Note: in the text below any phrase which is underlined is a hot link to further resources.
Alliance Best Practice Ltd (ABP) has been researching best practices in alliances for 16 years and in all that time we have come across one consistent and repeating phenomena: ‘Best Practices = Best Results’. If you think about it, it makes perfect sense. Why do so many alliance executives invent their own processes and procedures when literally hundreds of alliance executives before them have done exactly the same?! Crazy right? But wait it gets even worse! When I ask alliance executives to take a simple benchmark test (it takes less than 20 minutes) to identify best practices in their own alliances, then they come up with the same result!
So the question is – Why do so few alliance managers consciously use best practices?
It turns out there a myriad of ‘excuses’ as to why executives don’t use identified best practices in their alliance programmes. Here is a sample of the reasons we usually hear:
I Didn’t Know that There was a Commonly Accepted List of Specific Best Practices
I think this one is fair enough! You can’t follow a best practice path if you don’t know that a list of statistically proven best practices exist. The problem is that the terms ‘best practice’ and ‘best practices in alliances’ have been so overused as to be almost valueless. If asked, most people would agree that they are in favour of best practices but if pushed couldn’t clearly identify what those best practices are, let alone conceive of a pragmatic and useful best practice framework that they can use in their day to day jobs. So for those people here is a link to 52 statistically proven Best Practices in Alliances. I hope it helps!
It’s my job to do this. This is why I was hired!
This one is slightly more emotive. Many recently appointed alliance executives believe (sometimes correctly) that the reason that they were hired was to develop an alliance programme for their new company. They have the misguided idea that if they don’t invent the programme themselves they will be viewed as a failure by their new organisation. There are a couple of problems with this namely: speed and appropriateness.
Speed – It takes the average alliance manager with significant experience approximately 12 months to develop a workable alliance programme. (I know because I have watched them do it many times before!). On the other hand there are multiple alliance programme designs in the Alliance Best Practice Database so why wouldn’t you take one of those and make minor tweaks to it as necessary to reflect the position of your current company? At worst it might take 1-2 months to review the tweaks and get the new programme agreed. 30-60 days versus 12 months sounds like a ‘no brainer’ to me!
Appropriateness – Most alliance VPs that I have seen have a track record of being a successful alliance manager previously. Which of course makes sense. They know the job and what’s required and they have previously hit their alliance sales target numbers consistently. Sometimes even over performing. So who better to promote to Alliance Director or VP Alliances running a number of alliance managers? The problem is of course that the two jobs are quite different and nowhere (that I can find) does either the new company or the old company run Alliance Team Leader Training Sessions. Which means that the new hire is taken on with no previous experience of: running teams, creating alliance strategy, developing alliance sales training courses, or pitching for alliance resources. In general they have no previous experience of building Organisational Alliance Capability even though, once again, various such models exist at various levels of Alliance Maturity.
Here is a link for those poor souls who would like some guidance in these areas! (Link to Alliance Capability and Alliance Team Leader Training Courses).
Alliances are Unique and Don’t Have Common Characteristics
I’m afraid that ABP research debunked this myth long ago. There are clearly common factors in commercially successful strategic alliances including (but not limited to): senior executive support, clear vision, joint go to market model, collaborative rapport on both sides, existence of joint business value propositions, business to business operational alignment, partner enable ment resources, trust, collaborative attitude from executing personnel, etc. In fact there are 52 Common Success Factors which have been idenftified by our research in the last 16 years which appear in successful alliances.
Best Practices are for the Classroom
There seems to be an impression in some alliance sales executives minds that talk of best practice is appropriate only for classroom exercises. Nothing vould be further from the truth! Our research over the last 16 years, looking at over 800 alliance relationships in detail, shows (without a doubt) that those alliances with more best practices present perform better commercially than those with relatively less best practices. In other words the higher the best practice ‘score’ the higher the level of alliance sales. Also by implication alliance managers that follow a deliberate policy of employing best practices in their alliances perform better than those that do not.
We Have an Approach which is Better than Best Practice
This is essentially the argument between ‘open’ and ‘proprietary’ methodologies and approaches. A typical proponent of the proprietary school of thought is Oracle which would argue that the time and effort that they have expended in designing and deploying their alliance approach is better than a best practice approach. So lets just consider this argument for a second. What Oracle appears to be saying is that the end result of their alliance thinking is superior to the combined alliance thinking of (for example): IBM, HPE, SAP, Microsoft, Salesforce, Cisco, ServiceNow, Apple, Capgemini, Accenture, Fujitsu, Atos and AMD combined? It also suggests that Oracle wants partners to use ‘their’ alliance approach. Which is fine if they can dictate to partners which approach should be used. But what happens when they wish to partner with one of the large companies listed above? Is it feasible that IBM and more so Microsoft would adapt their alliance partnering process to accomodate Oracle ? Or would they expect the reverse? i.e. that Oracle accomodates the partner’s approach to partnering. This issue is considered in an ABP reserach paper called The Value of an ‘Open’ Alliance Methodology.
Benchmarking is a Flawed Strategy
ABP is a strong supporter of the strategy of benchmarking. Which is to say measuring the things critical to success in alliances and comparing your results with the market leaders in your industry segment. However, there is a view that conducting a benchmarking exercise is a useless waste of time because (the argument goes) no two organisations are sufficiently similar to allow the comparison of results to matter. ABP would beg to differ (See for example In Defence of Benchmarking). Our view is that the general characteristics of successful aliances can be isolated, identified and investigated through a conscious and systematic benchmarking exercise. So for example we would argue that Trust is an important element in strategic alliances. We would further argue that the level of Trust in alliance relationships can be measured and that in such measurement there will be winners and losers. The losers can learn a lot from what the winners did (and do) to develop and grow Trust in their alliance. (See for example The Value of Trust in Alliances).
There is No Such Thing as Universal Best Practice in Alliance Sales
At last! A statement we can agree with! ABP would agree that there is no universal single best practice which works in all situations regadless of: geography, business sector, alliance maturity, organisational maturity, external market factors, etc. However, we would argue that there are a consistent and repeating set of best practices which (by observation) show up in commercially successful alliance relationships. We would further argue that they show up so often as to be regarded as statistically relevent, which means that their existence cannot be explained by fluke or luck. (For Further Information on these best practices see for instance the annual report Best Practices in Alliance Sales).
Best Practice Has no Relevance to Alliance Sales
This point was alluded to above in the section ‘Best Practices are For the Classroom’. However, it so crucial to the value of following an alliance best practice approach that it bears repetition here. So let us be clear in our assertion, which is: ‘Following a Best Practice Approach will Lead to an Increase in Alliance Sales‘. This point has been validated in every single instance of alliances which we have examoned over the last 16 years, and all the research and anecdotal conversations that we have with practising alliance sales managers, directors and vice presidents bear out this mantra. What is true is that a woolly and indistinct definition of best practices in alliances has helped to obscure the critical connection that exists between statistically provable best practices and alliance sales performance. (See for example Best Practices in Sales – A 100% Success Rate).
You Can’t Prove that Best Practices Work
On the contrary you can prove that they work and you can prove it very quickly and easily. For example, take a selection of your alliance relationships (some performing better than others of course); then assess the existence and quality of a given set of alliance best practices and score the result. Low score = Less best practices, High Score = More best practices. What you will notice immediately is that those relationships with higher scores deliver higher levels of alliance sales and value to your company. One of our clients took this approach even further and commissioned ABP to conduct an alliance best practice assessment on 13 of their 24 global strategic partnerships. What they dicovered was fairly typical which was that some alliances performed better than others, in line with their best practice ‘score’. What they did then was to follow a determined and deliberate best practice route with those 13 relationships and continue with ‘business as usual’ with the other 11 relationships. What they discovered was that the best practice alliances outperformed the non best alliances during the next 12 month period by a factor of 130% (on average). Same company, same products, same markets, same trading conditions; the only difference in approach was the adoption ob best practice as compared with business as usual. For a fuller explanation of the implications of the initiative see the following case study – Best Practice Versus Business As Usual.
A Best Practice Programme Costs Too Much
In fact the reverse is true, a best practice programme costs (on average) 40% less than a business as usual programme. The savings come from the fact that the best practice programme is utilising already developed and proven to be successful approaches, tools and methodologies which saves time and effort. Which means that companies using a best practice approach get to the money quicker and hance spend less money on gettting there. See for example The Business case for a Best Practice Programme.
We Are Not Mature Enough to Consider an Alliance Best Practice Programme
This is a curious objection in that it seems to suggest that companies need a certain level of maturity before they can take advantage of best practices. Again (in our experience) the reverse is true. A company which is starting out on its alliance programme journey can accelerate progress and mitigate risk by adopting and adapting already developed best practices in terms of alliance: documentation, models, structure, strategy, contracts, remuneration, incentives, agreements, etc. For further information please see The Three Stages of Organisational Alliance Maturity.