Steve Steinhilbers book on strategic alliances was face down on my desk when some words on the back caught my eye. Even though I read the book and know Cisco is very focused on establishing alliances for the right reason I did not realize the size of the impact of alliances to Cisco yet. On the back of the book it was mentioned that Alliances deliver Cisco “a cumulative value of more than $4.5 billion annually in business impact”. That sounds impressive and as this little sentence triggered my interest I looked a little further. In the year the book was published (2008) Cisco had an annual turnover of nearly $40 billion. This means that more than 10% of that revenue is impacted by the alliances Cisco established. It is a significant part of Cisco’s revenue. I would argue that Cisco is an alliance brand.
That triggers a question to define what an alliance brand is. An alliance brand is a brand that creates a significant amount of the revenue thanks to alliances and has a solid implemented set of alliance capabilities and best practices. In Cisco’s case the revenue element is there and as Steve’s book highlights they have seriously invested in establishing the alliance capabilities and best practices in the Cisco organization.
Other examples of alliance brands are among many of the pharmaceutical companies. The CEO of Ipsen for example presented at the Biopharma conference in Basel earlier this year about the impact of alliances on his business. Basically without alliances Ipsen would not be the company they are today. Marc de Garidel mentioned in his keynote that alliances are responsible for more than 40% of their business. To manage this essential part of the business alliance capabilities are solidly implemented and alliance management is reporting directly to the CEO.
Philips Electronics is well known for their alliance with Sara Lee and the resulting Senseo coffee maker. This alliance is in place for about 10 years now and has brought the Senseo to the market in many countries. The Senseo has helped to change the coffee market. Other Philips alliances include amongst others the PerfectDraft alliance with InBev and the Nivea for Men alliance with Beiersdorf. Philips is also know for having a thorough set of alliance capabilities and best practices implemented for which they in 2007 received the ASAP Alliance Program Excellence award. In the public statements however Philips generally makes no remarks on the contribution of alliances to the topline of the organization. For Senseo we can safely assume that after 10 years the Senseo brand is an alliance brand: without the alliance the Senseo would most likely not exist.*
This brings up another question: can we really focus on one (overall) brand to conclude if a company has an alliance brand? Cisco and Ipsen create apparently all alliances using their main brand. In the Senseo example we see the creation of a separate brand that becomes the alliance brand. Bringing that back to the opening statement: how important is it for an organization to be recognized as an alliance brand?
Being recognized as an alliance brand can help to accelerate growth of the organization. With proper alliances an organization will be able to create achievements they would otherwise not easily create alone. It will also act as a magnet, attracting more potential partners that will approach your organization to do things together. After all you are recognized as an organization that knows how to partner. This also adds another reason for having a solid alliance process and capabilities implemented. Partner selection has a different starting point when being approached rather than when approaching others. It is as such essential to properly select, filter if you want, to end up with successful alliances at the other end of the funnel.
How about your organization, do you have an alliance brand?
*note: Philips is client. The paragraph on Philips above is based on publicly available information and represents my own view.