For a little over a year now we have all, to some extent, been influenced by the COVID-19 pandemic. Some countries have reacted more vigorously than others. We’ve seen that in all stages of the pandemic (and now again with the vaccination roll out).
Some companies have reacted more vigorously than others, to the changing circumstances. Some have held back and will wait until it all passes by, others have transformed immediately to new business models. For them flexibility is key.
The recent IBM CEO study highlighted that, in the light of the COVID-19 pandemic, “Outperformers – in clear contrast to Underperformers – report a heightened emphasis on partnerships. Asked to identify those factors that increased in importance most in 2020, 63% of Outperformers identify partnerships, compared with only 32% of Underperformers.” In the same report we can read that “47% more Outperformers than Underperformers expect to aggressively pursue establishing flexible partner networks”.
In other words, strategic alliances and partnerships are essential for the successful future of an organisation, and flexibility is key.
However, how then do companies with an established alliance portfolio respond to an external shock such as the COVID-19 pandemic? Brian Tjemkes, Associate Professor Strategy & Organisation at the Vrije Universiteit Amsterdam, and I have captured our thoughts in an article that has been published in the Annals of Social Sciences & Management Studies.
In the article we highlight how the emergence of the COVID-19 pandemic represents an external shock that leads to a variety of organisational responses. Recognising the pivotal role that alliances fulfill in how firms deal with external shocks, we present an alliance shock response framework. Our framework stipulates that a firm’s response to an external shock is driven by (1) the extent to which the alliance portfolio functions as a buffering mechanism (that is, narrow versus broad) and (2) how decision-makers categorise the external shock (that is, opportunity versus threat). Based on these two dimensions, we infer four prototypical alliance-shock responses: (1) shock-shaping, (2) shock-adaptation, (3) shock-stabilisation, and (4) shock-absorption.
You can download and read the full article: Alliances and COVID-19: An Alliance Shock Response Framework here.
Both the IBM study and our own article highlight the importance of alliances in uncertain times. In earlier studies we have seen already that you don’t “just do” alliances, because then you are destined for failure. Successful alliances are grounded through a structured approach. This approach and methodology also forms the foundation for my work.
I’m curious, how do you ground the success of your alliances and partnerships?