Earlier this week I was at a fundraising “thank you” for the National Horse Racing Museum hosted by The Jockey Club in London. The event drew an august crowd of donors and supporters and they received the obligatory overview of the Museum’s plans in the confines of Christie’s, the global auction house. A very convivial evening experience. What later became obvious talking to some of the organisers was the huge missed opportunities to harness the power of the alliance (stronger credibility, attract wealthier and more influential people, provide them increased excitement and perceived value, offer multiple ways for future contact, repeat contributions, referrals to others and continuous communication). This sadly is the common outcome of most alliances.
My observation based on hundreds of alliance conversations and a handful of powerful alliances that I have formed for global organisations is that very few take heed of the old real estate sage’s wisdom “you make money on the way in, not the way out.”
In other words, there needs to be strong, factual evidence BEFORE entering the alliance what goals can reasonably be achieved and how to best make that happen, and the results that arise AFTER the duration of the alliance are viewed simply as a bonus.
Yet the majority of alliances I see in professional service firms, financial services, and international growth and expansion initiatives are not formed on that basis. Little wonder that that 90% of partnership or alliance discussions never result in any business being done, 75% of actual partnerships or alliances formed cease to be effective within a year and no more than 10% of partnerships or alliances run the duration of their projected lifespan.
Here is a few key steps for any business or not-for-profit to undertake BEFORE expanding valuable time, money and effort on alliance discussions:
- Strong Personal Chemistry (share same values, trust, social skills, empathy and so on)
- Track record of success with other alliances and strong references
- Each partner’s self-interests and desired outcomes are transparent
- Each partner comfortably shares their strategies and agreed investment plans
- There is a demonstrable short-term opportunity (name of an individual, organisation) with a clear “need”, where the power of the alliance will result in a dramatic improvement to the individual or organisation and mutual benefit to both partners.
Let me remind you what doesn’t work. Detailed conceptual discussions based on perfect paper exercises. Effective alliances are about people with the requisite skills and volition doing something together, not thinking about doing something together.
© James Berkeley 2014. All rights reserved.
Tags: alliances, business expansion, Client Acquisition, Due diligence, making strengths productive, not-for-profits