Star Wars X-wing Alliance
The Smart Way To Develop Strategic Alliances
Copyright (c) 2010 Ask The Business Lawyer
As I channel-surfed the other night, a VH-1 documentary on disco reminded me of 8-track tapes. When all of my friends had them, I absolutely, positively had to have them, too. But very quickly, I realized that they didn’t meet my needs (I couldn’t rewind and replay my favorite parts of the Star Wars soundtrack), so I was on to the “next new thing” (stereo audio cassettes!).
Fads can be fun when there’s not a lot at stake. But when it’s your business, it helps to look before you leap. And little by little, I’m now hearing about the fallout from “strategic alliances” . . . largely because people rushed into them as the “next new thing” without thinking it through. How can you make sure yours succeed?
Begin with the end in mind. The most important question to ask yourself about alliances is: do I really need one? Many business owners run around trying to “collect” them for the sake of having them, without focusing on whether their own business needs will get met. Or whether the work to create and sustain the alliance will outweigh its benefits. Don’t start by thinking, “I want to form an alliance – with whom can I do it?” Start with, “I have a business goal, and an alliance is a good way to get me there.”
What do you want for your business in the short run? Are you planning to be higher profile to get more clients? Are you looking for clients similar to what you now have, or you planning to find clients in a different marketplace? Are you planning to offer these clients your existing products or services, or are you introducing new ones? How you answer these questions will help you decide (1) if an alliance will work for you (2) if so, who should you team up with and (3) what is the best strategy to working with them?
Once you have concluded that an ally is best to get your business moving forward, your next step is to find suitable “power partners”. Who are they? They could be people or businesses that can turbo-charge your company in a way you have not managed on your own. How to choose? Review your business goals, and ask yourself:
- Does this person/company offer products or services that complement mine (direct competitors are often not a good power partner choice)?
- Is this person/company well regarded in the marketplace? (check this out before hand as you do not want a bum as an ally)
- Is the person/company I am allied with in an industry that I would like to be part of?
- Does the person/company run a bigger or smaller going concern, and is it an issue who runs the relationship?
- Do I enjoy working with this person/company? What is their “corporate culture” like?
- What is this person/company planning to get out of this collaboration with me/my company? Are our goals compatible?
Taking baby steps with your strategic alliances is a good idea. Like a personal relationship, it is best to let your alliances naturally evolve over time. This is far better than forcing it to grow. Starting slow is fine.
It benefits all parties to a power partnership to have everything written down. This is especially crucial when money is involved or intellectual property is created, and when you share clients. Writing everything down lays a strong base for your alliance with power partners.
About the Author
Want to save time, money, and aggravation with pesky business law issues? Award-winning business lawyer and Entrepreneur Magazine online columnist/blogger Nina Kaufman has user-friendly business law resources for entrepreneurs that demystify legalese. Get your
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