A few weeks ago, I wrote about the difference between a partnership and an alliance. In response to that column I received lots of replies from you. They all acknowledged the fact that in communication, it is essential to create clarity regarding the terms you use.
Since that column appeared, a number of consulting firms published their views on the business world and not surprisingly connected their findings to the current pandemic:
Accenture stated that “COVID-19 made it clear that companies can’t navigate through disruption and uncertainty alone”.
The IBM Institute for Business Value 2021 CEO study highlights that in the light of the Covid-19 pandemic “Outperformers—in clear contrast to Underperformers—report a heightened emphasis on partnerships. Asked to identify those factors that increased in importance most in 2020, 63% of Outperformers identify partnerships, compared with only 32% of Underperformers”.
They might be observations that you and I as alliance professionals already know about. For the general audience, however those findings might be an eye opener! Alliances & partnerships are still known to be risky endeavours, with a high chance of failure. We both know that it does not have to be that way, as long as those involved follow a structured approach and carefully manage their alliances.
However, some other reports also appeared and these put alliances in the same category as mergers and acquisitions (M&A). Deloitte even dares to name alliances “non-traditional deals” and Bain & Company write about “updating traditional M&A playbooks for […] partnerships”.
These are risky statements! Alliances & partnerships might have, in some stages, a similar process to M&A. However similar is not the same. Alliances require a fundamentally different approach when it comes to partner selection, negotiation, launch and management. Not to mention that in alliances & partnerships, Trust plays an even more essential role than in M&A. (The capital T in Trust initially was a typo, but I left it as it is, as it underpins the importance of Trust in alliances & partnerships!).
The good thing about these reports is that they show a heightened attention for alliances & partnerships. The risk I see is that companies might opportunistically jump into alliances without proper, or with incorrect preparation, and you know, good preparation (as we teach in our Alliance Masterclass) is half the work!
Links to reports mentioned in this column: