Like alliances and alliance management, the term governance is also a broadly used term that can mean many things to many people. In “Alliance Advantage”* Yves Doz and Gary Hamel coined the definition for alliance governance as: “how an alliance is managed, how it is organized and regulated by agreements and processes, and how the partners control and influence its evolution and performance over time”.
In other words, alliance governance is a system that defines how the alliance is organized and managed. A good alliance governance design is crucial for the long lasting success of the partnership.
Now, the question is: “What is the best moment to start designing the governance for your alliance or joint venture?”
A governance system covers many aspects and I don’t believe that there is one specific moment in which you will sit together to design your governance system. Instead, it is a continuous process alongside the whole process of creating and managing alliances and partnerships.
At the moment of writing this article, I’m reading “Getting to We”* by Jeanette Nyden, Kate Vitasek and David Frydlinger. “Getting to We is about negotiating the guiding principles of the relationship first and then and only then negotiating the specific aspects of the transaction(s).”
In their book, Jeanette c.s. describe the Getting to We process as a process with five distinct steps:
- Getting ready for WIIFWe (What is in it for We) — This step is all about three foundational elements: trust, transparency and compatibility.
- Jointly agree on a shared vision for the partnership — A shared vision gives a partnership its purpose beyond a series of transactions.
- Collaboratively negotiate the guiding principles for the partnership — Guiding principles define how partners behave in a partnership and, not surprisingly, should be focused on driving highly collaborative behavior.
- Negotiate as We — only in step 4 it is time to start negotiating a deal.
- Living as We — now partners execute the deal while maintaining focus on the shared vision and guiding principles.
What I like about this approach is that it puts relationship before a deal: in order to create healthy partnerships that focus on being beneficial to both partners. In many cases we see that partnership creation has its focus on the deal instead of the relationship, which often results in troubled alliances.
What you will also see in the outline of the “Getting to We”* process is the fact that quite early on there is already an emphasize on trust, transparency, a shared vision and setting guiding principles. These are essential foundational parts of a governance structure.
So, when to design your governance model? I believe that bringing the conversation about the governance elements quite early on into the alliance creation process, like in the “Getting to We” process, can be highly beneficial for creating a solid foundation of a successful partnership, joint venture or alliance.