Nine tips for strategic alliances that really work
In a recent press release, Hallmark, the world's leading greeting card brand, announced a strategic alliance with Shutterfly Inc., a leading Internet-based digital photo site. The goal is to have “exclusive Hallmark-designed customizable cards featured on Shutterfly's new personalized greeting card site, Treat.com.”
According to Investopedia.com, a strategic alliance is…
…an arrangement between two companies that have decided to share resources to undertake a specific, mutually beneficial project.
Different from joint ventures – which generally involve pooling resources to create an entirely new business entity – strategic alliances allow companies to maintain their autonomy while engaging in an entirely new business opportunity for mutual gain.
To do it right, an Inc. Magazine article, “How to Build Business Alliances,” provides some suggestions on managing strategic alliances. We’ve gathered the information into 9 steps (plus one of our own).
Making strategic alliances work requires you to:
- Develop a clear plan that will result in a profitable and beneficial business alliance that beats your current margins and justifies the effort;
- Plan to make this relationship a long-term venture over the next three to five years;
- Choose the right alliance – a partner who “deals honestly with associates, employees, and customers";
- Align your strategies and link them by operating principles;
- Establish an agenda for negotiations and be sure to include items such as negotiating team, scope of partnership, and goals, roles, and obligations;
- Obtain buy-in from every department, especially those who are responsible for the everyday responsibility of leading the alliance;
- Determine the decision-making process and who must sign off;
- Conduct an orientation meeting with everyone involved from both sides;
- Identify a champion: the person who has the “ear of someone upstairs"; and because we want to give you more than we promised, here is an extra step,
- Identify and track relevant success measures.
For this last one, we did a little research and found the Leadership Post article, “Successful Strategic Alliances: How to create a mutually agreeable measure of success.” Specifically, writers Andrew Brown and Phill Hogg recommend establishing strategic, revolving, relationship and customer measures jointly.
Ultimately, strategic alliances offer opportunities for growth and market expansion that one company cannot secure alone.