Two new, emerging best practices in alliance management

Posted: 7/4/2009 by Norma Watenpaugh

The ASAP 2009 State of Alliance Management Report looked at thirty-six commonly recognized best practices of alliance management and benchmarked them across the community of respondents representing 431 companies. This year the researchers looked a bit deeper into innovation alliances and identified two new emerging best practices. While innovation alliances were found to be more treacherous in terms of likelihood for success than other types of alliance, these two practices yielded up to 15% more sales for those companies that employed them.

How do these practices generate more productive value?

First, a practice termed Specialization. It was found that companies that have a large variety of alliance functions generate more sales from products that are both new to the market and new to the firm than companies that do not have such a variety. In Specialization, it was assumed that by bringing together different functional perspectives, a broader set of skills were brought to focus on bringing innovation to market.

The second, called Hierarchy referred to a practice that centralized decision making power with regard to alliances. These companies also generate more sales from products that are new to the firm than companies that do not centralize decision making. This applied to decisions affecting partner portfolios rather than day to day, operational decisions within a partnership.By looking across a portfolio, alliance executives could make investment decisions that allocated resources to high value partnerships and to disinvest in lower value ones.It also allowed a look across alliance valuation across multiple functions, business units, or product lines, creating greater synergy in optimizing alliance value.

We look forward to hearing more detail on these best practices as research continues.

The full report is available in the members library of the Association of Strategic Alliance Professionals. http://www.strategic-alliances.org

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