We often hear talk about mergers and acquisitions in the current economic environment. We spend minimal energy discussing strategic alliances and collaborations. The truth is that there’s a broad continuum that business leaders can use when deciding how to work with another organization. Not every strategic partnership needs to end up in a joint venture, merger, or acquisition. In fact, I would argue that often, a simple alliance between two or more organizations to work together can be just as effective while maintaining each other’s independence.
What does it mean to collaborate? One definition states, “it is a mutually beneficial, well-defined relationship entered into by two or more organizations to achieve common goals. Collaboration is the process of various individual groups or systems working together, but to a significantly higher degree than through coordination or cooperation. Collaboration typically involves joint planning, shared resources, and joint resource management.”
Another definition states that collaboration is “a process in which two or more entities work together to achieve their independent and collective interests through a joint problem-solving process.” I also like the definition of an alliance as “a union or association formed for mutual benefit, especially between countries or organizations…a relationship based on an affinity in interests, nature, or qualities…the state of being joined or associated.”
I often think the biggest mistake that leaders make is to think that business is a zero-sum game. They take the scarcity approach to their marketplace and their customers. I’ve always believed such an approach is short-sighted. One of your key responsibilities as a leader is to surround yourself with talented individuals, both internally and externally. If you can stitch together a strong network of alliances that maximizes your value chain and plays to your specific strengths, then you will increase your bottom line and grow your top line. There is power in leverage, coordination, and cooperation.
Here are some tips on how to collaborate/align effectively with one or more organizations (even your clients):
- Establish a clear “why” up front and specify the desired outcome.
- Be discerning in choosing your collaborators; conduct thorough research on your partner to ensure alignment in values.
- Know and communicate your non-negotiables.
- Establish a shared understanding of success by defining key performance indicators to monitor your ongoing progress.
- Leave no ambiguity about how the rewards of the partnership will be split.
- Be transparent with critical information and “who” is responsible for reporting ‘what” and “when.”
- Please ensure clarity from the outset regarding the rules of engagement and establish effective boundaries.
- Before you begin, establish a conflict mediation/resolution process and use it as necessary.
- Identify and leverage complementary and supplementary core competencies; Play to each other’s strengths and minimize individual partners’ weaknesses.
- Actively cultivate professional relationships; communicate effectively and frequently.
- Learn how to speak each other’s language.
- Ensure you have an exit strategy and determine the appropriate time to implement it.
- Celebrate successes (together).
I hope you investigate the potential for strategic alliances and business collaborations in your marketplace. You can establish them as loose or as tight as you deem necessary. You can form them around specific opportunities in the short term, or they can serve as a longer-term strategic initiative. You might even collaborate with friendly competitors you respect to fend off dysfunctional behavior by other market participants. The possibilities are boundless if you can grasp the concept. Silicon Valley has been using partnership ecosystems for years to accomplish remarkable things. Why not your company?