Strategic alliances “are an essential weapon in the growth arsenal,” as Deloitte puts it.
I’d take it even further: these alliances are key to the success of technology organizations. You can’t do business totally on your own in today’s world. Organizations don’t have 100% of a solution any longer. We have to work in the global ecosystem and be thinking more broadly.
But technology partnerships aren’t always easy. They take work, they take nurturing, they take buy-in – and they can often fail or underperform. How do you really optimize and maximize the value of your partnerships? Ultimately, it’s all about establishing a win-win scenario.
A truly optimized partnership looks collaborative, where each organization sees benefits. It’s high value for the end users who will be using the joint solution. Without a customer buying it and gaining value from the solution, it’s not successful.
Let’s look at the potential for challenges within technology partnerships and then at how to optimize the value of those partnerships.
The pitfalls of partnerships
If we look at a technological alliance, you’re bringing to market a joint solution – bringing the partners together so that 1 + 1 = 3. You do this to meet a customer need or fill a gap in a way that doesn’t require an acquisition or an OEM.
A survey by Alliance Best Practice and Deloitte looked at the top best practices that alliances fail to adhere to. The four most common ones were trust in the alliance process (cited by 65% of respondents), lack of common vision in the alliance (60%), inequity of commercial returns among partners (50%), and cultural misalignment (45%).
The biggest challenge starts at the very beginning of the process – getting buy-in. This is often a moving target. Perhaps you’ve gotten executive buy-in and you’re in the process of finalizing the partnership, but then someone leaves the company and you no longer have that internal champion. Many of these partnerships don’t have a formal agreement, which is its own challenge.
A tale of two partnerships
It’s helpful to learn from real-world partnership mistakes. In a previous role as the head of strategic alliances, one of my top two partnerships was teed up to succeed. Both organizations had aligned priorities and executive sponsorship.
Things started off well. I had a field channel team who was engaged with the partner to support them with the deals. The funnel grew and sales grew for the first nine months.
Then the partnership imploded.
Here’s why:
Our sales leadership changed the compensation plan on our side and wouldn’t pay the channel team to work with the partner. This had quite a negative ripple effect.
While there had been executive sponsorship with both organizations, our partner started to pull back because they were acquired by a large conglomerate and started to build their own strategy. The partner started to change their engagement strategy with us. They were not bringing us into their opportunities. Instead, our partner, who was bigger than our company, started to dominate us, and things shifted from an equal partnership to a more one-sided relationship.
While this didn’t provide the outcome we wanted, it did provide valuable lessons on how to improve the process next time. Similarly, there’s also a lot to be learned from partnerships that do succeed.
In one situation I was involved with – we had two capable organizations with similar goals who both saw a void in the market and, by working together, brought a unique solution to the market. Once the need for the solution was identified, executives from both organizations came to the table to share what each organization wanted to achieve. They had a similar vision and mutual respect for each other. They listened to each other and collaborated. Resources on both sides were assigned and both senior executives made it known this partnership was a top priority. And we were able to bring this to fruition. Within a short amount of time, the pipeline was growing and new opportunities were being added.
Much of the success with this partnership was due to both sides embracing the other, respecting what each organization brings to the table, having the same goals and having teams on both sides that were collaborative. It might sound simple, but this is truly the most foundational of factors needed to ensure a partnership’s actual outcomes match – or even exceed – the desired ones.
Creating a strong, successful partnership
Always ensure you’re starting with a solution that’s based on customer demand – ideally from a tier 1 customer who is asking for it and has therefore already “bought it.”
Then, you need an executive sponsor at both organizations involved in the partnership. This person must be very involved in the project and the deliverables. For a partnership to be successful, you need leaders who are open to new things and who understand the need for true collaboration. This will help shape the shared vision, the shared messaging and the cooperative spirit that underpins any successful partnership.
However, finding these leaders can be like finding a needle in a haystack. Sometimes a leader comes into the partnership process with their own personal agenda and a lack of trust. That’s all too common. So, choose your leaders wisely.
A third element of a strong partnership is agreed-upon timelines and outcomes of what you want to achieve. You need to be able to map to these to ensure you’re moving forward. It’s not just about the relationship. You also must factor in the product lifecycle.
Planning for success
Your technology partnerships can be one of your strongest assets when it comes to closing new deals and expanding existing customers. But it’s certainly not easy, and not all partnerships are successful. Even those that are could often be more successful; the value isn’t always fully optimized.
To make the most of these alliances, beware of the pitfalls and learn from what has worked and hasn’t worked in the examples above. As technology changes rapidly, it creates new needs and new opportunities for organizations that can create successful and strategic technology partnerships.
