A great many high-growth businesses have a “marketing-finance function tension” with strategic alliances that if not addressed robustly by a risk-taking founder or CEO, can dramatically impact incremental profitable growth.

You see the “market need” and the combination of “competencies” and “passion” to address it, at scale, only a strategic alliance can uniquely provide your business. Particularly with distribution, technology, manufacturing or brand credibility.

Marketing tends to place the self-interests of a prospective strategic alliance partner first, and ask “what compelling proposition can we put in front of the alliance partner that is demonstrably in their self-interest to accept?”

The Finance function defaults to the opposite, asking “what’s in it for us with close to zero risk first and then, what can we put in front of the potential alliance partner?”

Think of this as the difference between “success” and “perfection” in strategic alliances.

The variable rarely asked by the Finance function is “timing”.

Invariably when the market need has exective attention in a potential large strategic partner, and the requisite mid-level manager skills and volition to engage with an entrepreneurial high-growth business partner, it is not of the latter’s ideal timing. That means “risk” perceptively shifts to the smaller partner.

You now have two very different replenishing pools of risk-taking targets for strategic alliances.

A tiny handful of “perfect alliances” if you are fortunate with the Finance function approach and a larger realistic pool of “success alliances” from which to convert interest into closed business. Think of the Astra-Zeneca covid vaccine partnerships with Oxford University, Uber and Spotify, and Amazon and Whole Foods. The commonality, is none of these strategic alliances were perfect risk-taking options and timing for the smaller, entrepreneurial organisations.

If you are satisfied that you are looking at an “ideal” strategic alliance with meaningful enterprise value creation potential, you can always make the timing “right”. Time is merely a value-creation priority matter. Nothing more.

Wednesday night in London, original thinker and the master of irrational thinking, Rory Sutherland, challenged the audience to consider the power of “diagnistic momentum”. The hardwired framework through which those with power, control and influence insist all risk-taking decisions are ultiamtely made.

The cardioligist whose heart health determinations must follow through their rigid health diagnostic framework and the politicains who insist every valid policy must pass through their economic and legal diagnostic framework.

Biases are embedded, and alternative ideas and opinions ejected (don’t fit the rational decision-making framework).

It leads to a narrow set of alternatives and close to zero opportunities for “alchemy”, the title of Rory’s bestseller. Decisions and benahvioural changes promplted by irrational logic which are often more effective than the rational answer, in the real world. Why? Humans don’t act on rational decisions in many instances.

Is your organisation or your competitiors beholden to diagnostic momentum? As an entrepreneur, does that create hidden opportunity? When everyone views value-creation through the typical banker lens and metrics, is there an opportunity to think and act differently in an exisitng and new market? If so, why?

If every competitor is obsessed with AI-driven revenue and cost synergies and data centre capex, can you find hidden value in doubling your investing in superior human intelligence?

If you run a chain of UK funeral homes with a sector under deep regulatory scrutiny, might there be hidden value in having your best people design better fulfillment processes, communication practices and identification procedures not to impress the regulator but to give customers and their families greater meaning, smarter risk management and powerful reassurance that you have their self-interests at the top of your agenda? The human before the technology.

THE ENTREPRENEUR’S BUSINESS PLAN SPRINT

Summer Offer (available for all inbound inquiries to 31st August): In 90 days we create a complete, professional business proposal with guidance to advisers and/or investors. This will include your marketing platform, competitive analysis, presentation, and so on. I’ve had dozens of business plans result from prior Business Plan Sprints. I provide group and individual feedback based on regular assignments and we meet via Zoom. Fee: £3,999 (USD/EUR equivalent) plus taxes. Finally write, get that business plan in front of your ideal partners including investors, and convert interest into closed commitments fast. Write to me to apply: james@elliceconsulting.com  I am beginning on 1^st September the next cohort and I already have interest from people in Europe, US and Asia. All sessions are also recorded.

If you buy the $5 trillion baby boomer market opportunity, are you optimising the transfer of your clients’ assets or the transfer of your clients’ resilience?

There is a huge difference.

Most expert commentary focuses on the “assets” as if it will occur in a linear fashion when all the evidence today suggests that it will occur at a time that the heirs to the baby boomer wealth, are highly vulnerable to shocks and disruption (aggressive IHT changes, wealth taxation, currency instability and geopolitical changes).