Seven Elements of Successful Strategic Alliances

Strategic alliances deliver results when fundamentals are applied, as adopted by the Conference Board

from this survey of US., European and Asian Corporations for the Conference Board. (Conference Board reports 1168-96-CH and 1028)

Find the Strategic Fit For Alliance's Success- Alliances must involve

organizations whose strategies are complementary. If not, no amount of

management effort will create success.

Understand Favorable Factors- Identify the favorable factors that make the alliance

feasible: e.g. the cost/benefit analysis is positive; the alliance concerns

R&D, production or certain marketing ventures; the alliance starts out small

and builds on trust.

Identify Possible Impediments- Be aware of the impediments to successful

negotiations including conflicts over strategic motives, time horizons, or

government regulations.

Conduct Productive Negotiations- Negotiations are more effective when internal

political support is widespread throughout the company, operating managers

are involved early, and divisive topics are sent to higher level negotiation

teams.

Create the Correct Authority Structure- Control of a strategic alliance requires

careful selection and authority for a governing group, an executive

committee, and a senior manager (or management team).

Know When and How to Terminate- To foster success, the terms for

termination should not be specified in great detail. Mistrust results from

placing too much effort on legal protection.

Institutionalize Alliance Skills One of Two Ways- Recognize the way that

your organization can best institutionalize alliance skills:

-- When The Culture Supports Collaboration- Many organizations reward

collaboration. In this case, disseminate knowledge from those experienced in

alliances to those seeking to learn about alliances. There is no need for

formal training.

-- When The Culture Opposes Collaboration- Human tendency supports hierarchical

cultures which can diminish the ability to institutionalize alliance skills. In these instances,

it's best to incorporate the alliance practices into existing organizational practices rather than

introduce them as a new approach.