The 1990s was termed the “Decade of the Strategic Alliance” by Fortune Magazine. As our economy grows, partnering is becoming the weapon of choice for successful companies.
Strategic partnering has proven to be one of the most powerful business tools for dealing with fast-changing markets, technologies and customers, and the Internet has hurried the trend along.
Smart alliances involve matching different skills and assets, while at the same time, cooperating toward achieving goals for both partners.
Strategic Alliances - A Frame of Reference
Vince Wolfington, former chairman of the board at Carey International and chairman emeritus, wrote the following in preparation for a recent panel discussion on strategic alliances in the limousine industry.
I. THE BACKGROUND
“Go It Alone” is not a key to success anymore. Success requires knowing how to connect the dots and how to connect the people in order to gain the benefit derived from a worthwhile partnership.
The challenge is simple: Successful strategic alliances are easier said than done. Henry Ford said it best, “coming together is a beginning,” “keeping together is progress,” “working together is success.” Know thyself - know thy partner. Commitment and consistency are necessary. When one partner enters a relationship with another they are inviting other people and organizations to rely on them. It is important to follow through and deliver.
II. A FRAME OF REFERENCE TO MEET THE CHALLENGE
A. Successful strategic alliances require clear goals and objectives. B. Successful strategic alliances require smart partnership. C. Potential strategic alliances are all around you.
III. STRATEGIC ALLIANCES - CLEAR GOALS & OBJECTIVES
The Primary motivation for an alliance is a desire to grow revenue by additional sales and to grow the bottom line through greater efficiencies of operation. To benefit from an alliance, it is important to know what you want to get out of it. The following typical objectives can be used as a guideline:
(1)Expand access to markets and suppliers by gaining contacts, connections and channels of communication beyond those you own. (2)Expand reach to resource, talents and strengths of other companies and organizations, which allow you to leverage on yours and compensate for shortcomings. (3)Minimize obstacles to successful achievement of goals by converting potential indifference or adversarial entities into allies.
IV. SUCCESSFUL STRATEGIC ALLIANCES AND SMART PARTNERSHIPS
An alliance will not work unless there is a “will” and a “discipline” to make a serious commitment to treat your alliance partner or partners’ concerns as importantly as you treat your own.
“Smart Partnerships” are made when the players develop an insight and genuine empathy for a partner’s needs and honestly strive to meet them. Here are some of the attributes of smart partnerships:
(1) An understanding that the self-interest of partners is served by pursuit of common goals. There is a need for partners to understand one another and to share information in enough depth to enable each partner to understand what is required to manage the relationship for everyone’s mutual benefit. (2) Personal chemistry enhances collaboration versus competitiveness. It is important that the partners embrace the idea of teamwork, which especially in difficult times, is critical to assure cooperation and mutual support. (3) Service and pricing have to be truly compatible and tailored to the common objective. (4)Creativity, compromise, flexibility and openness are critical to a successful partnership. (5) Mutuality and fairness are essential so everyone benefits from the partnership. One partner cannot use the relationship as an opportunity to exploit or take advantage of the other.
V. DISCUSSION OF POTENTIAL STRATEGIC ALLIANCES
All businesses are potentially at the center of a meaningful alliance. Think about the other businesses which your company touches every day. With some imagination and creativity you will be able to identify some interesting strategic alliance opportunities.
As long as you understand your goals and objectives and are committed to do what it takes to have a smart partnership, you are prepared to qualify which opportunities represent realistic prospects.
Some examples include the following: (1) Customers: Turn customers into partners that create value together. A happy customer who comes back again and again is likely to become a channel for new customers through referrals and recommendations to friends, co-workers and family members. (2) Travel industry associates and other business and industry associations, are potential alliance partners. The following business-to-business approaches can establish the basis for a partnership. A) Co-branding: where companies with different types of service join forces to create a remarkable service. B) Association partnerships: where competing companies work together to promote initiatives that will benefit the industry under the premise that a rising tide lifts all ships. C) Civic partnerships: where companies from various industries work together to promote the economic health of the community. (3) Governments: good corporate citizenship can pay dividends. The Chamber of Commerce, the mayor’s office and the like need help with tourism in your area. Get involved – participate in “fam” trips and the like.
For more on this story, please see the January issue of LCT.