Viewpoints on Strategic Alliances

Institutionalizing Alliance Skills: Secrets of Repeatable Success (1997)

By John R. Harbison and Peter Pekar, Jr. Phd

This Strategic Alliances Viewpoint, the third in a series, focuses on the tools and techniques that contribute to a successful institutionalized alliance capability. The discussion is based on the findings of a 1997 BA&H survey of 40 major companies and covers:

· The rationale for institutionalizing
· Pitfalls to avoid
· Building blocks to successful institutionalization
· Implications for management: building centers for alliance excellence

BA&H's 1997 survey revealed a wide gap in ROI between experienced and less-experienced alliance companies: successful multi-alliance companies such as Hewlett-Packard, Xerox, IBM, BellSouth, and Ford often earn five times the ROI of less-experienced companies. The key to achieving repeatable alliance success is to capture and disseminate learning about alliances through an institutionalized capability. BA&H has developed a best practice approach, which provides the necessary rigor and discipline to develop an institutional alliance capability.

First, companies must avoid the following traps or "roads to nowhere":

· Ad hoc improvisation: learning through trial-by-fire
· Send for the Lone Ranger and Tonto: relying on deputies
· The ivory tower syndrome: creating a citadel of alliance thinkers
· Not-invented-here complex: failing to learn from others
· One flavor fits all: failing to select the right alliance structure

Avoiding the "roads to nowhere" is not enough to ensure success: critical building blocks must be in place. In companies that have developed an institutionalized approach, procedures are normalized, there is a dedicated staff with a high degree of sharing, and a repository of knowledge is maintained for future use. There are many variations to how companies have sought to build an institutional alliance capability: however, regardless of the process, the following building blocks must be in place:

· Best practice capture
· Process discipline
· Dissemination of best practices
· Emphasis on training
· Organizational solutions and embedding

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