How to steer clear from the high failure rate of Strategic Alliances
“Businesses used to grow in one of two ways: from grassroots up or by acquisition. In both cases, the manager had control. Today businesses grow through alliances, all kinds of dangerous liaisons and joint ventures, which, by the way, very few people understand.”
That’s what management guru Peter Drucker said in 1993 about alliances. As with many things Peter Drucker said, in this case he was also right. Even today, his quote is valid. Alliances can be dangerous endeavors and many studies show high alliance failure rates, in some cases even up to 80% failure. Considering this, would you embark on a journey knowing that you have an 80% chance (which is almost a certainty) of not succeeding? Probably not. That is exactly the problem, and it addresses Drucker’s second point: very few people really understand alliances. Opportunistically people create ad-hoc alliances, ignorant of the risks involved and ignorant on how to protect themselves from those risks.
A painful lesson
I have been there. About 20 years ago, I opportunistically jumped into an ad-hoc alliance myself. Riding on the waves of the dot.com bubble everything seemed bright and shiny and opportunities where endless. So we thought. Until, some time into the alliance, my partner called me and said that he pulled back from our joint operation. As a result, our partnership exploded and ended in a nasty business divorce with unhappy employees. Some hard and costly lessons were learned.
Looking back on that endeavor with what I know now, I would have built that partnership completely different. However, looking back might be easy, but it doesn’t solve what happened. I’d rather look forward to building the future, using the lessons from the past.
Can’t you jumpstart into successful alliances and steer clear from the failures?
Yes, you can, as long as you ensure that you know what you are doing. And there are a couple of ways to do so:
Build your skills
Build your skills. Read about alliance success and failures and apply the lessons. There are some excellent books out there that can serve as a kind of manual and will help you to steer clear of a number of common pitfalls. The book “Strategic Alliance Management”* by Brian Tjemkes, Pepijn Vos and Koen Burgers is a book that I highly recommend to use as such.
Attend an Alliance Masterclass to learn how to create successful alliances and partnerships. This practical, and proven, masterclass is available in two formats: in-company, tailored to your situation, or you can register for the class that will be held on the 12th of September, 2018, in Amsterdam.
Hire help
Hire experienced help and work with me as your alliance coach and sparring partner. I have learned many lessons and built my experience and knowledge extensively since that lesson 20 years ago. I will bring that, in combination with a critical eye and many questions, to help you to jumpstart into your alliance success and steer clear from the many pitfalls that might lead to failure.
Whatever road you choose on your alliance journey, skip the ad-hoc road and go it well prepared and/or well guided.
Originally published at www.petersimoons.com on August 21, 2018.
