Everything comes to an end, even the longest lasting alliance. Perhaps the biggest challenge is to know when to quit an alliance. In some cases it is obvious: the contract reaches its end, the alliance has served its purpose and the parties decide not to extend the contract. Everyone goes their own way.
However, there are many cases where it is not so obvious. For instance, when during the contract period one of the parties becomes unhappy with his position in the alliance. Then it is time to transform or to terminate the alliance. However, the parties do still need to be on speaking terms for the unhappy party to be transparent and to be able to open the negotiations. I have seen examples where that worked very well. I have also seen examples where a party was very surprised that their partner was walking away from the alliance.
Signals to observe
An obvious signal for terminating an alliance is the fact that it is not delivering on its promise. Numbers are not being made, the market size is not as expected, or the technology is not feasible. Clear signs to not drag along, but to take action. Find out if there are other opportunities to transform the relationship with your partner, otherwise start the negotiations to terminate the alliance.
Another signal is that the alliance is not properly supported by executive sponsors. Partnerships without an assigned executive sponsor are not strategic. If that is the case, how long will you drag along without proper executive support? A clear sign to consider termination is when you can’t get an executive sponsor assigned, for instance if one of the executive sponsors is moving on.
Perform a health check
The purpose of a periodical health check is to steer clear of any problems before they happen. That applies to both your personal health as well as to the health of your alliances. An alliance health check will provide you with information about the state of your alliances. The outcome of a health check should always be connected to an action plan to improve the most significant elements of misalignment. A regular health check will help you to prevent surprises and will provide you with information about areas for optimization.
When did you perform your last Alliance Health Check?