Two companies interested in forming an alliance might think that they share
mutual goals. Unfortunately, that's not always true, according to Larraine
Segils, an international consultant specializing in strategic alliances. She
found that 55 percent of all alliances failed within three years, while Anderson
Consulting (AC) found that 61 percent of all alliances are either failing or
Why are so many alliances doomed to failure? Segils found incompatible
corporate personalities were the problem 75 percent of the time, while 58
percent fail because of incompatible project priorities or personalities.
Additionally, AC, in Dispelling the Myths of Alliances, blames alliance
failures on five widely held myths:
Both sides should do their homework first. Before signing an alliance, Segils
recommends the two companies should use an alliance professional to hammer out a
few details--a pre-alliance agreement.
Before meeting, executives need to prepare themselves with a checklist of
issues to be discussed, from intellectual property rights to time expectations,
ownership decisions, and much more. These efforts provide a better
understanding of each companies business culture, goals and needs, Segil
Such meetings usually last about a half-day, and are based upon conversations
she has had with both companies previously, as well as the checklist of
questions she provides both parties before the meeting.
Companies that don't take the time to develop a pre-alliance agreement might
find their alliance isn't what they hoped for. For example, the deal could
become one-sided, she said, or it could completely fall apart.
If an alliance begins to breakdown, it's still not too late to seek alliance
counseling. At that point, however, the relationship has been burdened with
hard feelings and suspicion, making it harder to get things back on track.
Usually, such problems can be avoided by working with a pre-alliance counselor,
For further information on alliances and pre-alliance counseling, readers can
check out information available from the Association of Strategic Alliance
Professionals (www.strategic-alliances.org), Anderson Consulting (www.ac.com),
Larraine Segil's site (www.larrainesegil.com) or the International Center for
Alliances, Networks and Strategic Innovation (www.icansi.com), for a start.
Vicky Nolan joined the IGN staff in October 1999. She's best known for inventing fire, the wheel and swiss cheese. She can be reached at firstname.lastname@example.org