Successful Strategic Alliances: How to turn around alliances when things go wrong

Bad things do happen to good alliances. So how you can minimize the risk of alliance failure and turn around alliances when they show signs of breaking down.Understand why alliances fail. Alliances typically fail for a combination of three reasons. The first reason is lack of interest. If an alliance isn’t connected in a meaningful way to a long-term strategic goal, and therefore has the active support from senior management, the momentum and resources to sustain it will inevitably be re-deployed. Aeroplan is in the enviable position of managing dozens of successful national and international alliances. The core reason, according to the company’s Vice-President of Partnerships, David Houston, is that “Aeroplan works hard with alliance partners to constantly demonstrate how we help move the needle on their priorities — whether that’s building revenue, generating innovation or getting a better understanding of key markets.” The second reason alliances fail is far more common: there’s a lack of agreement on ways to measure and validate alliance success. When this happens, champions from all participating organizations will distance themselves from the partnership because they are not confident they can quantify or justify the resources required to meet their alliance obligations. Finally, the most common reason that alliances fail is because the complex relationships and shared commitments are mismanaged. This happens because the time and effort required to sustain the partnership is drastically underestimated. As a result, partners don’t build an adequate infrastructure — e.g. teams with well-defined responsibilities, processes and budgets — to identify points of failure.

Identify failure points. There are several common signs that alliance champions and managers should always watch for as indicators that the alliance is fraying at the edges. The first is interpersonal disengagement. For instance, people consistently avoiding calls or emails without an apparent reason. According to Greg Ferris, VP, Business Development at Delego Software, which is always managing over 40 partners, “When alliance partners start shying away from revealing how they feel about the business relationship, it is time to dig deeper because there is a problem.” The second sign occurs at the team level. Such decay shows itself when meetings with partners are postponed, cancelled or become dysfunctional sessions where the focus is solely on addressing irrelevant issues and process minutia. The third is organizational disengagement — when the obligations, as outlined in the partnership agreement, are frequently ignored, neglected or openly ridiculed by those who had supported the alliance.

Get the alliance back on track. Regardless of whether the alliance has gone dormant or has completely disintegrated, getting it back on track is not a “grass roots” initiative. That is, garnering support from previous alliance leaders or stakeholders is not enough for partner companies to renew commitment to the alliance. In fact, the team who had held responsibility for implementing the alliance often needs to be refreshed in order to allow the alliance to be thought of as newly credible. According to Simon Brightman of the Toronto-based Product Accelerators, “Product innovation can serve as an important focal point that allows companies to re-direct energies on a common goal with very tangible outputs. While this won’t by itself turn around an alliance, it can get key players back to the table.” Finally, to achieve a renewed alliance means that the partners need to adopt a more structured approach to governance.

Install a new governance structure. Once you have the alliance back on track, it requires an enhanced level of administration to sustain it. That means introducing a revitalized governance structure to oversee its management.That structure should include an Executive Steering Committee, Reporting Committees and new Alliance Managers. The Executive Steering Committee consists of senior executives from all partner companies — whose joint mandate is to ensure the health of the strategic alliance. This committee should include key stakeholders such as the alliance champions, alliance managers and Chairs of the Reporting Committees. In tandem, Executive Steering Committees provides strategic direction and operational oversight to the alliance, evaluate their performance, recommend corrective action, and act as the point of escalation for issues that cannot be resolved at the management level. At the same time, Reporting Committees each have their own mandate such as marketing, operations or technology integration. These committees are responsible for keeping the Executive Steering Committee informed of their progress as well as escalating any issues when teams cannot successfully address an impasse. The final lynch pin for a renewed alliance structure is the alliance manager. These professionals are responsible for the day-to-day management of the alliance. They are the glue between the Executive Steering Committee and the Reporting Committees. As such they identify early warning signals and failure points. They also develop ways to address the reasons behind why an alliance is breaking down.

Successful Strategic Alliances: How to turn around alliances when things go wrong

Bad things do happen to good alliances. So how you can minimize the risk of alliance failure and turn around alliances when they show signs of breaking down.Understand why alliances fail. Alliances typically fail for a combination of three reasons. The first reason is lack of interest. If an alliance isn’t connected in a meaningful way to a long-term strategic goal, and therefore has the active

support from senior management, the momentum and resources to sustain it will inevitably be re-deployed. Aeroplan is in the enviable position of managing dozens of successful national and international alliances. The core reason, according to the company’s Vice-President of Partnerships, David Houston, is that “Aeroplan works hard with alliance partners to constantly demonstrate how we help move the needle on their priorities — whether that’s building revenue, generating innovation or getting a better understanding of key markets.” The second reason alliances fail is far more common: there’s a lack of agreement on ways to measure and validate alliance success. When this happens, champions from all participating organizations will distance themselves from the partnership because they are not confident they can quantify or justify the resources required to meet their alliance obligations. Finally, the most common reason that alliances fail is because the complex relationships and shared commitments are mismanaged. This happens because the time and effort required to sustain the partnership is drastically underestimated. As a result, partners don’t build an adequate infrastructure — e.g. teams with well-defined responsibilities, processes and budgets — to identify points of failure.

Identify failure points. There are several common signs that alliance champions and managers should always watch for as indicators that the alliance is fraying at the edges. The first is interpersonal disengagement. For instance, people consistently avoiding calls or emails without an apparent reason. According to Greg Ferris, VP, Business Development at Delego Software, which is always managing over 40 partners, “When alliance partners start shying away from revealing how they feel about the business relationship, it is time to dig deeper because there is a problem.” The second sign occurs at the team level. Such decay shows itself when meetings with partners are postponed, cancelled or become dysfunctional sessions where the focus is solely on addressing irrelevant issues and process minutia. The third is organizational disengagement — when the obligations, as outlined in the partnership agreement, are frequently ignored, neglected or openly ridiculed by those who had supported the alliance.

Get the alliance back on track. Regardless of whether the alliance has gone dormant or has completely disintegrated, getting it back on track is not a “grass roots” initiative. That is, garnering support from previous alliance leaders or stakeholders is not enough for partner companies to renew commitment to the alliance. In fact, the team who had held responsibility for implementing the alliance often needs to be refreshed in order to allow the alliance to be thought of as newly credible. According to Simon Brightman of the Toronto-based Product Accelerators, “Product innovation can serve as an important focal point that allows companies to re-direct energies on a common goal with very tangible outputs. While this won’t by itself turn around an alliance, it can get key players back to the table.” Finally, to achieve a renewed alliance means that the partners need to adopt a more structured approach to governance.

Install a new governance structure. Once you have the alliance back on track, it requires an enhanced level of administration to sustain it. That means introducing a revitalized governance structure to oversee its management.That structure should include an Executive Steering Committee, Reporting Committees and new Alliance Managers. The Executive Steering Committee consists of senior executives from all partner companies — whose joint mandate is to ensure the health of the strategic alliance. This committee should include key stakeholders such as the alliance champions, alliance managers and Chairs of the Reporting Committees. In tandem, Executive Steering Committees provides strategic direction and operational oversight to the alliance, evaluate their performance, recommend corrective action, and act as the point of escalation for issues that cannot be resolved at the management level. At the same time, Reporting Committees each have their own mandate such as marketing, operations or technology integration. These committees are responsible for keeping the Executive Steering Committee informed of their progress as well as escalating any issues when teams cannot successfully address an impasse. The final lynch pin for a renewed alliance structure is the alliance manager. These professionals are responsible for the day-to-day management of the alliance. They are the glue between the Executive Steering Committee and the Reporting Committees. As such they identify early warning signals and failure points. They also develop ways to address the reasons behind why an alliance is breaking down.

Successful Strategic Alliances: How to turn around alliances when things go wrong

Bad things do happen to good alliances. So how you can minimize the risk of alliance failure and turn around alliances when they show signs of breaking down.Understand why alliances fail. Alliances typically fail for a combination of three reasons. The first reason is lack of interest. If an alliance isn’t connected in a meaningful way to a long-term strategic goal, and therefore has the active support from senior management, the momentum and resources to sustain it will inevitably be re-deployed. Aeroplan is in the enviable position of managing dozens of successful national and international alliances. The core reason, according to the company’s Vice-President of Partnerships, David Houston, is that “Aeroplan works hard with alliance partners to constantly demonstrate how we help move the needle on their priorities — whether that’s building revenue, generating innovation or getting a better understanding of key markets.” The second reason alliances fail is far more common: there’s a lack of agreement on ways to measure and validate alliance success. When this happens, champions from all participating organizations will distance themselves from the partnership because they are not confident they can quantify

or justify the resources required to meet their alliance obligations. Finally, the most common reason that alliances fail is because the complex relationships and shared commitments are mismanaged. This happens because the time and effort required to sustain the partnership is drastically underestimated. As a result, partners don’t build an adequate infrastructure — e.g. teams with well-defined responsibilities, processes and budgets — to identify points of failure.

Identify failure points. There are several common signs that alliance champions and managers should always watch for as indicators that the alliance is fraying at the edges. The first is interpersonal disengagement. For instance, people consistently avoiding calls or emails without an apparent reason. According to Greg Ferris, VP, Business Development at Delego Software, which is always managing over 40 partners, “When alliance partners start shying away from revealing how they feel about the business relationship, it is time to dig deeper because there is a problem.” The second sign occurs at the team level. Such decay shows itself when meetings with partners are postponed, cancelled or become dysfunctional sessions where the focus is solely on addressing irrelevant issues and process minutia. The third is organizational disengagement — when the obligations, as outlined in the partnership agreement, are frequently ignored, neglected or openly ridiculed by those who had supported the alliance.

Get the alliance back on track. Regardless of whether the alliance has gone dormant or has completely disintegrated, getting it back on track is not a “grass roots” initiative. That is, garnering support from previous alliance leaders or stakeholders is not enough for partner companies to renew commitment to the alliance. In fact, the team who had held responsibility for implementing the alliance often needs to be refreshed in order to allow the alliance to be thought of as newly credible. According to Simon Brightman of the Toronto-based Product Accelerators, “Product innovation can serve as an important focal point that allows companies to re-direct energies on a common goal with very tangible outputs. While this won’t by itself turn around an alliance, it can get key players back to the table.” Finally, to achieve a renewed alliance means that the partners need to adopt a more structured approach to governance.

Install a new governance structure. Once you have the alliance back on track, it requires an enhanced level of administration to sustain it. That means introducing a revitalized governance structure to oversee its management.That structure should include an Executive Steering Committee, Reporting Committees and new Alliance Managers. The Executive Steering Committee consists of senior executives from all partner companies — whose joint mandate is to ensure the health of the strategic alliance. This committee should include key stakeholders such as the alliance champions, alliance managers and Chairs of the Reporting Committees. In tandem, Executive Steering Committees provides strategic direction and operational oversight to the alliance, evaluate their performance, recommend corrective action, and act as the point of escalation for issues that cannot be resolved at the management level. At the same time, Reporting Committees each have their own mandate such as marketing, operations or technology integration. These committees are responsible for keeping the Executive Steering Committee informed of their progress as well as escalating any issues when teams cannot successfully address an impasse. The final lynch pin for a renewed alliance structure is the alliance manager. These professionals are responsible for the day-to-day management of the alliance. They are the glue between the Executive Steering Committee and the Reporting Committees. As such they identify early warning signals and failure points. They also develop ways to address the reasons behind why an alliance is breaking down.

Successful Strategic Alliances: How to turn around alliances when things go wrong

Bad things do happen to good alliances. So how you can minimize the risk of alliance failure and turn around alliances when they show signs of breaking down.Understand why alliances fail. Alliances typically fail for a combination of three reasons. The first reason is lack of interest. If an alliance isn’t connected in a meaningful way to a long-term strategic goal, and therefore has the active support from senior management, the momentum and resources to sustain it will inevitably be re-deployed. Aeroplan is in the enviable position of managing dozens of successful national and international alliances. The core reason, according to the company’s Vice-President of Partnerships, David Houston, is that “Aeroplan works hard with alliance partners to constantly demonstrate how we help move the needle on their priorities — whether that’s building revenue, generating innovation or getting a better understanding of key markets.” The second reason alliances fail is far more common: there’s a lack of agreement on ways to measure and validate alliance success. When this happens, champions from all participating organizations will distance themselves from the partnership because they are not confident they can quantify or justify the resources required to meet their alliance obligations. Finally, the most common reason that alliances fail is because the complex relationships and shared commitments are mismanaged. This happens because the time and effort required to sustain the partnership is drastically underestimated. As a result, partners don’t build an adequate infrastructure — e.g. teams with well-defined responsibilities, processes and budgets — to identify points of failure.

Identify failure points. There are several common signs that alliance champions and managers should always watch for as indicators that the alliance is fraying at the edges. The first is interpersonal disengagement. For instance, people

consistently avoiding calls or emails without an apparent reason. According to Greg Ferris, VP, Business Development at Delego Software, which is always managing over 40 partners, “When alliance partners start shying away from revealing how they feel about the business relationship, it is time to dig deeper because there is a problem.” The second sign occurs at the team level. Such decay shows itself when meetings with partners are postponed, cancelled or become dysfunctional sessions where the focus is solely on addressing irrelevant issues and process minutia. The third is organizational disengagement — when the obligations, as outlined in the partnership agreement, are frequently ignored, neglected or openly ridiculed by those who had supported the alliance.

Get the alliance back on track. Regardless of whether the alliance has gone dormant or has completely disintegrated, getting it back on track is not a “grass roots” initiative. That is, garnering support from previous alliance leaders or stakeholders is not enough for partner companies to renew commitment to the alliance. In fact, the team who had held responsibility for implementing the alliance often needs to be refreshed in order to allow the alliance to be thought of as newly credible. According to Simon Brightman of the Toronto-based Product Accelerators, “Product innovation can serve as an important focal point that allows companies to re-direct energies on a common goal with very tangible outputs. While this won’t by itself turn around an alliance, it can get key players back to the table.” Finally, to achieve a renewed alliance means that the partners need to adopt a more structured approach to governance.

Install a new governance structure. Once you have the alliance back on track, it requires an enhanced level of administration to sustain it. That means introducing a revitalized governance structure to oversee its management.That structure should include an Executive Steering Committee, Reporting Committees and new Alliance Managers. The Executive Steering Committee consists of senior executives from all partner companies — whose joint mandate is to ensure the health of the strategic alliance. This committee should include key stakeholders such as the alliance champions, alliance managers and Chairs of the Reporting Committees. In tandem, Executive Steering Committees provides strategic direction and operational oversight to the alliance, evaluate their performance, recommend corrective action, and act as the point of escalation for issues that cannot be resolved at the management level. At the same time, Reporting Committees each have their own mandate such as marketing, operations or technology integration. These committees are responsible for keeping the Executive Steering Committee informed of their progress as well as escalating any issues when teams cannot successfully address an impasse. The final lynch pin for a renewed alliance structure is the alliance manager. These professionals are responsible for the day-to-day management of the alliance. They are the glue between the Executive Steering Committee and the Reporting Committees. As such they identify early warning signals and failure points. They also develop ways to address the reasons behind why an alliance is breaking down.