Best Practice in Strategic Alliance Development

Best Practice in Strategic Alliance Development:

“Strategic Alliances will be Key for Small Business Survival in a Changing Government Market”

By Earl S. Holland III

Small and medium sized businesses are struggling to compete and grow in the government marketplace. Reduced budgets and consolidation of work and contract bundling provide challenges unlike any of the past.

Many companies today have the technical know-how, personnel and other resources required to bring valuable products, solutions and services to the market. But the major challenges they face are the dynamics of a rapidly changing landscape of what’s required to grow their business when the markets are not growing.

CEO’s and other executives are constantly asking; how do we compete in this new dynamic market? How do we increase shareholder value? How do we optimize product development? How do we manage human resources? How can we better serve our customers? Can we be successful with organic growth or do we need to consider an acquisition or merger to accomplish our growth goals and objectives?

These questions are becoming more and more difficult to answer. Speed, flexibility and agility are the key elements to be responsive in a rapidly and constantly changing global market. For small to medium size business, this can best be accomplished through forming strategic alliances.

By using strategic alliances as an essential component for corporate long term growth strategy, companies can acquire the resources necessary to compete effectively without incurring financial stress on their businesses. Through these alliances they can become more flexible and agile and deliver their products, solutions and services to the market with the speed necessary to compete and grow.

But if strategic alliances can be the magic sauce to a company’s growth, why have there not been more of these relationships formed and why has there been limited success with companies that have tried and failed?

The interest and practice of strategic alliances is not new, nor is it rocket science. What it is however is the ability to develop a viable culture for it to work successfully as a key internal element in accomplishing a company’s long term growth goals.

Companies have not taken the time to understand and learn the intricate process of strategic alliance development. Many think that a strategic alliance is a teaming partner or joint venture designed to accomplish a specific task or pursue a specific short-term opportunity. But in reality strategic alliance development is a critical element of a company’s DNA. It becomes a major part of the corporate infrastructure and requires the participation of all levels of the organization.

When a strategic alliance and collaborative relationship is formed properly it mitigates risks and cost associated with the partnering. The partners are free to pursue multiple growth initiatives that can create better odds for overall financial success with minimum expenditure of capital investments.

Small and medium size businesses who participate in the government contracting arena who have the ability to take advantage of socio/economic programs can benefit from strategic alliance in the planning process for their exit strategies or the acquisition of CMMI, ISO, ITIL certifications etc. Too many small to medium size companies in the government market rely too much on teaming for specific short term

opportunities and are left lost at sea when their program tenure expires and they haven’t met their mid to long term growth goals.

When considering creating a strategic alliance, a good starting point is to perform a corporate assessment on both your organization and the potential collaborative partner you are considering. The selection of your potential partner should be based on assessments of both internal and external process and consists of, but not be limited to the following;

  • Corporate Cultures
  • Chemistry
  • Trust
  • Mission/Goals
  •  Strategic Fit/Gap Analysis
  • Infrastructure
  • Alliance Structure
  • Collaborative Value Proposition
  • Governance
  • Market Opportunities

Following these ten attributes of best practice assessment processes for forming a good alliance will take a considerable amount of time. But, if the assessment is performed properly and you have executive buy in from both partners it will make the alliance and collaboration between the partners much easier to form, manage and succeed.

This article was contributed by Earl S. Holland III, CEO and President of Growth Strategy Consultants and a member of the Association of Strategic Alliances Professionals, Washington DC Chapter. Growth Strategy Consultants is management consulting firm located in Fairfax VA. They provide business to business consulting services to small and medium size businesses with an emphasis on Strategic Alliance Development, Capture Planning and Business Development.