Alliances are an increasingly attractive means of managing risks and resources and raising funds in the present financial market. So what makes a company an attractive potential partner? Obviously companies that have had a run of public ‘failures’ are unlikely to be at the top of anybody’s list of potential partners unless they occupy a dominant position in the marketplace. It’s in the nature of people to want to shun failures and back ‘winners’, whether or not either label is deserved.
Other than having a reputation as a winner, what other factors are going to make a company a more attractive alliance partner? To answer this question we recently analysed comments made by hundreds of respondents to Silico Research’s partnering surveys to see what factors make companies attractive partners. Overwhelmingly respondents indicated that a company’s expertise is a critical factor when deciding to partner with another company, as are the finance and resources being offered. High value is also placed on the strategic fit of the companies involved and the credibility one company can give to another. Other factors highly valued are good communication skills, honesty and an openness to sharing knowledge. Companies that are swift and transparent in making decisions are also favoured as are those who have a good alliance management infrastructure in place and a consistent and strong involvement of senior management in the alliance. What respondents did not appreciate were partners trying to impose their culture and ways of working and the going back on promises.
A lot of resources are spent looking for partners and judging their suitability. Companies who can demonstrate their integrity, good communication skills, ability to share knowledge and work effectively in a team will score the highest marks when it comes to partners of choice.
Where alliance managers are situated within a company is key to the success of alliance management and outcome. Research by Silico indicates that companies where alliance managers are located within autonomous alliance management departments are more successful in guiding and nurturing partnerships than those with alliance managers attached to business development or other departments.
Alliance managers based in autonomous departments have several advantages. Firstly, the department is dedicated to alliance management which signals to the outside world the value a corporation attaches to alliances and their welfare. Secondly, the existence of the department provides the managers with a greater possibilities for sharing knowledge and experience with others involved in alliance management. It also gives them the organisational authority to reach across divisions and hierarchies and ask for resources to support alliance efforts.
Crucially alliance managers working within a dedicated alliance department are able to assign the building of relationships the highest priority and act as an independent bridge between their own organisation and that of their partner. If attached to other departments an alliance manager can find their partnership building efforts competing with other departmental interests. Alliance managers attached to business development departments, for example, may be pressured to sign the best deal for the least money which can undermine trust and the ability to generate good relationships for long-term success.
While the existence of a dedicated alliance management department provides for the chance for more positive alliance outcomes, how well it functions and the success it achieves will depend on the degree to which it is integrated within the organisation as a whole. Alliance management teams that sit on the periphery and are less integrated and connected to senior management are less likely to succeed in their objectives than those whose departments are given a central and equal footing with other parts of senior management.