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Are
your strategic alliances working for you?
By
Robyn Henderson
Strategic
alliances are definitely becoming a competitive
advantage in this tight economic market. Let’s
clarify the difference between a strategic alliance
and networking. The basis of networking is giving
without expectation – doing something for
someone not to get something back – but
because you want to help someone achieve what
they want. It may be a tiny piece of information
to you – but a very relevant piece of information
for that person. You make a decision to share
the information not expecting anything in return.
No money exchanges hands, you share the information
and that is it.
On the other hand, strategic alliances occur when
two or more people come together in a pre-defined
situation and both expect a return on a relationship
or project etc. e.g. a company sponsors a conference
or an event hoping to gain business from that
alliances. Their expectation is that the other
party will endorse their sponsorship and assist
them to gain new business by giving them access
to the members or attendees. In this example there
are no guarantees but an above average expectation
of mutual gain.
Another example might be where an accountant,
banker and real estate agent form an alliance,
meeting regularly and cross network clients –
facilitating a regular stream of referrals for
all concerned.
All of these alliances are built on a high level
of trust. Some have a predetermined conclusion
e.g. the convention ends and the sponsorship ends.
Unfortunately, some alliances dwindle out and
fade away without a formal conclusion and sometimes
this builds resentment with one or more parties.
So let’s look at some ways to avoid strategic
alliance pitfalls.
-
Watch out for different personal habits e.g.
mixing non-smokers with heavy smokers, people
who run late with people who are always on time
or early. This may not sound like a small point
but over time can become a very irritating habit
and ultimately sabotage the alliances
- Ensure
all parties are prepared to lose or invest the
same amount of effort or money. There is no
shortage of great ideas for alliances, but there
can be a shortage or limit to potential financial
commitment. Again resentment can creep in when
one party is expected to contribute more than
the other with no obvious advantage
- The
alliance is open ended. Using the example of
the accountant, banker and real estate agent
– lets say the banker and the accountant
initially gain most from that alliance, but
seem to be unable to refer home buyers and sellers
to the real estate agent – who may eventually
become resentful and stop giving the referrals.
A way to avoid that situation would be to initially
come together in an informal referral network
for a set amount of time. By tracking the referrals
over a three month period and assessing the
return on effort/investment of time at the end
of that period, the group can then decide if
they are going to continue the arrangement or
disband. The real estate agent will also have
an opportunity to express his disappointment
and maybe suggest ways that will make it easy
for the others to speed up the referrals.
- Be
prepared to cut your losses. If you have given
an alliance your best shot, exhausted your budget
and still no results. Then you have to really
look at your options with this alliance - whether
you continue or walk away. Is the market ready
for your project? Have you missed the market?
Have circumstances beyond your control affected
the potential number of buyers e.g. market crash,
natural disaster etc. Are you prepared to broaden
the potential allies to create a cash injection
or alternately open new networks to you? Sometimes
all you need is a month or so away from the
project/alliance to allow for fresh ideas and
recharging of energy – maybe even waiting
until the market catches up or a market downturn
adjusts. Having honest and direct communication
at these times is very important to ensure longevity
of the alliance. Plus how you manage a difficult
or tricky situation is often discussed amongst
your allies networks as well. Many people don’t
realize the ramifications of this when they
abuse trust or deal unethically with a ally
– they not only destroy the one connection,
often their destroy any future connections with
their allies networks as well.
My
final tip would be to aim for quality alliances,
not quantity. Alliances come in all shapes and
sizes – electronic, physical, global, local,
national – social, business – the
options are endless.
Start small, communicate well, aim for mutually
beneficial results, work project by project always
in an ethical manner and you will enjoy a lifetime
of valuable connections.
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