Managing Global Alliances: Challenges and Best Practices for Ensuring Success
Companies should ensure their portfolio of alliances can quickly respond to changing market demands, by regularly assessing alliances’ success and disbanding any that no longer provide value. This requires creating an audit trail of these assessments so as to determine if changes need to be made or removed as appropriate.
As opposed to mergers or joint ventures, alliances require interdependence among companies who may be competitors, have different cultures, operating styles and ways of conducting their businesses – which requires taking an unconventional approach when managing these relationships.
1. Lack of Visibility
Companies looking to gain competitive edge are increasingly turning to alliances as a tool to expand market share, expand revenue potential and foster innovation. Unfortunately, if managed incorrectly alliances can quickly become drains on resources and ineffective means for meeting strategic goals.
Successful companies often employ a function dedicated to alliance activities coordination. By institutionalizing processes and systems to share best-practice knowledge and experience throughout the organization, this approach to alliance management focuses on incremental success while remaining in alignment with overall company goals and business processes.
Global alliances often face difficulties due to limited visibility into pipeline and real-time performance metrics, making value discussions with C-suite more difficult and leading to misaligning goals and missed opportunity. WorkSpan’s alliance management system offers a solution, offering teams visibility, predictability and accountability that enable strong partnerships to flourish.
2. Lack of Funding
The pandemic exposed significant weaknesses in global, regional and national capacities for pandemic preparedness and response (PPR), such as inadequate funding. Despite calls for more money being available from international funders for PPR preparedness efforts [42], their funds continue to exert significant influence over agencies, prioritisation areas selected by implementing countries, and selection processes [43].
Many relationships in business are simply transactional in nature and do not represent strategic initiatives. For example, a large client-base may want to expand its music library through partnership with Spotify; however, investing millions into this relationship wouldn’t make strategic sense.
Strategic alliances require careful management, with metrics designed not only to define business goals but also monitor progress toward them. One approach would be forming an alliance-management team which regularly assesses progress against the established metrics while notifying its leader of any concerns that arise from this partnership.
3. Inability to “Quantify” Their Efforts
Alliances require significant dedication from senior executives and their staffs, who must ensure the appropriate people are involved and that the partnership runs smoothly. Furthermore, it is imperative they gain a firm grasp on each partner’s goals and objectives and can create metrics to measure progress towards meeting those targets.
In 1902 and 1914 respectively, global partnerships like Entente Cordiale and Triple Alliance between France, Russia and Britain demonstrated how strategic alliances can alter international relations and alter power dynamics. Such alliances can enable corporations to gain access to emerging technologies at lower costs or develop new products more rapidly; furthermore they create economic value by increasing competitive advantage and strengthening financials of each organization involved.
Though some companies take great care in managing their alliances, many don’t reap all their potential benefits. With an approach utilizing scorecards as a measure of performance management and increasing success at an increased speed.
4. Inability to Have a Clear View of the Execution
Alliances provide businesses looking to expand accessing new markets or accessing superior technologies; but they can be daunting challenges, particularly when trying to implement strategies requiring cross-company alignment of people practices and procedures.
There can be challenges associated with alliances that arise from different objectives and perspectives, including control issues resulting from different perspectives in terms of objectives and perspectives. For instance, an entity acquiring essential technology might want exclusive rights over it in order to maintain visibility into future technical standards.
Another challenge associated with alliances is their changing ability to achieve desired results over time, necessitating periodic adjustments of the relationship. One solution is establishing exit strategies without derailing an alliance – such as developing an annual plan that determines expected return on investment while aligning it with product development and field execution, or setting disciplined milestone processes which are reviewed regularly.
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