That statement prompted me to write down some of the key warning signs that spell trouble on the horizon. Most of these you can spot before you even launch an alliance.
- Uneven levels of commitment – The alliance is critically important to you but it appears to be of limited interest to the other party.
- Intermittent executive attention – Effective alliances need consistent senior executive ownership or critical decisions languish (see glacial pace below).
- Changing strategic objectives – If the potential partner does not have evidence of sticking with and executing a strategy, your strategic needs for the alliance could be in jeopardy.
- Glacial pace – Both parties have to move at a speed and tempo that matches the economics of the market environment.
- A size mismatch – Smaller companies tend to enter alliances in defensive mode because they have much more to lose in contrast to the larger partner. These alliances rarely pan out.
- Poor internal structures and lack of cooperation – Alliances require committed resources on both sides to ensure accountability and progress.
- Incorrectly assessing the other side’s capabilities – This warning sign typically appears when it is already too late. Raise any concerns immediately to seek a solution that can plug the gaps.
- Politics – If the decision-making authority is more important than making decisions, it will likely affect the agility of the alliance.
- Lack of internal consensus – The resource requirements related to alliances, requires full buy-in within both firms. Wavering participants can set you back further than where you started.
- Misreading the joint value proposition – Some times, the market does not see the value or a competitor beats you to market with a better solution. At this point, if any of the other warning signs exist it will surely cripple the alliance.
Take some time this quarter to recalibrate your channel management strategy based on the assessment of these warning signs within your own alliances