Alliances, from simple collaborations to global joint ventures, harness the capabilities and assets of multiple firms to create growth options. They also pose new, often-misunderstood risks. Most alliances fail to reach their planned objectives. Few reach their full potential.
Our Senior Advisers understand the fundamental cause of alliance failure to be the lack of an integrated alliance architecture — from strategy formulation to partner choice to portfolio and day-to-day alliance management. True North brings decades of experience planning, forming, and managing alliances to our clients. We collaborate with them systematically to design and build their alliance-management capabilities. Working with senior executives we build understanding and commitment. Clients reinforce that commitment through enhanced decision-making processes and broad-based training. Over time, these actions drive alliance-supporting behaviors across the organization.
Clients prefer our integrated approach, as we work with them to blueprint alliance management needs, identify architectural elements with the greatest effect on success and focus improvement efforts. True North does not offer quick fixes, nor do we tout studies purporting root causes that match our service offering. We agree with top alliance practitioners that spot fixes are ineffective.
Ecosystem Design and Management
Leaders must simultaneously build strong core capabilities internally, while leveraging external sources suppliers, alliance partners, academic and industry organizations to thrive in an increasing complex competitive and regulatory arena. Business ecosystems are difficult to create, and even more difficult to manage. Successful corporations often face the great challenges to effective collaboration, as their people and systems are adapted to solitary control. True North helps with developing, implementing and managing:
Ecosystem business model strategy and architecture
Relationship planning and negotiation
Alliance/JV management
Alliance/JV corporate capability building
Recognizing that each client’s alliance needs are unique, we help them:
Link Alliances to Strategy
Strategy is the starting point. Alliances must support the strategy in coordination with all other elements of the operating model. Executives craft a robust operating model by making build-acquire-ally choices. Effective strategic linking requires a sophisticated understanding of the potential roles for alliances, and the pitfalls of each. Leading firms focus on a small number of well-suited alliance types. This allows them to structure their operating model and develop their people to support those alliances.
True North’s Senior Advisers bring deep, hands-on understanding of alliances ranging from global joint ventures to small academic collaborations. We work with our clients to shape business models that capitalize on external capabilities in a sustainable fashion. As strategists, we help clients to capitalize on alliances as part of the integrated whole, rather than as one-off opportunities. This ensures clear direction, and maximizes the likelihood of success.
Attract and Engage the Right Partners
Rarely do executives face a single option for an alliance partner. Too often, however, they focus on one dimension of a particular partner, or become overly committed to a single option. Given a clearly defined strategic role for alliances, companies should evaluate potential partners using a fact-based assessment of strategic, operational, and cultural elements — not just of potential partners, but also of their own firms, too. High-level evaluation suffices early in the screening process. As the list of potential partner firms shortens, prudent executives refine the assessment. Timing is vital. A well-managed search process greatly simplifies negotiation and contracting, and transitions smoothly into operation. With important alliances, this cannot be left to chance.
By engaging in substantive discussions early in the process, executives can manage expectations and avoid misunderstandings. Conflict during the pre-launch period can impair alliances for months, delaying benefits and limiting upside. The search-and-contract process requires orchestration of business leadership, business development, procurement, legal, operations, and alliance management. Success does not happen accidentally.
Leading alliance firms tend to become partners-of-choice in their industries. Cisco in high tech, Eli Lilly in pharmaceuticals, and IBM in systems integration are well known as desirable alliance partners. Sustainable partner-of-choice status is built on more than market position; it requires a reputation for excellence as an alliance partner. Firms that excel in both their own business and in alliance management have a significant advantage in the pursuit of attractive alliance partners. True North helps its clients to establish themselves as preferred partners.
Balance the Alliance Portfolio
The strategy making process defines the firm’s approach to alliances at one point in time. As the situation evolves, management must continually ensure alignment between its alliance portfolio and business needs. External conditions change, necessitating new capabilities. Strategic goals shift, as management pursues sustainable, profitable growth. And existing alliances alter, as they meet various challenges and successes. Portfolio management is the art of balancing these factors to maintain tight alignment to strategy. This involves redirecting individual alliances, and making add or divest decisions across the portfolio. Executives must regularly look at important alliances to consider changes in emphasis or direction.
True North’s unique team of Senior Advisers includes portfolio-savvy business leaders and world-class strategists. We help clients institute systematic, repeatable approaches to alliance portfolio management. Moreover, we coach and guide executives to enhance their ability to oversee their firms’ most important alliances.
Manage High-Performance Alliances
Managing an alliance differs dramatically from managing an internal project. Alliances involve shared control, an anathema to many executives. No contract or set of metrics will adequately direct the countless “micro-decisions” that create success, or underlay failure. Alliance management must be systematic, results-focused, while balancing the incentives, interests and emotions of people involved. The “rules of the game” understood by all in a given firm give way to a more fluid, uncertain alliance environment. Even seemingly small differences in frequency and type of communication, working hours, and management style can create friction and lead to serious disruption. Especially when an alliance involves substantial daily interaction between partner companies’ personnel, the scope for conflict is great.
True North helps clients shape and institute alliance-management protocols–processes, tools, and metrics–combined with behavior-change approaches that support collaboration and innovation. By helping our clients take a balanced operational-strategic-behavioral approach, we can tailor solutions to specific needs. The result is scalable, consistent alliance performance that functions within the clients core organization and culture.
We help clients avoid the “best-practices trap.” Frequently firms seek to duplicate elements of another organization’s alliance practices. This rarely ends well. The best alliance practitioners have systems that are finely tailored to the company’s business, operating processes, culture, and history. One cannot simply cut-and-paste. Our Senior Advisers have built and run highly successful alliance programs. They help clients to learn from others while integrating sustainable alliance management into particular settings.
Many clients come to True North with alliances already in place. A significant part of our practice involves helping to re-invigorate those alliances. Through alliance health checks and operational reviews we help clients to achieve higher levels of performance from existing alliances, setting the stage for increased business success.