Over the last few difficult months one of the most used phrases which is now becoming a cliché is “adjusting to the new normal”.

This suggests that people have changed, or have we, or will we revert to type and go back to our old bad habits?

One such bad habit is the number of businesses that fail to understand the power of working together with others. They ignore the potential of the strategic alliances they have developed over the years.

I would like to ask you a question:

“Do the business alliances you have in place enhance your business and provide you with the profitable clients you need for the future?”

If the answer is no, then you need to take this opportunity to review how you establish and manage your strategic business relationships.

For many people, the reason for a strategic alliance is all about client referrals, but this is too narrow a focus. In the future, the most successful and profitable business partnerships will be those that agree to achieve common business goals by sharing their strengths and resources.

This means likeminded businesses can provide their services to each other’s clients while remaining independent in their business operations.

This is important to remember as often people confuse a strategic alliance with a joint venture. 

The major difference between a strategic alliance and a joint venture is that in a joint venture all the companies involved set up a separate legal entity with a new identity. Whereas in a strategic alliance, those involved in the agreement work as a separate individual business. This means that even though the arrangement is an informal agreement between the companies involved, the responsibilities and work are clearly defined for everyone.

A solid strategic alliance which has relationships with the type of clients that fits your service or marketing proposition, will over time yield many benefits.

The duration of the relationship is decided, based on the goals of the alliance and the gains and needs of the strategic partners.  This allows companies to grow their business at a much faster pace than they would have done working alone.

The secret to success is to ensure you forge true alliances and not just a fleeting initially profitable but ultimately unsuccessful long-term partnership.

It is best to remember these 8 key points that should bring long lasting success:

1. Both sides in any partnership must bring something to the relationship. So be clear about what these are and play to each other’s strengths. Neither business should be expected to prop up the other. If that happens the alliance will fail.

2. Be clear about why this relationship matters to the future strategy of your business. Also find out why any strategic partner wants to be involved with you?

3. Establish clear objectives. When you know why someone is in partnership with you it begins to be clear why they need you and you need them. This helps clarify what everyone needs to deliver, and soon a plan can begin to be prepared to achieve this.

4. You should never be afraid to invest in any strategic alliance. Remember an investment does not have to be monetary. You can invest time and ideas to make a business relationship work.

5. Clear communication is vital, always ensure that all relevant information is transparent and available. This can only strengthen the partnership and remember hiding information impedes trust and eventually destroys a relationship.

6. Integration helps, do not be afraid to create several points of contact across your business and any alliance. This can only build a long-term relationship and create confidence in the future.

7. Put a formal structure in place this can provide solid foundations and ensure the relationship works for both sides. It can also ensure that clients receive the best service and both propositions are profitable.

8. Never forget the most important factor in any strategic alliance, trust. Be honest with each other and have regular meetings to monitor progress, share ideas and resolve any issues.

If you bear these in mind, establishing long lasting and profitable strategic alliances with other business leaders becomes a lot easier. I will leave you with a quote from Henry Ford:

“Coming together is the beginning. Keeping together is progress. Working together is success.”

So, who will you work with in the new normal?  

John Joe McGinley Glassagh Consulting September 2020