Do you perform a regular health check on your alliances?

Last week I wrote about mid year performance reviews and briefly touched upon the necessity to have regular evaluations for alliances as well. Now, let’s dive a little deeper into the topic of regular evaluations and health checks on your strategic alliances.

If it ain’t broke, don’t fix it!
Research indicates that many alliances fail, in fact the latest study of the Association of Strategic Alliance Professionals indicate that the average success ratio for strategic alliances is 53%. That is just barely over the midpoint between success and failure! The reasons that the other 47% of the alliances fail are often reasons that could have been prevented.

These reasons are mostly on the soft side of the relationship. An area where traditional metrics will not indicate us how well we are doing or where we need to improve. As one of the partners in an alliance you might feel that the alliance is fully under control.

Perception is reality, so why bother: if it ain’t broke, don’t fix it! On the other hand, your partner has their own view on the reality of the alliance. Their perception might be different than yours!

A few years ago a new client shared with me a previous situation where they were surprised that their partner suddenly terminated the agreement. For the client is was a very healthy alliance that was delivering more than expected. However their partner was even happy to pay the penalty fees for early cancellation. These partners never really understood the others partner’s perception of the alliance with the unbalanced result of one happy and one very unhappy alliance partner.

The main purpose of a health check is to assess the perception from both partners and to identify the areas that need attention for improvement of your alliances. The goal is to steer clear of broken relationships and work actively on relationship improvement which will lead to healthier alliances.

In my clients previous case, a health check could have helped them in making their misbalance visible and thus could have allowed for corrective measures in their alliance.

No time
“All very nice Peter, but we are already too busy, I have no time for yet another extensive task!” 

I understand the objection, but it is like sacrificing your health to make money and then spending the money later on in a dreadful attempt to regain your health. Maintaining health is in general easier than regaining it. That applies to both personal health as well as relationship health.

Performing a health check will indeed require some of your time to provide your input. However, there is no need to do all the work for the health check yourself. In fact, it might be better to have a third party run the health check to maintain objectivity and independence. The third party will organize the health check, collect the findings and generate recommendations for improvements which will then be discussed with you and your partner.

Together with your partner you will agree on an action plan. To improve your relationship you need to own that action plan and you need to ensure that you actively work together on the agreed improvements.

Check again
It does not stop after one health check: you need to check again! A health check requires a regular interval. Depending on your relationship that might be every 3 or 6 months or yearly. The purpose is to identify the progress made and to identify new areas for continuous improvement.

Next week I will highlight some of the ways health checks can be performed.

What is your experience with conducting health checks on your alliances?”


PS: Within the context of this post I am focussing on health checks for strategic alliances. However these are almost equally applicable for any other type of strategic relationship such as channel partnerships, collaborative customer – supplier relationships and joint ventures!

Some additional reading: