Where is the revenue?
Where is the revenue?

When it comes to strategic alliances there are two kind of executives in business: those who understand it and those who don’t. The first kind is supportive and sharing, understands their counterparts and is aware of the necessity for a triple win in alliances.

The second kind is the kind that causes the biggest trouble and frustration for alliance managers. These are the kind of executives who feel that alliances are like a magic wand: once you wave the wand, the alliance will produce revenue.

There are stories known of executives who visited a partner with an alliance manager and called upon the alliance manager two weeks later to inquire where the revenue was. After all, the executive paid a visit to the partner, now it should produce revenue! At least that was their thinking…

Unfortunately it does not work that way; alliances are no magic wand.

Alliances, and especially strategic alliances, are created for the long term. Even though in some kind of alliances revenue is an important element, it is a lagging indicator. Revenue is a result of the work that has been done before.

The executives who don’t get it often unknowingly do harm to the relationship. They put the pressure on the partner to deliver results, but they tend to forget that revenues are results of a combined effort. What you reap you must sow and maturing of the crop takes time.

An executive has a role towards his counterpart in the partner organization, with whom he will need to build a relationship, build trust and work together. The role of an executive is broader than just building relationships and trust. The executive will be your champion, evangelizing the alliance to other executives in your organization.

The executives who understands his role, understands the alliance. He will also understand that alliances are no magic wand, but the result of team effort both with the partner as well as within your own organization.

Alliance managers, executives and other functions are an essential in the governance structure for alliances. Regardless the size of your company, or your partner’s company, setting a governance structure is essential.

In my training and coaching I teach and coach participants on how to create successful alliances. It turns out that more often than not a proper governance structure to support the management of alliances is overlooked and not set.

In my training and coaching we discuss a number of governance tools that can be used to keep track of the alliance and create a clear insight in its status. Tools that often open the eyes of alliance managers and which they can immediately apply within their own alliances.

Read the other two articles in this series:

2 Responses to “Alliance mistake #2: The Magic Wand”