Should we just roll the dice, or can we make better choices in the way we identify those individuals and organisations we build relationships with?
Since our last BIG Network session where we explored ‘what it takes to establish a successful strategic alliance’ we’ve been translating some of the work and outputs into a series of blogs. Following on from looking at ‘why defining the purpose and motives of a strategic alliance is so important, this blog looks at the ‘who’ of a successful strategic alliance; how to identify and select the right partners.
We may have experienced that the growth of Small and Medium-Sized Enterprises (SMEs) can be delivered, at a high rate, through strategic alliances. We also can see that there is a growing body of evidence that tells us of the strategic benefit of alliances to SMEs. However, with the myriad options of potential alliance partners, how can we balance the complexities of what different partners and types of partnership(s) can offer us as SME owner-managers? If we know we want to explore the benefits of a strategic alliance and potentially enter into one, what kinds of questions should we be asking ourselves and what are the key factors in choosing a partner?
From my experience I know that I’ve often entered into alliances because of a very urgent need or simply because of a conversation with someone who I’ve happened to spend time with and get on well with. At times this has been great, hugely beneficial and a lot of fun. At other times it has been a mixed experience, with some positives and lots of fruitless activity. And then there have been the close calls and disastrous moments; getting a call from a key delivery partner’s staff to say the bailiffs are in the building and the owner is in Spain. All of these experiences are clear indicators that spending time thinking about the choice of partner is worthwhile.
Fundamentally we need to remember that we should be making a strategic choice in leading our businesses into partnership. The choice phase is a significant and discrete element of developing strategic partnerships and requires attention, reflection and time. Hoffman and Schlosser (2001) identify five key factors to consider in making good choices about who to ally with from an SME perspective, and we felt these were useful lenses to explore the above questions.
- Identify the potential of an alliance from your strategic objectives
This for me is the vital and fundamental starting point. It seems simple, yet on reflection and discussion with SME owner-managers, we all recognise when the starting point has actually been a chat with someone we like and the sharing of a ‘good idea’.
How often do we find ourselves down the road of ‘doing something’ without even having asked ourselves the key questions of ‘how does this fit with my strategic aims’ and ‘what is the strategic potential of this’?
Before getting started on developing a strategic alliance, these questions need to be debated, in a reflective and critical space to ascertain whether the potential opportunity is strategically worth exploring further.
- Build on established, trusting relationships
Trust takes time to build and is a highly valuable thing to have developed. It’s easily lost and takes significant time to gain, so where there is already significant trust is a great place to start looking for potential partners to achieve your strategic goals.
However, we must be rigorous in establishing factors beyond trust and congeniality to determine how we might work together and what for; let’s not assume that trust built on what has gone before is good enough for what is coming next!
- Look for partners who excel in the field of co-operation
And be scrupulous in assessing this. It may seem obvious that we should choose partners who are really really good in the area we want to exploit together however, we need to ask;
- What is it that makes us believe they are?
- How can we challenge and test our assumptions here?
- How can we be clear on the value we add?
Questions like these help us to understand why we are working with a particular partner, and how they will allow us to achieve the potential we are seeking.
- Seek complementary contributions to the alliance
Both parties need to be making contributions to the alliance that complement each other. It is pointless to duplicate expertise and value add to any large degree. We also need to be clear that we share the same view on the value that each party delivers, and debate where there are possible differences of opinion. It’s all too easy to assume that what we see as the vital ingredient we add is understood by our partner, however, how do we know that is the case?
- Choose to ally where there is agreement of fundamental values and convictions
Why? Because however well it goes you’ll be spending a lot of time together, working very closely and quite probably, or maybe definitely, experiencing challenging times, difficulty and moments of difference of opinion and viewpoint.
You’ll also be succeeding together and achieving together. If you share the same values and convictions you can share your successes joyfully, and bear trials and tribulations with respect and a relationship that can endure. Of course there are times where compromise and acceptance of others is necessary however, where values and convictions are significantly different, alliances are no fun and unlikely to succeed.
Bearing the above five areas in mind when choosing partners for strategic alliances and remembering it is about making a choice should help shift the balance from “some great, some dreadful” in favour of strategically positive and enjoyable alliances with other individuals and organisations.
Make a difference (MAD) challenge:
We’ve got into a habit of challenging you, the reader, to reflect on the contents of our blogs for your own context. We truly believe that learning and development comes through practice and experimentation.
Having read this blog, we would challenge you to take some time to look at the strategic alliance you both have, and also desire. Using the principles above, analyse these strategic alliances, and ask:
- How well do the alliances we have sit with the principals of making good choices in terms of strategic alliance partners?
- Why is this?
- What are the implications?
Then, turning your attention to potential strategic alliances, using the principles above consider:
- What does a good strategic partner look like?
- Where do they operate?
- What further information might we need?
- How could we get it?
- How might we begin a relationship with them?
The BIG Network provides a space for ambitious owner-managers to explore, challenge and resolve issues that are central to the sustainable success of their organisations. The network is led by its members and is prefaced on openness and honesty, mutual respect and confidentiality
For further information on the BIG Network contact Dr Simon Raby on 01227 824740 or S.O.Raby@kent.ac.uk
Selected References:
Hoffmann, W.H. and Schlosser, R. 2001. Success Factors of Strategic Alliances in Small and Medium-sized Enterprises – An Empirical Survey, Long range plannin 38:357-381.