as they will reap the benefits of this alliance
- 6. The alliance needs to leverage the strengths of each person, business unit or company.
An Alliance in the Making
Through my discussions at my breakfast meeting we discussed how our alliance would contribute to our core business objectives (for both of us to grow our business), development of a competitive advantage for them and development of a core competency for me. Based on the criteria above we have the beginnings of a great “strategic alliance”!
Please share your thoughts on great or not so great alliances you may have been involved in…
Stay tuned for an upcoming blog on how to identify which types of people or businesses to form strategic alliances with…