![[PHOTO] Light streaming through a key hole illuminating an old iron key.](../images/ph_findings.jpg)
Strategic partnering can include management and technology transfer, licensing, research and development, distribution, and co-marketing, to name a few. Partnering is for cost savings and growth. The relationship leverages strengths that neither has by going it alone.
Partnerships work best where they help organizations gain expertise in areas that are not their core competencies; help mature firms gain the energy and "can do" entrepreneurial skills offered by a successful medium, private, or small business; or allow a medium-sized business to expand distribution and gain the marketing prowess and deep financial pockets of a larger firm. Boards of Directors have learned that internationally, alliances are, more often than not, necessary to open new markets.
In all such synergistic relationships, common ground needs to be found that is achievable and trustworthy, and adds value by engaging the needs of each party.
Looking behind the announcements and photo opportunities, it is not difficult to find well-intentioned arrangements that failed. The greatest obstacle to a successful partnership is that one partner doesn't control the behavior of the other. Another is failure to put in place measurements, financial and non-financial. The California Institute of Technology reports that 60 percent of firms fail in their partnerships, and of those, half have no idea how to gauge the value of these partnerships.
What steps should be taken to ensure the success of a strategic alliance?
The standard financial metrics are necessary but no longer sufficient. More and more it is non-financial measures that matter. The following should be assessed:
Analyze, and deploy professional facilitators to manage, the compatibility challenges.
Engage senior management from both sides on the non-financial assessments of the alliance,
Maintain flexibility.