Sunday, January 13, 2008

Keeping Alliances Aligned

Over the years business alliances have become much more prevalent in our industry. Design-Build and Joint Ventures are both examples of what is a lengthening list of solution alliances, and that’s just on the development side of our equation. When you think about outsourcing and increased alliances on the services side it can be mind-numbing. So, if alliances are this important to us, how do we assure they remain healthy and beneficial? They are, after all, supposed to be win-win, or in some cases win-win-win-win. This is really interesting since companies may be part of an alliance on one project and in direct competition on others. Strategies which prove helpful in maintaining alignment of partners major in emphasizing common needs and benefits while taking advantage of strengths one partner may offer that others don’t.

The business plan is less important than how you work together. Stated another way, an alliance who’s success or failure is tied to meeting an elaborate set of goals is more likely to experience loss of focus and failure than one which is structured primarily around key performance outcomes and how the groups will work together to achieve them. Knowing how you will work together requires knowing how each works internally so you can craft guidelines for working together that are not doomed by the landmines of corporate process and culture. Ideally alliance partners should act and feel as if they are working for the same company when engaged in the alliance. In other words, it’s a relationship thing.

What gets measured gets done. Ever hear that one before? It’s true, you know. So, while you are busy developing metrics that measure process, quality and cost, don’t forget to measure progress toward alliance goals. Also, be wary of pressure to show immediate positive performance on details at the outset. Alliances take a while to find their sea legs and develop “normalcy.” Expecting them to deliver on target the first month can be unrealistic. In the early days focus on the attributes of success and report those. If you’re doing well there you are building in the right direction. Think of these as start-up metrics that will be replaced once the operation is geared up.

Conflict can be a good thing. When different companies team up it is natural that they will not always be in synch, especially at the beginning. And, there may be a tendency to interpret “compromise” as “do it our way.” Alliances are formed because no one company has all the attributes required to meet the need, and because the potential benefit of teaming up outweighs the risk of not participating. Often, however, once the alliance is made the differences that motivated its creation become roadblocks. A key to overcoming this obstacle is to make the conflicts visible. Very visible. Instead of hiding them in the name of being a “good team member” you will serve everyone, including the client, better by identifying them and helping the alliance deal with them openly and fairly. Escalate when you have to, talk candidly but fairly, and pose the conflict as a lost opportunity that represents lost goodwill and/or revenue. My favorite governance model for alliances is a group of key executives representing all partners but essentially sitting as the “Board” of the alliance. When issues get escalated they come to this group which presumably has the best interests of the alliance at heart, not to individual corporate domains where the alliance has little standing and no voice.

Collaborate, collaborate, collaborate. It seems silly to say that, like I am overstating the obvious. But it is true, collaboration is the key to alliance success. Yes, there will be a governance system and all the other trappings of business, but at the heart of it it’s about people working together. Spend more time and effort on unbiased investigation and analysis of issues and joint discovery, and less time and effort on assigning blame for problems and failures, and you will be a lot better off. One way to encourage collaboration is to establish collaboration rules of the road that describe how conflict will be communicated, how objectivity will be maintained, and how communication will be both consistent and constructive.

1 comment:

  1. Good timely topic.. The author points to a number of factors that very important.

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