Almost 10 months of work and research concluded almost anti-climatically on Thursday last week, when, in a five-minute introduction, the SMPS Foundation released my white paper on strategic alliance best practices.
Intellectually, this research proved to be one of the biggest challenges in recent years in part because I had trouble finding the “magic bullet” of success. Yet, as I dug into the concept, I realized that strategic alliances can be incredibly powerful business development resources if you plan your strategy carefully and thoughtfully — and think far beyond the “obvious” of leads and sales development.
If anything, the jury is out about whether strategic alliances result in net business gains for most AEC practices. In dozens of interviews, I asked if alliance participants tracked an increase in business from their alliance participation. The result, shockingly, is that virtually no one could see a real business volume advantage from the process.
The explanation for this apparently challenging observation, I believe, lies in two issues. The first is that AEC businesses and practices are notoriously weak about actually measuring marketing initiative successes. This measuring challenge is compounded by the fact that alliance participants often cannot tell whether they would have received the business from their alliance counterparts whether or not they had an alliance in place.
The second reason why alliances may fail to add to business volume in part relates to the problem of perceived exclusivity.
See these observations from Taree Bollinger, vice-president of the FCS Group in Redmond, WA:
FCS Group teams with engineering firms on comprehensive water master plans. An engineering firm approached us about forming a strategic alliance and agreeing, in advance, to team exclusively with them for a pre-selected list of water comp plans in Washington over the coming two years.
In doing so, we alienated a number of engineering firms that we would have teamed with otherwise and in some cases these were the firms that ended up landing the projects. We ‘lost’ in multiple ways. We disbanded the strategic alliance and we went back to teaming on a non-exclusive basis and our win ratio (as well as our ‘good will quotient’) rose.
So does this mean that alliances are ineffective in generating profitable business? My observation, at this point, is that you should set realistic expectations here but if you think longer term and with greater depth, the business advantages of strategic alliances still make the effort worthwhile. I’ll outline some thoughts about strategic alliance success rates tomorrow.
If you would like a complete copy of my white paper, please email buckshon@cnrgp.com.