Delivering Business Growth Through Strategic Alliances

The theme of our fourth Cog:ent Group meeting, held at HSBC Green Park, Reading was “Delivering Growth Through Strategic Alliances”. If you want to get a sense of the overall discussion, you can view the summary slides here.

This blog highlights the key themes that arise when you bring together the experiences of 15 ambitious business owners, combine it with the experience and knowledge of consultants, accountants, solicitors and academia and then discuss the theme in depth.

So what is in a theme?

Seeing relationships through a strategic lens

The activity of drawing your business relationship system throws up some interesting shifts in thinking. A significant number of participants commented on how they had started to see an existing relationship in a different way. For one participant, this new perspective opened up potential routes to two overseas markets. We suggest that you try this for yourself.

What’s behind that handshake?

It seemed that we could have spent the entire day debating how much needs to be written down. Is a handshake just enough? How detailed does the alliance plan need to be? To what extent is the plan the contract?

However, there was a common view that it’s essential at the outset of any strategic alliance to have a clear and common view of its purpose, the objectives and the commitment required from all parties to make it successful. You need agreement on these things. Writing this down helps to clarify understanding and share that understanding with other people. It’s amazing how disagreement can fall around the smallest misinterpretation or a missing word, so make sure your assumptions have been well and truly checked.

That said, given the changing nature and complexity of the world, there is a need to balance formality with opportunity.

As a slight aside, for those of us who believe in the power of a handshake, it’s interesting to discover that scientific evidence supports what we intuitively feel – the handshake touches neural circuits inside the brain that predispose a person toward positive feelings of competence, trustworthiness, and it opens a relationship of positive cooperation while suppressing negative feelings and avoidance behaviour. But, for those of us who believe in the power of planning, it is interesting to note that  a psych professor at Dominican University of California found that people who wrote down their goals, shared them with others, and maintained accountability for their goals were 33% more likely to achieve them, versus those who just formulated goals.

Optimising risk

As with most things in life and business, strategic alliances are all about optimising risk and sharing the reward. So understanding what the risks are, how to protect yourself against them, what’s required to deliver the reward and how the reward will be distributed is critical. The form and business model of the alliance needs to help those involved to balance these things.

If you’re inexperienced at undertaking strategic alliances, the risk increases. So, where might you seek guidance and support?

The power of the network

Finally, it’s interesting to note that two of the Cog:ent participants have entered into a strategic alliance that has already delivered in excess of £100k of turnover at a good margin. And, a further two started to explore mutual benefits then and there in the meeting!

So, some key questions to answer are:

• How might your existing relationships help you to achieve your strategic goals?
• To what extent do you have agreement in your strategic alliances?
• How does the form of the alliance help you to fairly share risk and reward?
• What needs to be written down to confirm your agreement?

The Cog:ent Group meetings are a result of a collaboration between HSBC, Chantrey Vellacott accountants, Pitmans Solicitors and Telos Partners. To discover more about these meetings please click here.

If you would like to explore how strategic alliances might help your business and how Telos can help to support you in the process, please contact acampbell@telospartners.com.