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TCPI News Vol. 3, No. 3

May 5, 2003

In this issue:

  1. Successful Alliances
  2. Making Alliances Work
  3. The Leadership Factors In Building Successful Alliances

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1.     Successful Alliances

“Strategic Alliances are agreements between firms in which each commits resources to achieve a common set of objectives.  Companies may form Strategic Alliances with customers, suppliers, or competitors.  Through Strategic Alliances, companies can improve competitive positioning, gain entry to new markets, supplement critical skills, and share the risk or cost of major development projects.”

 So goes the definition of Strategic Alliances on the Bain and Company Management Tools Web page (  I think we would all agree that when such business alliances are done properly, they are a powerful model for global business and all parties involved benefit.  This certainly was the goal when the concept of alliances emerged as the next best thing.

 Bill Robinson, writing in Forbes, takes a more jaded view:  “The corporate highway is littered with the burnt-out shells of thousands of strategic alliances.”  (“Why Alliances Don’t Work,” Forbes 07/01/02) ( alliances.html) He cites how alliances are deceptively easy.  “Synergies tend to be well hidden and hard to discover, while possessing the ability to mislead managers and investors alike.”  For Robinson, who points to some well-known alliance failures, it all comes down to a lack of trust and respect early on in the alliance.

But it doesn’t have to be that way according to Larraine Segil, author and strategic alliance consultant.  In fact, “trust has little to do with creating a profitable alliance,” she says (“5 Keys to Creating Successful Strategic Alliances,” Forbes 07/18/02). []  Successful alliances are possible, even with competitors.  “The real issue is follow-through.  Did their partner do what  they said they would?  If so, even without trust, the alliance can succeed.” 

She offers a 5-step disciplined approach:

1.  Select the Proper Partners for the Intended Goals

2.   Share the Right Information

3.   Negotiate a Deal That Includes Risk and Benefit Analysis (Not Necessarily Equal) for All Sides

4.   Come to a Realistic Agreement on the Time to Market and Corporate Expectations

5.   [Agree to] Mutual, Flexible Commitment on What’s Appropriate to Change, Measure, and Share within Each Partner’s Culture.

Clearly, alliances are not to be entered into lightly.  But with careful planning and listening on both sides as well as managing expectations, even with competitors the resulting sum is greater than the value of its parts.

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2.  Making Alliances Work

TCPI recently delivered a program to a leading financial services firm that was designed to help managers transition from a transactional selling business model to forging strategic alliances with other service firms as the core principle for business development.   To determine the readiness of the manager population to adopt and carry forward this fundamental change in business approach to their subordinates, we used a standardized instrument that identifies four basic personality types.  The survey turned up some interesting results

We found that the managers in the study skewed toward one personality type (65%), well above the percentage found in the general population (40%).  We’ll call this Type A.  The finding was consistent with the personality variables one might associate with senior managers in this industry.  The Type A group is a dependable, hard-working lot that prides itself on being helpful, responsible, following the rules, and playing a part in preserving our social institutions. 

The characteristics associated with success of the new business model, Type B,  are strikingly different, however.  Type Bs are predisposed to a more entrepreneurial outlook on life.   This group exhibits more naturally the behaviors needed to seek out others in the process of achieving new goals.  They tend to be more energized and are less risk averse than their Type A counterparts.  Only 16% of our group were Type B, a much smaller number than the 40% norm of the general population.

Our researchers feel that this is not unique to this group, and many companies are experiencing this competency gap as they try to reshape the way they do business.  The problem is two-fold.  First,  the group needs skills training to carry forward the business changes.  Secondly, and perhaps the more critical problem, is bringing attitudes, values, and actions of key managers in line with the behaviors needed to make an effective change.   Whether or not this aspect is addressed can be the deciding factor in your company’s change management success.

As in any change management scenario, strong leadership that models the behavior is a must.   Developing programs to assist your company’s change management efforts must include self-assessments to identify core strengths and areas for improvement on the interpersonal level and experiential events to build a comfort level with the new model.

More information on TCPI’s custom programs.

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3.  Leadership Factors In Building Alliances

First, the organization or organizations involved must have determined leaders at the top who sell the vision and provide the incentives to move in the direction of internal and external alliances.   At the next level, Regional Directors or Business Unit Managers need to carry this vision to the field.  They are charged with the responsibility of energizing the process and providing the necessary tools and psychological readiness that enables success.

Clark Aldrich, in his article, “The New Core of Leadership,” (Training & Development, March 2003), reports on the results of a series of interviews with people identified as leaders within their organizations.  He came up with six key factors associated with perceived leadership:

POWER – Leaders are effective when they have formal authority, informal authority and political influence.

IDEAS – Leaders focus a group on the right work.

TENSION – Leaders moderate tension so that the participants are neither too relaxed or too anxious.

COMMITMENT – Leaders set a few key priorities and discard the rest.

BALANCE – Leaders keep power, ideas and relationships in harmony with one another.

STRATEGY – Leaders think and act strategically, balancing the big picture with daily activities to accomplish goals.

These key attributes align with Marvin Gottlieb’s observation about the characteristics of leadership, (Managing Group Process, Praeger Publishers, 2003).  He calls these characteristics the 3 C’s.  Here’s how they apply to building successful alliances:

CONSISTENCY - Developing a common vision, providing clear direction and priorities, clarifying roles and responsibilities, responding to a set of core values that relate to all aspects of doing business, and keeping the alliance relatively stable regardless of other changes occurring in the organizational system.

COMMITMENT – A leader’s influence is directly related to the recognition of his or her commitment to particular issues and points of view.  Successful leaders command attention.  They demonstrate an eagerness to present their points of view.  With alliances, they are firm and direct when stating expectations or confronting issues or ideas that run contrary to their established thinking.

COURAGE – Building successful alliances demands that leaders make decisions that involve risk and take a stand in the face of ambiguity or conflict.  Successful leaders confront problems directly and take action based on what they believe is right.

Learn More

For information on Marvin Gottlieb’s other publications.

Learn more about Gottlieb and Conkling's book, Managing the Workplace Survivors: Organizational Downsizing and the Commitment Gap.

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