Strategic alliances have been the fastest growing form of organisational
activity of the past decade. Drawing on Roffey Park’s research, Linda Holbeche
highlights some of the opportunities alliances offer HR
Are the days of the stand-alone organisation numbered? With global
competition, technological advances and the demands of the customer for better,
cheaper, faster solutions delivered around the clock, few organisations can
maintain competitive advantage without acquiring new means of production, distribution
or access to talent.
A typical growth strategy, especially in mature industries, is to acquire
other companies – however, an even bigger workplace trend is the move towards
working in various forms of strategic alliance with other organisations. While
cross-border direct investment is expanding fast, alliances are increasing even
faster, shaping the landscape of the 21st century.
Partnering is the buzz word, whether the strategic alliances are for
political/military purposes or purely economic.
Alliances take many forms, ranging from informal networks on the one hand to
formal joint ventures on the other.
No sector is immune – witness the pressure coming from the UK Government on
public sector bodies to act in joined-up ways to achieve better outcomes for
the public. Public/private sector alliances are on the increase.
Whatever the sector, few businesses will remain untouched by alliance
activity as corporate boundaries become less distinct and stable.
Given the strength of the trend, it is surprising that the number of
alliances and their failure rate have not hit headlines. Alliances are often
intended to be temporary, but many fade away long before achieving their goal
because one partner or another backs out. Lack of trust is often at the heart
of the issue, although usually a business rationale is given to explain away
the costly failure.
The fact of the matter is that real partnering is difficult to achieve and
many strategic alliances, however sensible their objective, fail within a short
period. People issues have a direct bearing on the success or failure of an
alliance – which is why HR has a key role to play in making them work.
Most problems seem to stem from the neglect of the alliance relationship.
Alliances operate on the basis of shared governance or ownership.
Unlike an acquisition, where ownership is usually clear, alliances call on
partners to jointly decide which process should be used for nearly every aspect
of doing business.
In joint ventures, after the deal has been agreed and the contract makers
have moved on, the working out of how to make the alliance work calls for
constant bargaining, managing expectations, handling conflict and building
consensus among alliance partners and employees.
For many managers, whose experience has been within more conventional forms
of organisation, these skills may be under-developed.
Alliances can be especially vulnerable, because, against a backdrop of
competition, they require an extra degree of commitment and co-operation from a
wide range of individuals and groups of employees whose interests (and career
prospects) may be with their parent body.
Employees working in alliances for the first time will find themselves
moving in unfamiliar territory – rather than seeing others as competitors,
suppliers or clients, they are now expected to consider them partners with whom
collaboration is the order of the day. This causes people to ask themselves,
"How much of what I’m doing is confidential? Am I supposed to give away
[parent] company information in order to show willing? Where do my loyalties
lie?"
The day-to-day working through of such issues often causes people to act
inappropriately.
How HR can add value to strategic alliances
Given the importance of behaviour and relationships, HR has a real
opportunity to make sure a strategic alliance gets off to a good start – and
stays on track. Here are four ways in which HR can have a positive impact on
the success of the alliance:
1 Focus on creating a shared mindset
Help develop the alliance culture
Any alliance brings employees face-to-face with cultural differences. As the
alliance is being formed, HR professionals can play a key role by assessing the
likely impact of people issues on success. This usually involves carrying out
culture audits with both partners, sharing intelligence with HR counterparts
from the partner companies and identifying possible hot spots.
While cultural differences need not automatically cause conflict, tensions
are bound to arise. Successful alliance working involves surfacing and
addressing these issues. HR can facilitate the explicit negotiation of ground
rules in early meetings. This is where HR’s special value-added skills of
facilitation, negotiation and conflict resolution are useful.
HR can also help define the culture of the alliance. An alliance gives the
opportunity to break the mould of the parent companies – up to a point. Some
joint ventures become hotbeds of entrepreneurialism while their larger parent
companies continue to operate in time-served bureaucratic ways.
Adaptability is a key cultural attribute to aim for, and HR can help people
tread the line between having clear and agreed processes, and being prepared to
work with "shades of grey". Of course, this means HR professionals
also have to be as skilled as the people working within the alliance itself at
dealing with ambiguity, and able to translate potentially conflicting messages
into helpful action.
Support an open style of leadership and management
Roffey Park’s research highlights the critical importance of having the
right leaders in place at all levels. The style of the alliance manager is
particularly important in setting the tone for how the alliance will operate.
For example, if top managers adopt a "not invented here" attitude,
this will be echoed by staff in general.
Conversely, if top managers are determined to enable people to work together
effectively, they have to be role models for trust and collaboration. Leaders
need to demonstrate an open-door, problem-solving approach. They need to be
goal-focused and able to manage difference.
HR professionals should actively encourage and coach leaders, if need be, to
develop these approaches and create a climate where there are no hidden
agendas.
Foster relationship building
Understanding one’s partner’s needs is critical in relationship building. HR
can facilitate business meetings and encourage the establishment of
"mixed" teams to speed up the process.
Social gatherings can help break the ice. One chief executive of a joint
venture, whose employees remained employed by their respective parent
companies, hosted monthly social get-togethers for all staff. These informal
gatherings allowed employees from the two organisations to get to know each
other, share ideas and be updated on the progress of the alliance.
HR professionals need to have their fingers on the pulse to ensure alliance
workers are not out of the communications loop. HR can encourage both formal
and informal processes for two-way communication, relationship building and
creating a sense of purpose and progress.
2 Focus on performance
Build high performance work processes
HR should also be directly involved in building high-performance work
practices. There are two important aspects of this. The first involves making
sure the alliance is structured in such a way that the job can be done in the
most efficient and effective manner, removing unproductive work. It also
involves working with the alliance manager, line managers and teams to ensure
business goals and priorities are understood and that performance management
processes match business needs and are easy to implement.
Teams should work within a context of continuous improvement and
experimentation. HR can coach teams to develop a clear purpose and identity, as
well as the ability to capture synergies and manage conflict.
The second area involves looking at the highly political factors that affect
the speed with which things get done, such as levels of accountability and
decision-making authority, possible duplication and lack of resources,
approaches to meetings and goal-setting.
HR needs to work with the alliance manager and other stakeholders to ensure
all the processes adopted are geared to speed and high performance.
3 Focus on talent
Help people learn new skills and approaches
People working in alliances generally have high levels of expertise in their
own specialism. However, alliance-working requires people to work with those
from other organisations who have different approaches to doing business. Some
people may lack some of the partnering skills (see box) which are so necessary
in an alliance.
Of course, it helps if the people selected to work in the alliance are predisposed
to partnering in the first place. HR can play a vital role by enabling
competence acquisition, ideally using learning methodologies which are as
innovative as the product of the alliance itself.
HR can also ensure people working in joint ventures are kept in touch with
their parent body. Alliance workers often worry that they are being forgotten
about "back at the ranch" and return to the parent body before their
job is done, in order to look after their career.
HR can act as a career broker for individuals, thus reducing the fear of
being forgotten, and can also work with the alliance manager to make sure
people have opportunities for some form of progression while they are working
in the alliance. This may not mean a promotion, but the chance to broaden a
skill set, gain new experience or manage a team can be useful for people
looking to enhance their CV.
4 Focus on innovation and learning across boundaries
Mainstreaming learning – within the alliance and beyond
Of course, successful alliances, with their "can-do" culture and
exciting developments, can be stimulating to experience as an employee. They
provide excellent opportunities for learning – itself a change process – and
equip employees with approaches that will stand them in good stead wherever
their career takes them.
However, given the temporary nature of many alliances, this learning is
often lost when the individual moves on. HR can help people create effective
review and evaluation processes so that they and others share learning about
what works, as well as what does not.
Alliances are also the ideal test-bed for knowledge management processes
which can be imported back to the parent body. Many of the alliance workers we
talked to described how the skills they had developed in the alliance put them
in good stead for more senior responsibilities in the parent body.
A few admitted that, although they had personally benefited from the
alliance experience, they had made no effort to share their learning from the
experience more broadly within the parent body. This relatively common practice
is a real loss for the parent company.
Indeed, the real challenge is not so much working within the alliance but in
mainstreaming partnering skills and learning from alliances back in the parent body.
Alliances provide a valid business focus for developing "learning
organisation" approaches. Assuming the alliance works successfully, it is
probable that new and improved systems will have been developed from which
parent organisations can benefit.
HR can provide multiple vehicles for generating and generalising learning
about emerging good practice and help create genuine synergies. Personnel can
proactively help integrate alliance workers back into the parent body and
disseminate good practice by documenting experience and recording stories.
Model effective alliance behaviours
It would be somewhat bizarre if personnel and development professionals
failed to walk the talk on partnering! Working as business partners means
having a good understanding of the alliance, what it is designed to achieve and
providing bespoke solutions to development needs in that context.
Acting as consultant to alliance managers involves being credible, building
value-added relationships, using a range of diagnostic tools to identify what
needs to be done and implementing cost-effective and timely solutions.
Acting as partner also means sharing learning and good practice with fellow
personnel and development professionals from the partner organisation so the
benefits of interesting new approaches can become more widespread. Some give
and take is an inevitable part of a successful collaboration.
Conclusion
As more organisations aspire to enter strategic alliances, and struggle to
make them succeed, the chances are that the importance of the strength of the
alliance relationship will increasingly be recognised.
For personnel and development professionals, alliances offer a major
opportunity to contribute to business success by helping people build
relationships and trust, providing people with the skills they need, shaping a
culture in which learning is shared and which provides a template for effective
collaboration.
They also offer the chance to break out of preconceived ways of operating to
create real business partnership.
The link between HR, training and development interventions and potential
value to the bottom line should be obvious. But the benefits of alliance
working are not restricted to organisations. Helping to make an alliance
succeed can only add lustre to the careers of the fortunate HR and development
professionals who are able to make a real difference.
How can HR add value?
Cultural assessment
– What are the cultural "hotspots" that may interfere
with effectiveness?
– What will people need to know or do to help the alliance get
off to a good start?
Help establish behavioural ground
rules – typical alliance agreements include:
– Help keep differences out in the open where they can be dealt
with
– Aim for win-win
Aim for adaptability
– Challenge sacred cows before they become too firmly
established
Conflict resolution
– Provide vehicles for people to have constructive and honest
debate which can resolve conflict
Develop leaders
– Coach leaders on being accessible and visible and on aspects
of the leader’s style that may be helping or hindering others
– Provide feedback mechanisms that enable leaders to fine-tune
their style
– In some cases, it may be useful to arrange access for senior
managers to appropriate external executive coaches
Relationship building
– Establish networks, with or without a specific topic focus
Help alliance managers to manage
performance
– Develop business-focused performance management processes
– Provide training for line managers in project management,
performance management and relationship/contract management skills, as required
A partnering mindset
The basic toolkit for succeeding in a strategic alliance. Alliance workers
need to be able to:
– Build relationships
– Tolerate ambiguity
– Build trust
– Manage their own career development, including maintaining
links within the parent organisation
– Be positive, enthusiastic and energetic
– Take "sensible" risks
– Think creatively
– Take a long-term view
– Have a broad business understanding
Contact
About the author
Linda Holbeche is director of research at Roffey Park
Institute, where she is also programme director for the Strategic Leadership
and Strategic Human Resource Programmes and co-director of the Senior Executive
Development Forum. She will be speaking at Harrogate in Session E2 on how to
make Strategic Alliances work.
Her publications include research reports and two books:
Motivating People in Lean Organizations and Aligning HR and Business
Strategies, published by Butterworth-Heinemann. Her latest book, Effective
Mergers and Acquisitions (co-authored with John Coffey and Valerie Garrow),
will be published in November by Butterworth-Heinemann.
Further reading
The Management Agenda, Glynn, C & Holbeche, L (2000),
Roffey Park Institute
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Strategic Alliances – Getting the People Bit Right, Garrow V,
Devine M, Hirsh W and Holbeche L (2000), Roffey Park Institute
Creating Strategic Alliances Which Endure, Long Range Planning,
Vol 29, No 3, pp346-357, Spekeman R, Isabella L, MacAvoy T, Forbes, T (1996)
