SEVEN KEYS TO DEVELOPING STRATEGIC ALLIANCES
Whether you operate or are employed by a small or medium sized business, forming strategic alliances can help you get the edge in todays competitive marketplace.
So where do we start. How to we take out business from small to medium sized and with whom or to which marketplaces? Some of you may think its all too hard, but that is not necessarily the case. To develop strategic alliances, it pays to consider the following seven keys:
SELECT YOUR PARTNERS CAREFULLY
Make sure you attract like minded people with similiar values and ethics. Today there are still many "cowboys" in the marketplace. People who ride into town, with lots of fanfare making lots of noise and hollow promises. And yes they do attract business and even take a few prisoners. Customers who are snapped up, taken on a whirlwind ride and left a few stations down the track - bewildered and disenchanted, and usually out of pocket.
This approach does work for some, depending on their product. However, if you are looking for a long term relationship with your clients, don't network with the cowboys, or you are sure to have a stormy ride.
You may consider looking at your peers and competitors and identifying who does think like you, run their businesses along the same ethical lines and basically have a good business name. If you are going to tackle the global market, your possible business partner may already have contacts in this region, but lack the product knowledge - this is where you may fill that need and vice versa.
BE CLEAR ON YOUR DESIRED OUTCOME:
- be as specific as possible. Identify exactly:
- how big you want your connection to grow
- the turnover you anticipate
- the number of hours you can commit to the project
- any other commitments that may affect your financial situation
- any fears you may have about the business relationship
- identify exactly how many widgits you want to product and by when and by whom
- how much you can afford to invest and lose, should your partnership fail.
NEVER ASSUME ANYTHING
Many business partnerships fail because of poor communication - partners assumed major items. Because of the assumption, many things were never discussed. Some partners think everything that needs to be discussed is covered once the $$ are finalised but this is far from reality.
Clarify everything, don't be afraid to state the obvious. What is obvious to you , may be totally unknown by your partner. Put everything in writing as soon as possible after your meetings. Take notes during the meeting or have the meeting and minutes recorded for you. If there is action to be taken, agree on who does what and document this also. Get commitment from all partners involved.
SET SPECIFIC TIME LINES AS WELL AS TRIAL TIME FRAMES.
Many people agree in principal to something and then find that due to prior commitments or unexpected events, they cannot honour their agreement. By setting trial time frames, you can get an idea of your partners management style, attention to detail and their actual investment in the project. Remember to always include a time frame when things need to be completed by - you may call it stage one.
Based on the results of stage one, you then proceed to stage two. Avoid the temptation to take the project beyond stage one, until you have seen and realised your partners true commitment. If they miss the first deadline, how will they ever achieve future deadliness.
ALLOW FOR EXIT CLAUSES
Better to lose a partner in the early stages, than lose your good name in the marketplace. Sometimes the different styles of management and leadership create disharmony. Something that seemed like a small annoyance may become a huge irritation down the track. e.g. you may form a partnership with someone who always runs at least forty minutes late for every meeting.
You on the other hand are always ten minutes early. You may initially laugh this habit away, however, after a few months of being kept waiting, you may not see the humour anymore. You may like to place a "trial time frame" e.g. lets review this in 30 days and see how we are travelling. If things are not working out by then, we can dissolve the partnership without any hard feelings. This one point will ensure clean breaks if required.
AIM TO ALWAYS WORK WIN-WIN
Brainstorm possible best and worst case scenarios regarding this strategic alliance. What is the worst thing that can happen and can you cope with that outcome? If you can, then you have absolutely nothing to lose.
If you can't cope with that outcome, you may like to review the situation or review the guidelines. If the alliance is based on a win-lose basis - it rarely works. One partner becomes annoyed, reluctant and eventually gets tired of constantly being the underdog. On the other hand though, if your partner can introduce you to a marketplace that you would never have got into without them, then maybe it is worth experiencing a win-lose situation as long as there is a specific time frame for this to happen.
REMEMBER TO CELEBRATE YOUR SUCCESSES
In life, some people are so busy doing, doing, doing, that they forgot to stop and smell the roses. When there are budgetary restraints, we often think that we can't afford to celebrate as lavishly as we would like, so we won't do anything at all.
To maintain your and your partners motivation, its important to record the milestones in your alliance. Your first order or contract, your first payment in excess of $x - milestones that you will soon overtake. However, at the start you wonder if you will ever achieve them. Acknowledge these wins regularly. If you don't give yourself recognition, why would you expect others to give it to you?
IF YOU NEVER ASK THE QUESTION, THE ANSWER IS ALWAYS NO!!
Imagine out of all the people you know personally, have read about in books, magazines or seen in the media, which two people would be the perfect people to form a strategic alliance with. You may have to dig a little to find their contact details (if they are strangers) - however make the effort.
Do your homework, prepare your business plan, do a SWOT analysis highlighting the positives and the negatives of a joint alliance. Prepare all the information that you consider your potential partner would need to know before they could comfortably make a decision about forming an alliance with you. Make the phone call, send a fax, email, whatever is approach - make contact with these two people. Ask for six minutes of their time? And talk fast - let your passion and enthusiasm sell your idea.
Whats the worst thing that can happen - rejection. You can live with that, they are not rejecting you. Today they are rejecting your product, service or a specific opportunity. Tomorrow, they may change their mind, or better still, they may introduce you to a person they consider to be your ideal strategic alliance partner. And they may be right. We can find excuses every day to stay in our comfort zone and not approach others, who can help us to grow our businesses and our careers. Yet if we have courage, face our fears and make our dreams, goals and targets greater than our fears - we can have whatever we want in life.
Dream big dreams. . . .