In the Q4 2022 edition of the Strategic Alliance Quarterly, Michael J. Burke wrote an in-depth article about the importance of scenario planning: if something happens to throw a partnership or an initiative off course, all stakeholders know exactly what to do because they are not confronted with the situation for the first time.
Even with the best alliance professionals, partnerships can experience a change in pace, direction, motivation or delivery at any point.
As indicated in the article, alliance managers who are proactive in monitoring all elements of an alliance, work hard to anticipate what could go wrong.
Best practice strategic alliance management incorporates effective planning to manage both foreseen and unforeseen changes, as and when they happen.
In this article, we have taken a closer look at 5 areas where digitization can both simplify and support change in alliance circumstance.
1. Anticipating change
An alliance naturally progresses through different life-cycle stages. Some operating models see the alliance manager brought in from the very beginning, others at later stages. Wherever an alliance manager takes control of an alliance in your organization, having a central system of record that all departments can feed into and gain insights and value from is an easy way to both simplify the process and support the executives working with the project.
It’s important to create alignment around key decisions with all stakeholders. Changes to those people involved or to the timelines associated with the decisions can significantly disrupt an alliance.
Disruption can be avoided by ensuring governance is transparent, accurate and accessible to all involved.
By digitizing governance, information about any changes can be disseminated in real-time and plans can be modified in a timely and de-centralized manner.
allianceboard defines five broad types of strategic alliance risk:
- Internal – risks that relate to your own organization’s ability to deliver on alliance outcomes (such as a new operational priority)
- Partner – risks that relate to the strategic alliance partner’s ability to deliver on alliance outcomes (such as a restructuring within a partner) or resulting from alliance activity that impact on the partner
- Asset – risks that relate to the most important strategic alliance outcome. For example, in co-development alliances this could relate to the inability to achieve a milestone when developing a new piece of technology; in a co-sales alliance this could relate to the failure to achieve required growth in the number of channel partners
- Governance – risks related to a contractual uncertainty or ineffective decision-making at steering committee level (such as the inability to affect a timely escalation for a sponsor’s decision)
- Environmental – risks that are external to both parties (such as political, economic, social, technological, and regulatory uncertainties)
Regardless of the type of risk, its probability can increase or decrease with change.
Digitizing risk can support partners to proactively manage risks and create mitigation strategies for collaborations ahead of actual change.
For more information on risk management, you can read Managing risks in strategic alliances.
4. Operational infrastructure
Changes to the core infrastructure of either partner organization could significantly disrupt an alliance.
This could be the introduction of a new IT system, new team members or even a partner being acquired during an initiative.
From daily operational handling, reporting and analysis, partner involvement to strategic value development, digitizing the alliance management function helps ensure that critical information is not lost.
5. Alliance health
Every alliance manager knows regular alliance health checks help highlight possible problems early and areas where change is required.
Regular alliance health checks can give you the best chance of heading off issues before they escalate – they are the best insurance policy for managing change proactively.
Many organizations conduct alliance health checks only after there is a change in circumstances or after a problem has emerged.
Digitizing your health checks takes the burden out of designing them and allows you to schedule them to a pre-defined calendar. Much of the administrative effort is automated, meaning organizations can conduct alliance health checks proactively freeing alliance managers to concentrate on creating value for the alliance.
There are many other examples of how digitizing your alliance function supports changes in an alliance. What is your favorite example?