The secret of successful alliances

Strategic alliances and partnerships of all kinds are on the rise. According to the studies cited in Simple Rules for Making Alliances Work, the number of alliances has grown annually by 25 % on average since 2007. Experts estimate that companies today generate between 15 and 33 % of their revenues and value from these privileged ties.

Alliances are certainly very tempting in principle! Indeed, companies can rely on them to join forces and share resources in targeted areas, while retaining their independence in others. Companies can use alliances to reinforce their scope of action, whether they involve tangible resources, such as raw materials, technologies, etc., or intangible resources, such as image, know-how, knowledge of customers and the market, relational networks, etc.

Their appeal is nothing new. Toyota, for example, built its success upon a highly integrated network of suppliers and assemblers. Some markets, such as China, have long been known for being accessible only through the creation of joint ventures with local companies. The importance of alliances has nonetheless grown in recent times with the accelerating pace of technological innovation. In industries like multimedia, companies are almost forced to collaborate with disparate players to gain access to relevant technologies and content and stay on the leading edge of innovation.

Yet, the actual benefits of alliances often fall far short of their expected value. According to the experts, between 50 and 70 % of alliances fail! Even the largest multinationals have stumbled—and for good reason. Already, attaining objectives within a single organization isn’t easy. In alliances, goals must be achieved with people from another firm, with their own operating practices, culture and decision-making processes! That being said, years of experience have demonstrated the existence of good practices that maximize the chances of success.