Sales Information |
Revenue Growth Through Alliances
Any company in today's global economy must eventually face the issue that if it is not growing, it will be expiring. For most companies, mergers and acquisitions are too risky to be a revenue growth option. Organic growth, though low risk, may have some considerable limitations. A third option - alliances - just may be the right blend of risk and reward to accelerate your company's revenue engine. Over the past 15 years, the successful formation of alliances has emerged not only as a critical management competency but a revenue weapon as well. The top 500 global companies average 60 major alliances each. In 1999 Andersen Consulting Global Alliance Survey stated that alliances account for an average 26 percent of Fortune 500 companies' revenues, up from 11 percent just five years earlier. What is more, companies estimate that alliances contribute 35% to market value with an expectation that alliances will contribute 48% to market value by 2007. Clearly, being a good business partner, regardless of the duration and objective of the alliance, has become a key corporate asset and competency. If your firm has not successfully engaged in collaborate alliances, or if it has tried and failed, this article is for you. We will first briefly outline the advantages of deploying an alliance strategy to grow revenues. We'll then take a look at the perils, goals, and principles of alliance management in hopes of encouraging you to engage professionals (such as Plenum Revenue Group) to seek out and manage your alliances. Alliance Overview Alliances are a fast and flexible way to access complementary resources and skills that reside in other companies and have become an important tool for achieving a sustainable competitive advantage. Alliances require leveraging valuable internal resources and current competitive advantages in new and innovative ways. Alliance formation requires a minimum amount of cash and can be formed with a number of alliance partners horizontally or vertically in numerous markets. However, as alliance formation is a fairly new growth option for most companies, they tend to bring some increased risk to the inexperienced. Regardless, growth through alliance formation has seen an almost explosive energy in the past fifteen years as a vital secret and silent competitive weapon by many companies. Most alliances formed between companies are not made public, either because the companies choose not to publicize the collaboration, they want to keep the deal confidential for competitive reasons, or because business journalists do not see them as "sexy" as mergers and acquisitions. Finally, many companies have learned that an alliance strategy is a good preliminary step prior to an acquisition. If an alliance will not work, it's more likely an acquisition would not have worked as well. But the lesson costs are far less with an alliance - typically 25% - 35% of the cost of a doomed acquisition. Alliance Management With all of the upside potential associated with collaborative alliances why do almost half fail? Is it possible management devotes more time to seeking out and screening potential partners in financial terms than to managing the partnership in human terms? Is it possible management promotes the future benefits of the announced alliance to their shareholders but fails to help managers create those benefits? Our long experience in alliance formation and management confirms such, because we have seen too often that management fails to provide a clear long-term objective for the alliance. Too often the goals and objectives for the alliance are not clearly communicated to the rank and file so that they may contribute to its success. Too often the alliance dies a silent death from neglect. The critical skill . . . will be that of coordinating units that cannot be commanded but which have to work together. Peter Drucker Managing an alliance can be frustrating: coordination must be the rule; diplomacy is a necessity; and the internal politics of allies are often confounding. The process of managing an alliance is one of the best kept business secrets. It truly has been a mystery because it is not taught in any business school. Neither has it been effectively written down in any books or magazine articles. The Shift From Strategy to Execution Once an alliance has been initiated, responsibility for its success shifts from the strategists, deal makers, and top executives to the champions, alliance managers, and liaisons who seldom received any training to accomplish their task. It is amazing how innovative and adaptable some alliance managers have been to make their alliances "work." However, for those alliance managers who lack such skills, the result has often been alliance failure, frequently with severe repercussions on their companies or to their careers. Each alliance begins with a stated mission and purpose. As time moves along, alliance leaders are asked to answer for the alliance, to guide its course and to energize its people. Each new challenge creates an opportunity and presents a problem to solve. The Ultimate Goals The ultimate goals in alliance management are achieving the desired strategic returns and maintaining a win/win relationship. To successfully attain these two goals, the alliance manager must be aware of several critical factors that distinguish the management of cooperative ventures from usual corporate experience: Managing the extended company requires new and different set of skills and control systems; The role of the middle manager in alliances changes significantly from tactician to strategist; Flexibility will be vital in adapting to change and maintaining a win/win condition; The differences among the partners' strengths, goals and styles will create conflicts as well as opportunities for success; Surrounding all actions must be a spirit of cooperation, constantly built and reinforced by the alliance team; and The process of governance for the mutual interests of all alliance partners is as critical as achieving the desired results. Successful alliance management requires the mastery of these factors by knowing the time-tested principles and processes on which they are based. Critical Alliance Management Principles The architecture of the alliance can be founded on two essential management principles: Integration The application of these two principles will be required on virtually a daily basis. Integration Integration empowers the alliance. Without it, the alliance will never hold together. Integration cannot be ignored. The alliance partners develop linkages and shared ways of operating so that can work together smoothly. They build broad connections between many people at many organizational levels. Partners become both teachers and learners. Without getting into detail in this brief article, integration can be accomplished through: Leadership (champion, alliance manager, management) Teamwork (cross-functional task forces and teams) Control by coordination (cross-functional decision making and problem-solving) Policies and values (establishing and maintaining trust) Consensus decision making (formal decision making) Resource commitments (technology, personnel, capital, etc.) and Lateral liaison (effective and timely communication and decision making) Interface Management Interface management involves the point of contact between two internal departments or any differentiated groups. Problems and complexities, whether organizational or technological, lie at the interfaces. The role of the alliance integrator is to manage the interface to maximize people's ability to get the job done. Prior to alliance commencement, interfaces should be identified so that the potential points of conflict can be isolated beforehand and personnel assigned to head off potential problems. All Alliance Partners Must Be Winners The two basic objectives of management are to adapt the changing needs of the alliance and to get results. Maintaining the win/win condition is essential; with the presence of this condition, no strategic plan, no legal structure, no formal agreement and operational schedule will overcome such a fundamental deficiency. An alliance partner who perceives a losing condition will not perform well and may eventually undermine the alliance itself. Steven Mednick is President and Founder of Plenum Revenue Group, LLC. Based in Newport Beach, Calif., Plenum is a revenue development company for emerging and medium sized businesses. Working shoulder-to-shoulder with its clients, Plenum actively seeks out and delivers tangible revenue opportunities for its clients that drive incremental top-line growth and bottom-line results. If it's time to begin working on your business by exploring revenue opportunities that will position your company for future top-line growth and bottom-line results, please call us today at 949.218.8657 or visit our website at http://www.plenumrevenuegroup.com
MORE RESOURCES: Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exiting |
RELATED ARTICLES
9 Packaging Problems That Lose Sales You have a great product, but it's not flying off the shelf. Is one of these packaging problems turning sales away?1) You don't understand your market. The Top 10 Myths About the Sales Profession Myth 1: Sales People are all Shady!In the Broadway play "Death of a Salesman" Willy Loman was a down and out emotionally spent Salesman trying to understand his life after 34 years of traveling up and down the roads selling his products. The negative stereotype of a Salesman is rooted deep into the subconscious of society. Why Are We All So Afraid? What can strike terror into the heart of even the most successful sales professional or entrepreneur? Cold Calling. What can crush self-confidence, destroy self-esteem and leave even the most seasoned sales professional quivering with humiliation and defeat? Cold Calling. Open Source Selling? The Next Evolution? The Next Revolution "Open-source" is typically found in the Information Technology area as a way to provide an open standard and framework for building software projects. The major benefit of "open source" to software programmers has been dramatic. 3 Tips For Getting Through The Voicemail Screen How many times have you heard that you gotta get past the gatekeeper and get to the decision-maker to make the sale? Countless books and sales trainers have talked about this for years. Much of this advice was written for a world without voicemail. A Pause For Thought You can have your cake and eat it.What is it that makes the sale of information products so appealing?Is it the fact that the only storage space required is a minute spot on your computer's hard disc. Tapping The Potential Of Your Customers Business owners of long standing know the cardinal rule "take care of your existing customers first". Today especially we see business owners looking constantly for the new customer. Dont Let Rattlesnakes Scare You Recently I was out trail running along the South Fork of the Yuba River. The Yuba River is in a beautiful canyon running east-west through the middle of Sierra Nevada Mountains of California. Secrets to Buying Without Being Sold Have you ever asked yourself, now how did I let that guy sell me on something that I had no real need for at the time? Do you ever get a sneaking suspicion that your probably not going to really use whatever it is that your buying in the way that it was presented? If this is true which is often the case, then why in the heck do we give up our hard earned money for something that until we heard some sales spiel, we really had no need or want to have.Please allow me to expose what marketers do to us on a regular basis in an effort to develop those perceived wants, needs and desires in us which drive us to buy what is being offered. Mindset Over Materials: The Secret Weapon of Sustainable Sales Success Long-term sales success has less to do with skills or knowledgethan you might think. Nor are stunning brochures or excellentproducts guaranteed to make one iota of impact over time. Selling Commodities "How do you create a perceived value to differentiate yourself from the competition, when you are both selling a commodity?" That's a question I'm often asked in my seminars. It uncovers a problem that is spreading to almost every industry. Sell With KISS, As In Keep It Simple, Stupid One of the most useful and fundamental communications lessons that has been repeated to me over the years, ever since my earliest days of formal business training, is the fabled, famous, and fabulous "KISS" formula.In my college marketing class we were told "Keep It Simple, Stupid!" When I entered my three-month sales-training orientation at New York Telephone way back in 1968, it was a more refined "Keep It Short and Simple. How to Create Material That Will Get You Sales Now! WHY ARE YOU WRITING THIS BROCHURE OR SALES LETTER? A great deal of money is wasted each day putting out useless sales and marketing material. Material that was written for the wrong reason or the writer forgot its purpose after he started writing it or fell in love with his own words. The Top 10 Ways to Add Extra Value Everyone wants the best possible value in every transaction, but each of us defines "value" in different ways. Some customers want the lowest price, while others will place a higher value on reliability, convenience or things like color, popularity (think Pokeman cards!) or durability. Telling the Value Story You arrived on time and completed your calculations. You worked up a presentation of all the things you're going to do and items included, going over each item carefully. The Truth Behind Linear Selling: Why It Can Make Prospects Run The Other Way Sean works for a major telecom company.During one of our coaching sessions, he told me, "I've been diligent about following the sales process that my company believes is requiredto make a sale -- but, for some strange reason, my prospects don't want to fit into that process. The Wall of Defensiveness: 7 Ways to Tear It Down Have you ever gotten frustrated when you realize that your prospects keep stereotyping you as a "salesperson"? And because of that, they don't give you the trust and openness that you deserve, and that are essential if you're going to help them solve their problems?That's what's been happening to Michael, who calls companies to set appointments with decisionmakers. "I have a great product that I'm passionate about," he told me, "but when I call prospects, they immediately start treating me as just another salesperson who's trying to sell them the same type of product that others have tried to sell to them in the past. Connecting with Customers I just got off the phone with a friend of mine. Business is up he said, but he didn't know why. Sales Training from the Ghostbusters Picture this scene from the 1984 smash comedy movie from Columbia Pictures, Ghostbusters: Dan Aykroyd and Bill Murray, aka? the Ghostbusters, are involved in a heated meeting with the Mayor and the Head of the local environmental agency. The city is in shambles because a legion of evil spirits has invaded and is currently wreaking havoc and chaos throughout the land. Sales 101: Handling The Angry Customer I am often reminded of the following true story whenever I encounter a hostile customer or prospect, witness a scene where someone is losing their cool or observe someone getting chewed out for something that they may or may not have done.No one enjoys being yelled out, cursed at, bullied or manhandled in any form, whether physically or verbally. |
home | site map | contact us |