How do you measure alliances

In our second fireside chat Anoop Nathwani and I talk about how to measure alliances and alliance success. Also we go into the question why now, in the light of the corona virus, is a good moment to perform an alliance health check.

 

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Video transcript:

Hello, everyone. We are Anoop Nathwani and Peter Simoons.

Peter: We’re here to talk about strategic alliances. And today the topic of our fireside chat is well, what is it today? Anoop

Anoop: It’s about how do you measure alliances? So Peter, how would you measure alliances? What are the kind of things you would get around measuring alliances?

Peter: That’s a very broad question and my next answer would also almost be “It depends”, it depends like many answers in questions around alliances start with it depends because it depends on the situation. But generally speaking, I would measure the performance of an alliance with the health of an alliance in four areas. So I would look at strategic drivers, I would look at financial drivers. I look at operational drivers and relationship drivers. Now strategic and financial, when you listen to other people who talk about alliances or ecosystems, they are often very much focused on the financial part. So we will create sales, what they tend to forget that sales is a result, sales is a lagging indicator. So it’s very important to look at the parameters of operational and relationship health in alliances, to be able to twist those parameters to work there, which will lead to result in the strategic part and the financial part.

Anoop: It’s a cause and effect, isn’t it? Peter? Yes. And and like everything else, you It’s pointless, you can look at an effect of something. But if the effect is something if you don’t look at the cause, you’re not going to know what’s happened. So the effort needs to be placed on the cause, doesn’t it?

Peter: Absolutely. Now, the interesting question is, and that was your question, how would you measure Alliance performance? I would look at the alliance health and especially at the alliance relationship health because We create alliances between companies but in the end are the people who make the alliance to the success. So we need to know how those people are working together, and we often talk about Alliance health checks. And when we talk about a health check whether it’s an alliance health check or a personal health check, everybody agrees that it’s important, but a health check is rarely urgent. So what happens in normal business days and normal business circumstances? We say yes, we need to do it and by the end of the day, we should it’s still on the to-do list we’ll move to tomorrow. And there it goes on the back burner and people tend to forget about creating a proper alliance health check.

Anoop: Correct. Now what do you say that in the current circumstances that we’re in which are exceptional where you know face to face meetings, not going to happen, etc, you’re doing a lot more remotely etc. The need for the health check is become even more important,

Peter: I would like to answer that question in two ways. So, one, yes, the need for the health check is even more important because suddenly people are changing their way of working, they are moving into a model where they’re not seeing each other face to face. But more like you and I now, you in the UK and I am the Netherlands we are talking over a video connection. And for us, it’s normal. But for many people, that’s not normal. They have to get used to it. So it brings a different way of working together. So from that perspective, yes, do it now. Do the health check now and assess how the teams in the Alliance are working together. But from a second perspective, with no longer having the time to travel or the ability to travel and no longer working with your partner in a face to face meeting, but also skipping all kinds of, where everybody in corporate organizations agrees useless, meetings, you will have time available on your schedule on your calendar to use in a different way. So also from that perspective, I would say, use that time now to do the Alliance health check.

Anoop: Agreed and Peter, what’s the relationship piece in there? So we looked at the, one of the leading indicators being relationships that’s critically, critically important. As you and I both know, we’ve been there, we’ve got the scars of seeing where it goes wrong, the accolades where it’s gone, right. We learned the lessons, we’ve learned our lessons. That’s right. And, you know, we see the relationship is really important. Let’s talk about it because do you see relationships as critical to the success of an alliance? Where do you see the biggest failures from your past, right? We’ve seen the biggest failures of alliances where they failed

Peter: Communication, communication, communication, or better said, or lack of communication. So making the assumption that we know that you understand what we mean. By getting sometimes maybe even too close, in the sense Well, you’re an alliance partner, you are a third party you’re working for different organizations with it feels like we’re colleagues, like you’re sitting next to me. So the moment I say “A” you understand what “A” means. However, in communication, we need to understand that every company has their own language, basically, they have their own abbreviations. So “A” can mean for you something different than it can mean for me to cry. We need to clarify in our communication constantly what we mean, because the moment I don’t talk to you for a week, because you’re not sitting next to me, and I talked to all my colleagues who are sitting next to me, and who have a different meaning of “A”, than certainly I talked to you or face to face with you. I say “A” but I mean B, because that’s what you understand. And so we need to constantly communicate and clarify.

Anoop: Agreed, and that comes down into the relationship as well. So that’s what causes a failure. Right?

Peter: Absolutely. So to summarize, I would say, do an alliance health check and do it now. And if you don’t know how to do it, you have choices of two things. Call us. That’s the simplest answer, or join our alliance masterclass, that’s taking place online in April, so you don’t have to wait that long. And you will teach you how to do an alliance health check.


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