Alliance of one
Companies are changing as the world evolves. The current downturn, or whatever you want to call it, has altered the employment of millions of people. To remain nimble, and to keep fixed costs low, companies of all sizes are employing contractors for projects. In turn, contractors are creating companies of one. Then to be successful, they create alliances of one.
Small businesses create more jobs. Over the past 15 years, small businesses have created over 93 percent of the new jobs. Everyone has different definitions of small businesses. The SBA typically calls companies with less than 500 employees as small.
Here in Colorado, 99.9 percent of the companies employ less than 500 people. Colorado has almost 255,000 companies, according to Reference USA. In Colorado over 90 percent of the companies, employ less than 20 people. Of those quarter of a million companies, 11 percent are home based, and one-third are 1-4 employee businesses. When a company starts as one person, and then grows, they create their own alliances through a network of partnerships.
Empire of One
Several years ago, Tom Frey, world-renowned futurist with the DaVinci Institute and author of Communicating with the Future, coined the term Empire of One. He forecasted that people would create one-person business ‘empires’ that rely on contractors for various projects rather than employees, and a person’s resume would be about projects and not jobs.
Look at the movie industry. Here an alliance of people – actors, directors, stunt people, camera operators, make up artists, set designers, musicians, etc. – comes together for a common good. It is dependent upon who knows you and your reputation. A corporation or LLC is formed for the movie. Think of each movie as a start up company.
The funding is raised, the people come together, the movie is distributed, proceeds are dispersed, and the corporation is dissolved. Some movies take 10 years, e.g. Avatar, while others may take less than 6 months. Each participant in the movie does their work, and then moves on to the next one. They live on their reputation, who they know and most importantly, who knows them.
This model works in the construction industry with the various trades people. If you show up and do quality work, you get more work. People in the know recommend you, and you recommend your friends that you can rely upon. Your reputation is dependent upon those who recommend you and your advocates.
For the international consultant, having connections with other companies is easier than having company employees in different countries. Then one person helps their clients grow around the globe by using a set of trusted advisors.
This model is being used by an assortment of businesses. Companies use talent as they need it, and then move on. Employees are not hired as full time workers. Instead, temporaries work hard, produce great work, but may set their own schedules. This allows for flextime with family, vacations, or even multiple jobs/projects simultaneously.
The hiring company wins as they don’t have the long term fixed overhead of a full time employee. The hourly costs can be higher as a variable expense, but the fixed costs or project costs for the larger corporation are kept low and under control.
For the worker this presents some issues. First, they are only as good as their last project. They must continually produce quality work. As a corporation of one, other companies must know you exist and how to work with you, which requires a strong level of trust. The worker must build an alliance of trusted partners to help them succeed.
Your Own Alliance of One
For your established business of one, you must create your own alliance of people to service your customers. The first step is to identify your customer. Who are they? What other products and services do they buy? Where do they live, work and play? From whom do they buy?
Answering these questions gives you a list of companies for your alliance. Many of these members may also be companies of one. Your success is dependent upon the success of each member of your consortium of companies. This network casts a wider net across your potential marketplace.
Everyone finds new customers.
You have identified your members and everyone agrees to work for the common good. Many times these informal alliances are your network. To focus your effort, narrow your strategic alliance group to less than 10, or maybe even 5 members.
Establish your rules of engagement. This starts with you and your alliance partners stating your long-term objective for why they are in this coalition. These are the conditions of success. Once stated, everyone focuses on the success of each other.
Determine how you might compensate each other for leading business to them. This can be different for each member of your alliance. For example, a CPA or banker cannot ethically receive monetary compensation for a business referral. Obviously, you can give your CPA a new account, but that is not always possible. I have a banker friend, who is thrilled when I donate money to his favorite charity, a breast cancer charity. Whatever you decide, discuss it with your alliance partners.
Your success depends upon open and honest communication within your alliance. Problems arise, and how you deal with them determines your income.
Globally, we are moving towards an empire of one, a business of one, a corporation of one and from there, an alliance of one. The world is going this way.
We are small companies that can do some tasks very well, and then using other companies of one to do the other work. We now use contractors extensively, who rely upon their reputation to make us both succeed. This allows our customers to rely on one throat to choke, and the alliance of one.
Create your own alliances today. I have.
George Tyler, a serial entrepreneur, has developed the only consulting practice that focuses exclusively on strategic alliances and the implementation of the powerful Alliance CompassTM to accelerate global revenue growth.
Having spent over 25 years developing alliances, George created the Alliance Compass to help companies serve their customers with strategic alliance partnerships. Using his assessment tools and the Alliance Compass, companies form strategic alliances that increase their business. His experience in marketing, sales and management has lead to successful strategic alliances for hundreds of companies.
George has started several companies that grew because of well-designed strategic alliances and partnerships within Fortune 500 companies. His alliances have spanned the globe. As an award-winning speaker, he has spoken to audiences around the world, and provided guidance to large and small corporations. Call today for help in growing your company.
Contact information: George@3rdEagle.com, LinkedIn.com/GeorgeTyler, Twitter@GeorgeTyler, 303.482.7583