It’s commonly understood that professional networking and building alliances between different organisations – from third-party suppliers to investment firms – is an important aspect of business.
“Alliances between companies, whether they are from different parts of the world or different ends of the supply chain, are a fact of life in business today,” explains an article in the Harvard Business Review. “Some alliances are no more than fleeting encounters, lasting only as long as it takes one partner to establish a beachhead in a new market. Others are the prelude to a full merger of two or more companies’ technologies and capabilities. Whatever the duration and objectives of business alliances, being a good partner has become a key corporate asset.”
But it’s not enough to know that organisational alliances are important – business leaders need to know how to network and build alliances within those organisations.
The value of strategic alliances
The modern business environment is often described as being fast-paced and dynamic, but all this really means is that things change, and they change quickly. So within this environment, the ability to form – and maintain – strategic alliances can make all the difference for a company’s growth and sustainability.
So what do we mean by strategic alliances? In essence, these are cooperative agreements between businesses or organisations to pursue a set of mutually agreeable objectives, all while remaining independent of one another. These alliances can include new joint ventures, franchising, partnerships, and other forms of collaboration to combine resources, knowledge, and core competencies for mutual benefit.
But the value of strategic alliances extends beyond resource-sharing. Through these alliances and strategic networks, businesses can facilitate new business development into new markets, combine forces on new research and development initiatives, and create competitive advantages that may not be possible through internal capabilities alone.
For example, consider the differences between an American start-up organisation and an established English enterprise. Between them, there are complementary strengths in entrepreneurship and innovation, and proven strategies for scalability and adaptability in changing market demands – and when combined, these strengths and strategies can create tangible benefits and incentives for both businesses.
How to build strategic alliances
Building alliances requires a strategic approach to relationship building, where potential partners are carefully evaluated for compatibility and the ability to achieve common goals – and there are several methods that can be used to forge these valuable connections:
Identifying potential strategic alliances
The first step is to identify potential alliance partners who share a strategic vision for mutual growth and benefit. This involves assessing potential partners’ competencies, market positions, and any synergies that could be achieved through collaboration, and should also consider logistical practicalities, like governance structures for any potential alliances. For example, a business planning to enter the European market might be keen to partner with an organisation with expertise in Europe’s economies.
Building alliances with leadership members
Engagement with the organisation’s leadership is crucial as their backing can lend significant credibility and resources to the alliance. Building alliances at this level often requires demonstrating clear alignment with strategic business objectives and showcasing the potential for new opportunities and tangible business outcomes in both the short-term and the long-term.
Building alliances with key stakeholders
Beyond leadership, it’s essential to secure buy-in across key stakeholders and teams, including mid-level managers, technical experts, and operational staff. Their support can help facilitate smoother integration and cooperation between partnered organisations.
Building alliances with influential third-parties
Finally, influential third-parties such as industry thought leaders or academic institutions like business schools and universities can extend the reach and effectiveness of strategic alliances, similarly bringing fresh perspectives and additional resources.
The role of a strategic partner
A strategic partner should drive a business strategy or objectives forward in a way that would not be possible through solo endeavours, but it’s important that both partners remember that any alliance should be mutually beneficial.
“They’re called strategic ‘partners’ for a reason,” explains Breezy in a blog about strategic partners. “Not only does your strategic partner need to bring you value, but you’ll also need to do the same for them. A partnership is all about teamwork and supporting one another – it shouldn’t be a one-sided relationship where only one of you wins. As partners, you should share skills and resources to help one another to achieve goals that you couldn’t alone – it’s a simple case of ‘two heads are better than one’.”
How can strategic alliances influence organisations?
Strategic alliances have the power to influence organisations in a number of ways. For example, they can steer decision-making processes or actions by integrating external insights and capabilities within the business. In other instances, strategic alliances can help create organisational ecosystems that are more conducive to entrepreneurship, and where new products or business models can be developed more collaboratively or innovatively.
What is alliance management?
Alliance management refers to the direct management of a strategic partnership, and a focus on optimising its outcomes, managing conflicts of interest, and so on.
According to the Association of Strategic Alliance Professionals (ASAP), strategic alliances are often overseen by an alliance manager. This individual may or may not have the title of alliance manager, but nonetheless, their role is to manage and oversee one or more alliances, or even an alliance portfolio, and support with new alliance formations.
“Alliance managers must work collaboratively, communicate clearly, and coordinate activities both internally and with the partner to ensure alliance success,” ASAP explains. “In addition, alliance managers often guide decision making (even when they are not the decision makers) for an alliance at the appropriate inflection points, ensure that milestones are met, convene appropriate stakeholders and enlist their support for the alliance, problem-solve, resolve conflicts, escalate issues to senior management as needed, schedule and plan governance and other meetings, etc.”
How to evaluate the effectiveness and strategic partnerships and alliances
Evaluating the effectiveness of strategic partnerships is essential. Just because an alliance starts out strong doesn’t necessarily mean it will remain that way, so businesses need to examine any metrics related to the achievement of their strategic goals, the integration of competencies, and the overall health of the partnership.
This kind of regular assessment helps ensure that the partnership remains aligned with strategic objectives – and continues to deliver value.
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