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How The Company You Keep Can Accelerate Transformation

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“The achievements of an organization are the results of the combined effort of each individual,” Vince Lombardi, legendary coach of the Green Bay Packers, famously said. “People who work together will win, whether it be against complex football defenses, or the problems of modern society.”

Few leaders would argue with Lombardi on that. Teamwork is paramount to an organization’s success, and many cite collaboration as a core value. For some reason, however, this team-oriented mindset tends to stop at the organizational level. Today, far too few businesses look outside their own four walls for growth, either out of pride or a lack of trust.

However, this thinking must change in the Transformative Age. No organization — regardless of its size, legacy or tenure — is fully equipped to navigate the transformation of today’s business landscape on its own. With change occurring at a pace more rapid than ever before, it would be foolish to think any business can simply “catch up” and then resume business as usual.  

Instead, organizations must prepare themselves for perpetual change by evolving their business models to be more agile. An often-overlooked strategy to achieve this agility is one that has served EY and many of our clients so well through our own transformation journeys: striking alliances with strategic partners that propel new and untapped parts of the business forward.

Although forming alliances is not a new concept, it has taken on new importance in this era of transformation because it can address many of our most pressing challenges, including:

  • Closing gaps in the supply chain
  • Filling talent gaps
  • Accelerating innovation
  • Expanding visibility to new customer audiences
  • Developing new products or services

Simply put, alliances — and an ecosystem approach more broadly — provide an organization with agility. That’s key in the Transformative Age, when speed and agility are essential ingredients to success.

Finding, building and managing alliances

The benefits to building an alliance strategy are plentiful, but companies often get stuck deciding with whom and when they should align. Paralysis by analysis, risk aversion and a lack of consensus on which parts of the business need an alliance most are among the many reasons why alliance strategies fail — if they materialize at all.

To overcome these obstacles, companies should follow a three-step process to find, build and manage alliances.

  • Draw a road map: For starters, business leaders must assess core competencies as well as major areas of weakness that are impeding transformation and innovation. Identifying where the business excels and where a partner might add value becomes the road map for an alliance strategy.
  • Align your values and expectations: Once these areas are identified, businesses can look for alliance partners. In doing so, companies should seek out partner firms with consistent core values; however, they don’t necessarily need to be an exact match. In fact, some degree of diversity in thought and approach is critical to forming an alliance that adds significant value for the customer and employee. Two partners should complete — or at least complement — one another.

As an alliance is formed, partners need to align on a joint go-to-market strategy and set realistic goals against key performance indicators. Nothing kills an alliance quicker than misaligned expectations. Set goals that center on the customer. Extensive focus must be placed on making the first client a huge success, but do not overinvest before that first success. What is the desired impact of the alliance on the end user or buyer? How will it change their perception, experience and results? Setting goals around these parameters — and achieving them — will lead to commercial success.

  • Build trust: This goes without saying, but trust is a key ingredient to a successful alliance partnership. What might be less obvious is how to build and maintain trust between partners over time. Trust is built best by putting the customer’s needs and experiences first. Seeing the customer as the North Star keeps both companies in check and makes sure that decisions are always being made in their best interest. It forces both companies to take a strategic, long-term view and resist the temptation to make quick, short-sighted decisions.

Risk avoidance

Placing this level of trust in another organization is not a decision that should be taken lightly. Business leaders need to be aware of the risks that come with opening their customer and employee relationships to another company, and perform rigorous due diligence in advance of a partnership. Any remaining risk should also be carefully considered, and contingency plans should be established for any potentially damaging scenario.

Companies have an obligation to protect their customers, which means they need to be as responsible for their alliance partners as they are for their own employees. Oversight and control must be placed on where any customer data travels, and business leaders must stay in tune with the global environment to manage any shifts that could affect the partnership.

Don’t try to go it alone

Companies that remain too proud to align themselves with another will slow the pace of innovation in an environment that is all about speed , and customers won’t stick around and wait.

Ultimately, diluting a business’s intellectual capital by focusing on too many aspects of the value chain is a major risk in today’s dynamic world. If companies want to design, develop, implement and launch major transformations at scale and have the speed necessary to compete, they must build a team that is bigger than the organization.

 The views reflected in this article are those of the author and do not necessarily reflect the views of the global EY organization or its member firms.

 

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