When we talk about alliances, we tend to focus on the external component: collaborating with other organisations. By itself that is correct, after all alliances are collaborations between two or more organisations to accomplish a goal that one of the organisations cannot achieve on its own. So we do need external parties! However, alliances have a strong internal component as well and that is about internal collaboration, or in broader terms, it’s very much also about a company’s culture.
If a company has a self-focussed culture, it might have a strong focus on control rather than on trust. Such a company will probably have siloed departments, where every manager creates their own kingdom. You might see them, from a procurement perspective, trying to get the best deal for the company rather than a great deal for both parties. They might acquire more companies than they collaborate with and if they collaborate with external organisations they might create more joint ventures with a controlling majority stake than contractual alliances. In addition, as the silos don’t collaborate and communicate internally, there may be circumstances when their people meet each other at the external company’s location. Some of these external companies (who also lack a collaborative culture) will try to misuse this lack of internal collaboration for their own benefit.
A collaborative culture, on the other hand, has a strong focus on how people are treated, inside and outside the organisation. The culture will be open, transparent and communicative with a focus on helping each other succeed. It will have a stronger focus on trust rather than on control and you will often see these elements reflected in the company’s values too. Companies with a collaborative culture tend to negotiate more based on the Getting to We* methodology. Contracts with external parties, suppliers and alliance partners, will as such, be fair with the best interests of both parties in mind. Not surprisingly, you also see that these companies have more contractual alliances and less joint ventures and acquisitions.
Culture is one of the strongest influencers of a company’s performance. A collaborative internal culture will help external collaboration flourish. Companies with a collaborative culture have a good partnering reputation and will therefore be a partner of choice for many.
PS: A collaborative culture and how you can influence it, as one of the foundational elements of successful alliances, is one of the topics we discuss in our Alliance Masterclass: click here to learn more.