Are Your Strategic Alliances Working For YouDocument Transcript
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
• 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
• 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.