ALLIANCE COMPETENCE: KEY CAPABILITIES FOR SUCCESS

Abstract

The formulation of alliances and partnerships is a global trend that is growing at an exponential rate. In the United States, alliances now account for 18% of the revenue of Fortune 1,000 Companies—and this figure is expected to exceed 30% by 2004. In Europe, alliances are growing at an even faster rate, and already represent over 30% of revenue. According to recent surveys, 82% of United States executives believe alliances will be a prime vehicle for future growth, and managing alliances is consistently mentioned as one of their three biggest challenges.

Developing a competence in alliances and other collaborative arrangements, therefore, is now high on virtually all corporate agendas. Yet the ability to successfully manage alliances remains elusive. If current trends continue, about 70% of all alliances will fail to deliver the expected results.

In most cases, failure is attributed to mismatches in corporate culture, poor communications, or some similarly high-level cause. This conventional analysis camouflages some specific and fundamental capabilities that are critical for alliance success. These capabilities address facilitating and maintaining alliance-like thinking and behaviours that are a match for alliance strategies. The ability to develop the appropriate thinking and behaviour to be a valued partner is a distinct corporate competitive advantage.

Using recent examples in the oil and gas industry in Canada and Australia, this paper details three key capabilities that are critical to alliance success. Some new approaches to effective partnering in any environment or industry are offered, to help in reframing the challenges that inevitably arise.