In yesterday’s posting, I outlined my findings in my SMPS Foundation White Paper about strategic alliance best practices that there seems to be limited if any evidence that these alliances improve business volume. I interviewed approximately two dozen individuals who have participated in strategic alliances. One told me that his overhead costs declined somewhat (but he couldn’t quantify the number) and another said he estimates his business has gained about 10 per cent in volume — but he declined to be quoted directly on that fact. So it seems that strategic alliances, on the surface, don’t ‘pay’ for AEC businesses and practices.
However, the story, in fact, can be seen on a much deeper — and fortunately more positive — level. First, strategic alliances appear to be highly successful (in fact essential) in several industries, notably high tech and pharmaceuticals. The strategic alliance practice is so strong that it has resulted in the rapid growth of the Association of Strategic Alliance Professionals (ASAP). Some studies indicate that strategic alliances have a 50 per cent success rate, but with successful implementation of “best practices,” success increases to 60 or 70 per cent.
Probing into the AEC industry and the longest-established and continuing strategic alliance, the Global Design Alliance, I began to appreciate the “soft” benefits of alliance participation make the process worthwhile, provided you don’t box yourself in too deeply and exclude non-alliance participants from your relationships. Trust-based alliances can broaden your business knowledge, provide background resources and, notably, allow you to bid on and participate in complex projects with short deadlines which might be rather hard to arrange on an ad-hoc basis. I lead off my white paper with an example of a truly challenging U.S. federal bid project that would be virtually impossible to enter unless you were a mega-firm with multiple disciplines, or had an incredible array of cooperative specialist businesses ready to work with you on extremely short notice.
Other strategic alliance success stories probably lie under the radar. Do you need to announce to the world that you have a successful alliance relationship when your trust and reputation are strong enough to sustain the co-operation and you don’t wish to exclude additional co-operation with your alliance partners, sometimes (where appropriate for business reasons) with your competitors?
I think strategic alliances, handled properly, also allow you to build bridges, deepen relationships and enhance your capacity to compete effectively.
You’ll find the eight specific “best practices” and other information in the White Paper, which I can provide you on request when you email email@example.com.