The risks in partnering

We came across an interesting posting on On Startups setting out the arguments why partnering is not a good idea for startups. We are not convinced by the case but Advice on Partnering with the Big and Powerful: Don’t makes an interesting read for alliance professionals none-the-less.

Partners matter to NHS

World Class Commissioning has become the latest buzz phrase in the world of Primary Care Trusts (PCTs). As the main commissioners of healthcare, PCTs are at the forefront of a new Department of Health initiative to improve the commissioning process within the NHS. As part of the drive to implement World Class Commissioning, PCTs are in the middle of a review of their commissioning abilities. This is expected to be complete by March 2009.

One element of the review is an assessment of the partnering skills of PCTs. To this end the Department of Health recently hosted a short online survey to gather the views of key local stakeholders in the NHS. The survey respondents were asked to rate their PCTs, on a scale of one (strongly disagree) to six (strongly agree), on the six following statements:

We recognise the PCT as the local leader of the NHS

The PCT has a strong influence on our decisions and actions

The PCT is an effective partner in delivering health and well-being improvements for the local population

The PCT proactively shapes the health opinions and aspirations of the local population

The PCT proactively engages my organisation to inform and drive strategic planning and service design

The PCT proactively engages clinicians to inform and drive strategic planning and service design

Each PCT nominated between 18 and 63 candidates from 18 categories of partners, providers and key opinion formers to participate in the survey. This included contacts from local patient forums, general practitioners, hospitals, voluntary and private sector providers, community carers, the local council, MPs and the local press.

Data from the survey will be amalgamated with other material, such as PCTs’ strategic and financial plans, self-assessment and self certification. This will form the basis for scoring PCTs across 11 competency skills. PCTs performing badly will be ranked level one, and those doing well level four. In July, at the start of the review process, the PCT network predicted that few PCTs would score above one or two out of four for their competency skills, including partnership management.

One problem we foresee with the survey design is the fact that the survey’s sample population was picked by the PCTs rather than on a randomised basis. With the best will in the world it is hard to see how some might not have been tempted to game the system. This will have repercussions for the results.

Getting to the bottom of alliance failure rates

Nearly fifty percent of alliances ‘fail’. A recent article by Jonathan Hughes and Jeff Weiss in the Harvard Business Review put the figure as high as between 60% and 70%.¹ We can’t help feeling that an alliance manager presiding over an alliance portfolio with this degree of failure would rapidly lose their job.

Do alliances really fail in such large numbers? Actually no. Recent research by Silico Research suggests that in fact just about a quarter of alliances significantly fail to match the main expectations of one or both participating organisations. This is a substantially lower failure rate than put forward by many consultants for alliances in general. Our analysis is based upon the aggregation of data from multiple respondents to a number of surveys it has conducted to assess the health of various alliances.

The confusion arises because questions asking respondents to rate the success of an alliance out of ’5′ or ’7′ are treated as categorical with only the maximum possible rating being treated as a ‘success’. On this basis an alliance that a respondent rates as, for example, ’6′ out of ’7′ is treated as a ‘failure’. That can’t be right.

So what to do? We’d suggest two solutions to this ‘problem’ for those interested in determining the success or failure of a set of alliances. First, if you need to use a scalar question then group responses together on either side of the mean rating (typically ’5′ on a seven point scale) so that all ratings of 1-4 are treated as a failure and all ratings of 6-7 are treated as a ‘success’. Alternatively, you could simply ask the respondents if the alliance has failed ‘yes’ or ‘no’. Our hunch is that this type of question would generate a far, far lower failure rate than the high figure normally quoted by many consultants.

1. Jonathan Weiss and Jeff Weiss, “Simple rules for making alliance work”, Harvard Business Review, November 1 2007.