The Oxford English Dictionary defines a myth as ‘a widely held but false idea’. There are a number of alliance myths or misconceptions that are holding back alliance professionals and hindering their collaboration efforts. Some of the more common ones I have found are discussed below.
Myth #1 – Collaboration is an Unnatural Act
This point of view most often leads us into a philosophical consideration of the nature of humanity itself (Is man naturally good or bad? Is he naturally disposed towards collaboration or competition?). The argument supporting this assertion is founded on the idea that since all natural resources are by definition finite, it is a ‘natural’ act to fight to secure a greater share of those limited resources for oneself rather than sharing them.
The answer from the Alliance Best Practice Ltd (ABP) research appears to be that while collaboration is very difficult for some personalities, it is extremely easy (and the interaction of choice) for others. In addition, the law of scarce resources actually acts in favour of good collaboration, since successful collaborators know that they need to offer something they have a lot of (or that costs them very little) in return for something they have a little of (or that costs them a lot to obtain).
There is also a great deal of evidence from nature itself that collaboration is not just a ‘natural’ act, but in many instances a necessary one.
Myth #2 – Alliances are About People, Pure and Simple
The essence of this view is that collaborations between companies ultimately come down to the relationship between a finite number of people, hence alliances are fundamentally concerned with whether people get along.
While it is perfectly true that chemistry is an important and catalytic element in most strategic alliances and that the Cultural dimension is important in the Alliance Best Practice framework, it is also evident from the research we have conducted that it is only one of many such important considerations. Furthermore, it is evident that in two relationships, both with an equally strong bond between the participants, the relationship with the added advantage of Commercial, Technical, Strategic and Operational alignment will have a vastly enhanced chance of success.
Myth #3 – If the Money is Good Enough, Then People Will Pretend to Get Along
This is, in a sense, the converse argument to the one above that ‘It’s all about people.’ Once again the answer is similar: although the money (or commercial return) is important, there are a whole host of other factors (actually, there are 51 other factors!) which can contribute to a successful relationship.
In fact, evidence from the Alliance Best Practice Database strongly suggests that commercial return is an effect rather than a cause of strategic alliance success, meaning that if the underlying causes are in place (all other things being equal), then increased commercial value will flow as a natural consequence.
Myth #4 – There Can be No Single Best Practice: All Alliances are Unique
It is entirely true that one cannot isolate a single common success factors (CSF), or indeed a small group of CSFs, and say with any confidence that such a small group represents best practice. In addition, it is equally true to say that all alliances are different and unique in their makeup, context, results and positioning. However, statistically it is possible to identify those CSFs that feature on a regular basis in successful strategic alliances and to identify those factors in all alliances regardless of type, intent, sector or background.
The analogy is akin to that of human DNA, in that the range and complexity of individual humans is infinite, with each one being unique. However, we now know that all humans (whatever their sex, colour, physical makeup or ethnicity) are built from a common set of DNA strands. The best practice Database maintained by ABP represents a collection of the DNA strands of strategic alliances from which many types can be observed.
Myth #5 – Alliances are Not ‘Sexy’ Business Models
A recent edition of Forbes business magazine devoted over a hundred pages to intense consideration of the alliance model, concluding with the deceptively insightful comment that ‘strategic alliances are not sexy’, meaning that mergers, takeovers, grabbing market share, beating the competition and so on are all phrases which are considered ‘sexy’ by male and female CEOs, whereas collaboration, seeing others’ point of view, ‘one plus one equals three’ and so on are seen as aspirations of non-commercially minded people.
In our experience there is a tipping point in the understanding and deployment of strategic alliance models. If a CEO can hang in there long enough with a genuinely strategic relationship, then the long-term commercial results will justify the model’s adoption. However, it is also true that those organisations that have a predominantly short-term vision for their business relationships struggle to find the stamina required to
successfully adopt a strategic alliance mindset.
This is reflected in those organisations that have stable senior executive teams rather than those that have a high degree of senior management turnover (success models include Microsoft, Cisco, Dell, Eli Lilly, Siebel and Starbucks, all of which have at one time or another had stable senior management teams prepared to take a longer-term view of business success).
Myth #6 – No Organisation is Going to Willingly Commit to a Limited Number of Partners
The argument here is that organisations will want to deal with as many organisations as possible to give them the best chance of commercial success. However, evidence from ABP research suggests otherwise.
Firstly, any organisation (of whatever size) has a limited bandwidth available in terms of people, skills, technology platforms and so on, which makes dealing with more than a handful of truly strategic partners impossible.
Secondly, the act of allying with one organisation necessarily alienates that organisation from a relationship with others. This is principally the reason why ‘alliance fortresses’ or ‘islands’ are growing, with competition developing not between individual organisations, but between competing collaborations.
Finally, ABP research shows that the commercial benefits of a successful alliance chosen with the right partner in the right sector which has a high degree of organisational intimacy between the players outweigh the alternative benefits of allying in a non proprietary manner with a large number of less intimate partners.
Myth #7 – There are Too Many Variables in Any Collaborative Relationship to Allow Meaningful Analysis
While it is true that the primary and secondary variables generated by collaborations are complex and can at times appear bewildering, organisations which have used the framework generated by the ABP research, report good results which are practical, applicable, relevant and insightful.
In part this is because what the ABP framework teaches them is in sync with their intuition. This in itself is not surprising, since the research contains systematised common sense from a large number of appropriate observations, hence it would be surprising indeed if the data were not relevant and immediately practical!