April 6, 2021 – G2Crowd, the world’s leading business solutions review website, released its Spring 2021 Report on Partner Relationship Management (PRM) Software. Allbound continues to be recognized by G2Crowd Grid Reports due to the responses of real users for each...
Alliances are by no means a novel concept in the world of sales. As companies grow, they often find themselves turning to partnerships to create mutually competitive advantages for both parties involved. However, the problem with partnerships is discerning whether they’re actually strategic or not.
Establishing and maintaining strategic partnerships can be a major time and resource commitment. And obviously, you don’t want to enter into a partnership that could result in a waste of both.
So, what makes an alliance truly strategic? To help identify, maintain, and sustain strategic alliances that stand the test of time, consider our three tips for forming them in the first place.
1. Establish Core Business Goals and Objectives
Companies often partner together to reduce costs and increase their economy of scale. However, while many business objectives center on revenue generation, it’s important to do your due diligence and dig a little deeper before jumping into an alliance. It’s time to identify shared goals and objectives.
True strategic alliances are built around a common challenge. For example, some strategic alliances provide organizations with a new set of skills or capabilities. In doing so, partners may provide each other with a product that complements each organization’s own offerings to create an appealing synergy to consumers. Other organizations form alliances to create strategic advantages. Rather than compete with their rivals, companies will join forces to increase competitiveness or enter new markets and verticals.
Having trouble establishing objectives? As we’ve written about before, there are several questions you can ask yourself to help identify the right partners and outline key objectives:
- What are you trying to receive from this specific partnership?
- Whom will this partnership benefit? [hint: BOTH customer bases, therefore BOTH companies]
- How will you measure the success of the partnership?
- What is the potential impact of this partnership?
- Is your organization compatible with the other company both in offerings and culture?
- Is this a positive environment for partnering?
- Are there any major risks associated with this potential partner?
No matter what your motivation is for entering a partnership in the first place, it’s critical to make sure that everyone is on the same page—and that all parties are working to accomplish mutual goals throughout the entirety of the partnership.
2. Outline Responsibilities and Determine Leadership
While partnerships do involve multiple moving parts, it’s important to identify a leader who’s in charge of the processes, structure, and measurement for how his or her organization develops, maintains, and assesses partnerships.
Without a leader, organizations lack the proper push behind a strategic plan. As a Forbes article points out, according to a recent study, 85 percent of respondents consider strategic alliances essential components of their business. However, of this percentage, only 33 percent said they had a formalized strategy in place for partnerships. Without a formalized strategy—outlined by a leader and followed by both sides—it’s nearly impossible to track the progress of an alliance.
Not only does leadership help establish strategic plans to drive alignment between the two parties, but it helps ensure alignment across your internal teams. By establishing formalized objectives, goals, milestones, and measurement techniques, your team can accurately manage expectations.
3. Evaluate and Adjust Accordingly
It’s true that not all partnerships are created equal. Some partnerships are doomed to fail from the start (the tips you just read should help prevent that!), and some require only a bit of finessing to perfect.
Alliances run the risk of taking on lives of their own and straying away from the original objectives. While it’s important to allow growth and changes to happen organically, it’s also important to establish checkpoints and milestones that allow you to evaluate your efforts. Work with your partner to establish appropriate review processes and procedures. And actually follow through.
Continually referring back to your initial plans and objectives not only enables you to redirect a partnership that has gone off course, but it also allows you to celebrate your wins. Sometimes, the best partnerships are those that change along the way.