Strategic alliances break thru barriers

Many firms jump into alliances and don’t think about the way the partners will work together in practice. As a result, friction inevitably develops and the relationship under-performs or even fails with long-term financial and reputational consequences. The factors that influence the potential successful outcome of a partnership can be hidden in the DNA of the companies involved. For instance, one company was centralised and bureaucratic and their partner was the complete opposite. Yet they were very successful because the partners focused on the big benefits they achieved and built-in ways of dealing with their operational differences. It is thus not necessarily the case that finding a perfect match means finding firms that think, act, and work in exactly the same way. While opposites can attract, the conflicts and disagreements that arise can be anticipated and managed. It should be recognised that such situations can generate chaos as much as creativity.

 “They expect us to perform like one of their factories but we cannot as we run jobs for different clients - one job must be completed before another can start.” CEO, SME Food Manufacturer

 “Their Hong Kong office is in daily contact with my people. There are four merchandising people who work closely with us. We invite them to Press and trend meetings to give them an overall view and make them feel they are part of the plan.” Senior Buyer, UK Retail Fashion plc

 We believe that firms should consider national culture, organizational culture, virtual culture and importantly, partnering culture as part of their due diligence when selecting an alliance partner because these will have a serious influence on their joint working. Although it might seem obvious, it will need a formal review to learn how both the partners can adapt their operational processes and procedures in order to meet their objectives and to avoid cross-cultural misunderstandings.

Changing the effects of culture is extremely difficult but it is perfectly possible to establish a partnering culture where there is sensitivity to the differences that may exist and a positive mindset towards utilizing culture as a way of securing collaborative value. Have you implemented a partnering culture that prepares your organisation to operate internationally?