Strategic alliances—Digitally savvy partners now more than ever
The Covid-19 pandemic is showing that not only do organisations need to embrace strategic partners but also need to ensure that these partners are digitally savvy.
by Maish Nichani Updated 20 Apr 2020
One of our clients in the fruit industry told us that the Covid-19 crisis is reducing their top line drastically. I was surprised and asked, "Shouldn't it be increasing? I see people buying more fruits during this time." The problem, it turns out is in their distributor partnerships. They've been relying on old-fashioned distributors that have seen their operations crippled due to the crisis.
I've heard many such stories in the last few weeks and they all seem to suggest that the companies with digitally savvy partners are coping with the crisis rather nicely.
As the need for taxi and ride-hailing services dropped during the stay-at-home period, it was relatively easy for Grab, the digitally savvy ride-hailing startup, to reorient its drivers here in Singapore to deliver food and other essential items. The organisations that partnered with Grab for delivery gained from its nimbleness.
When the demand for food, personal care and household cleaning supplies increased along with the need for contactless delivery, it was easy for Ninja Van, the digitally savvy logistics company, to make adjustments to operations and scale the opportunity. The organisations that partnered with Ninja Van gained from its agility.
As another example, it was the digitally savvy Microsoft that led the charge to protect its partners when the pandemic hit by rolling out tools and features such on-demand support, co-selling programs and a Partner Centre to connect the partners together.
It is becoming clear that we cannot run a business alone. We need such strategic alliances with the right partners that we can depend on when times are good and bad. The operative word here is "strategic".
Partnering is not always about revenue and profit potential, but also about developing core competencies and pursuing new innovations. When a crisis hits, that's when the true meaning of "we are in it together", reveals itself. When things get tough, it is the strength of the partnerships that keep us going.
One of the strengths of a partner is their ability to change, scale and connect in times of uncertainty. Only a digitally connected partner can rise to the occasion.
A digitally savvy supplier, for example, can use data analytics across their customers to predict a supply shortfall leading up to a crisis and make the necessary arrangements with your company to perhaps stockpile essential supplies. An old-fashioned supplier, on the other hand, will become a bottleneck to your company during such times.
Mary Meeker, the former bank analyst renowned for her annual Internet Trends Report, recently reported on the impact of Covid-19 on businesses: “Many of our customary activities have suddenly slowed – or come to complete halts. But the impact of Covid-19 has also brought accelerating growth and focus in other areas. Most of these represent an acceleration of trends that have been underway for years. Most have digital tie-ins.”
It's a good time to start forming or reevaluating strategic alliances. The only requirement is that the activity should be treated like any other key business function like marketing or finance. It demands commitment, people and a repeatable process to make it successful.
We have found Stanford professor Lynda Kate-Smith's video, Best Practices for Managing and Measuring Partner Relationships, to be a solid introductory resource.
Here's her strategic plan that we are using internally to evaluate our partners.
The Covid-19 pandemic is teaching us many lessons. One of them is to focus on our strategic alliances. Like my client in the fruit industry, it is the right time to relook at our business and operating models and use this opportunity to step into a post-pandemic world on the back of strong, digitally savvy partners.
There are a ton of resources on strategic partnerships on the web, here are some we have found to be helpful:
- Why your next deal may be a partnership by Bob Saada and Benjamin Gomes-Casseres. A nice introduction to strategic alliances.
- Strategic Alliances: Three Ways to Make Them Work by Steve Steinhilber. A quick read into Cisco's alliance playbook.
- Alliances: An Executive Guide to Designing Successful Strategic Partnerships by Ard-Pieter de Man. An in-depth guide into large-scale corporate alliances.
- Collaborative Advantage: The Art of Alliances by Rosabeth Moss Kanter. And 1994 HRB classic article, still worth a read.
Top management schools are also offering online courses for executives strategic alliances:
I enjoy helping organisations achieve their potential in an ever-changing and complex world. I lead product and transformation conversations.
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