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Thursday, November 3, 2011

Making an Alliance Work in Business

Peter King
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Forging an alliance with another company in buying a business can be very successful, but requires that the partners are culturally compatible. This involves more than being polite to each other and throwing resources, processes, people and customers into a venture. You must put it together carefully.  

 
 

Conduct an Assessment of All Sides’ Cultures and Management Styles


Examine every party’s
values. Ask some simple questions, such as: 
  • How will your partner handle a breakdown of relations with a customer?
  • How do you both handles issues regarding breach of integrity?
  • How will you think about quality, innovation, profitability?
Keep in mind that there is no right answer in regards to what is the correct company culture. The importance is compatibility and that everyone involved will value the same things.

 

In the end, you must choose your partners carefully. Trust your intuition, and don’t fool yourself into thinking that you can influence what your partner fundamentally believes. Company cultures, like country cultures, don’t change easily.


Make Your Processes Transparent


There are very few processes within a company that are unique. Maybe you have a secret formula or a proprietary manufacturing technique, but most of your and your competitor’s processes are the same. To have a successful alliance, all parties must be open minded so that process relationships can develop. You cannot intimately connect unless you understand how each other operates.
A pivotal principle in an alliance is that you must share good ideas, and stop worrying about who receives the credit.


Harmonize Your Processes


Most likely the processes in each of the parties will not work together cohesively.
For example, if one partner contributes the sales processes to a venture and another partner the service processes, work will have to be done so customers experience these processes in a seamless way. Lots of problems occur and in hand-offs. All the processes of an  alliance have to be examined to be sure they are harmonized — that is, that they act in concert with one another. In some cases, totally new processes will have to be developed.

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