Revenue Growth Through Alliances plus articles and information on Sales Any pany in today's global economy must eventually face the issue that if it is not growing , it will be expiring. For most panies, 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 aelerate your pany's revenue engine. Over the past 15 years, the suessful formation of alliances has emerged not only as a critical management petency but a revenue weapon as well. The top 500 global panies average 60 major alliances each. In 1999 Andersen Consulting Global Alliance Survey stated that alliances aount for an average 26 percent of Fortune 500 panies' revenues, up from 11 percent just five years earlier. What is more , panies 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 bee a key corporate asset and petency. If your firm has not suessfully 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 aess plementary resources and skills that reside in other panies and have bee an important tool for achieving a sustainable petitive advantage. Alliances require leveraging valuable internal resources and current petitive 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 panies, 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 petitive weapon by many panies. Most alliances formed between panies are not made public, either because the panies choose not to publicize the collaboration , they want to keep the deal confidential for petitive reasons, or because business journalists do not see them as "sexy" as mergers and acquisitions. Finally, many panies 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 municated to the rank and file so that they may contribute to its suess. Too often the alliance dies a silent death from neglect. The critical skill . . . will be that of coordinating units that cannot be manded 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 suess shifts from the strategists , deal makers, and top executives to the champions, alliance managers, and liaisons who seldom received any training to acplish 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 panies 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 winwin relationship. To suessfully 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 pany 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 winwin condition; The differences among the partners' strengths, goals and styles will create conflicts as well as opportunities for suess; Surrounding all actions must be a spiri .