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A Historical
Perspective
To understand the history of forming and managing successful
alliances is to understand the radical changes in business
in the last 30 years.
Looking back at the 1980s, there was a maze of everything
from management fads to what are now required business
practices. The challenges of increased competition and
shrinking margins gave rise to process improvements,
the drumbeat for value-added products and services,
the elimination of waste , the identification of core
competencies at both an organizational and individual
level, and the use of technology as a “business
enabler” as opposed to “an expense.”
We witnessed renewed impetus to increase revenues through
total solution selling, customer loyalty and retention
programs, account penetration and incremental sales,
and new product and service introduction.
By the 1990’s another trend was gaining popularity
in the US, having migrated eastward some 10-15 years
earlier in Asia Pacific and into Europe . These were
“new business models” – different
forms of alliances- implemented to increase revenue
potential and reduce cost s.
And with these models came a new way of doing business.
They ranged from the more traditional customer/supplier
relationships with fewer, more strategic sources, joint
marketing and sales initiatives, outsourcing agreements,
and the more complex and potentially more risky development
of joint ventures.
By the end of the twentieth century it was apparent
that major international businesses were seeing anywhere
from 15%-40% of their revenues generated through alliances,
business partners located anywhere from down the street
to the other side of the globe.
These ways of doing business also meant different ways
for forming relationships, managing expectations, ongoing
communication. If did not take long for people to understand
“the game” was being changed. Drawing from
the field of sociology and the work of Irving Goffman,
from in mathematics, and business writers , the use
of game theory in business took on greater importance.
Because the likelihood of reaching a business objective
was increased by a greater commitment by all the players,
the game must be played so that everyone wins.
The onset of the new millennium saw even greater pressure
on reducing costs. And then…
In the four-hour period when the Twin Towers collapsed
on September 11, 2001, the world’s political and
cultural landscape changed forever. Below the surface,
however, were other pressures that erupted unto the
international scene. It was as if the collapse of the
towers unleashed a combination of forces that were about
to change the nature of international business –
if not forever, at least for the foreseeable future.
What were evolving, somewhat amorphous and uncharted
methods for conducting business globally were frozen.
The SARS and terrorist threats only added fuel to an
already growing need to conduct global business without
face to face interactions, across geographies, cultures,
and time zones, with uncertain knowledge of capabilities
and commitments.
Alliances, business partners, and partnering are used
to describe different requirements and expectations
that even small and medium sized companies want from
the organizations with whom they work. Now there is
the realization that regardless how far upstream or
downstream you are in the value chain, there is only
one true customer, and that is the person who writes
the check for the products and services that you, and
your business partners collectively provide.
Partnering – how is it different
Partnering is different way of doing business. It is
an acknowledged agreement that two or more organizations
must work interdependently in order for BOTH to succeed.
Both must “win,” and both must contribute
to the customer’s “win.” This is not
simply a philosophy. It is a business model formulated
on a set of nine best practices that comprise a unique
process for conducting business. At a micro level it
is a game of survival. At a macro level it is faith
in the future. So begins the journey.
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