Building collaborative alliances.

Collaborative alliances and partnerships with other companies can often be used to build world-class capability and global reach, rapidly and cost-effectively. Developing strategic partnerships makes sense when what‘s needed is a highly-specialized capability in a fast-moving field, or when significant risk is present. Through these arrangements, companies can concentrate on learning their partner’s skills while at the same time building barriers that discourage competitors from entering their markets. Some companies don’t develop core products themselves anymore. However, they make sure they still know more about them than anyone else does (as an example, Sun Microsystems knows more about circuit-board technology than any of the specialized circuit-board companies that supply it with products).

Canon has been involved in simultaneous partnership agreements with Texas Instruments, Hewlett-Packard and Eastman Kodak, all competitors at that time. Canon used its patents as bargaining chips in cross-licensing technologies, believing that you can only enter into cooperative alliances when you’re able to bargain from a position of strength. Partnerships involving competitors provide access to new markets or technologies, or they allow the creation of products that neither partner can produce on its own. However, such alliances can raise sticky issues about what information to share and what to keep proprietary. In the world of collaborative competition, negotiating skills become as important as technical or operating skills. While collaboration between rivals often makes sense, the companies involved must make sure that cooperation makes their ability to compete stronger, not weaker. Questions that have to do with rethinking strategy and redeploying assets in response to a collaborative environment are: When is it wise to enter into relationships with competing companies? How can a company strengthen its individual identity at the same time?

For a partnership to bear fruit, it should offer both parties a win-win opportunity based on a common vision and strategy, where each partner clearly understands what it might gain or lose from the arrangement. It’s important that partners not only offer the best products or services available, but that their principles, policies and corporate cultures are compatible with yours. Successful alliances depend on shared values and cultural traits. Differences in structure, decisionmaking processes and measurement systems can cause communication gaps and operating tensions. For example, a joint venture involving managers from two companies who work under different bonus systems will quite likely suffer the ill effects of opposing priorities.

Partnership is a win-win relationship where both sides give a little to get something. You have to put yourself in the other guy’s shoes to get a win-win relationship - structuring deals that make sense both ways. Start by role playing how they’ll react to your offer. You need to have each side committed to the deal to make it work effectively. When partnering with a much bigger company, an important consideration had to do with how you relate to the key players there. Obviously, they should be people you feel you can trust. Their style (casual, formal) should match your own. They should have a non-bureaucratic approach to doing business so the deal gets done quickly, without a lot of nit-picking and haggling. Speed is crucial. “Let’s start working on it today and we’ll paper it over as we go forward.” Otherwise, working with a large company can take forever, slowing you down and killing the buzz.

Find someone in senior management who will prosper if this partnership or alliance works. He’ll then lead you up through the ranks to reach the CEO or whoever else you need to work with to get the deal done. Spell out issues like licensing and pricing first. But remember, alliances are nothing but alliances. If people’s needs change, then all the paperwork in the world means nothing. Don’t worry about the big guys stealing your ideas. Gaining time is what matters most.

Go to trade shows, wear a badge, be obvious and easy to find, and go after who you want. Approach other parties with, "Here's who we are. Here's what we do. Here's the kind of transaction we're looking for." Be very directed, focused, to-the-point in meetings. Make it clear what the price range is and that it’s not negotiable. When you partner with another company, make sure the deal enhances future career possibilities for everybody in your company.