Strategic Alliance Magazine Winter 2017 - 46

EDITORIAL SUPPLEMENT

START RIGHT
When two companies decide to create an alliance, it's rather like two families coming together via a marriage, with
a governance meeting analogous to a big family reunion.
While the language in this article often references what
might be considered traditional family frameworks, readers may have a different family support structure. As we
know, families come in all shapes and sizes! The titles in
your family may or may not match those used in this article, but you will likely have individuals in your family who
fill similar roles.
In a marriage, for example, you are said to inherit your
in-laws. These in-laws may have different norms and traditions, including how they celebrate important events and
holidays. Early on this may seem fine, and even refreshing.
After some time, though, you might find yourself drawn to
your former ways, and your expressed desire to celebrate
with your own familiar traditions may create significant
tension. To reduce some of this stress, it's often best to focus on the basics-what brought you together in the first
place. The ability to tactfully ease these tensions has the
added benefit of providing more energy to address more
significant issues that might arise.
While you might face similar tensions in an alliance,
sometimes you are lucky enough to get it right from the
beginning. Your company's business development team
pulls you in early to help design governance based on the
needs of your company, the partner company, and the deal
structure. You're also fortunate to get just the right executives on the committee from both companies. The partner
contributes to the process, and both companies are pleased
with the outcome. Everyone is energized and committed.
But what if you inherit a governance structure that is not
working? What if your company or the partner firm reorganizes and committee staffing no longer lines up with
internal accountability? What if the committees experience leadership changes? Or what if the alliance shifts its

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STRATEGIC ALLIANCE MAGAZINE | Q1 * 2017

focus to a new phase of product development? Any of
these scenarios-along with countless others-can lead to
dysfunction and create business risk, human risk, or legal
uncertainty in the alliance. The resulting frustration also
can make solving core issues such as budget misalignment
or profitability infinitely more complex.

THE BASICS
Whether you're designing a governance structure from the
ground up or supporting an existing governance committee, it's always helpful to keep the basics in mind.
For starters, do you have the correct governance committees in place? Perhaps the alliance has been functioning for
10 years, with no new products currently in development.
In this case, it may be appropriate to reduce the meeting
frequency of the development committee or eliminate it
completely. Or perhaps two committees could be combined for greater efficiency.
The alliance manager can further assess the state of governance by asking some basic questions (see "Governance by
Design: How Well-Established Principles and Practices Set
the Stage for Alliance Success," Strategic Alliance Magazine,
Q3 2012):
n Are the committees appropriately staffed?
n Is higher-level leadership needed to facilitate key
decisions? Or could this be delegated to a lower level?
n Do committee members have the appropriate skill
sets to contribute to the alliance, or is training, specifically on collaborative skills, warranted?
n If reorganizations have occurred, are there more
appropriate people who could serve as members?
Whenever possible, it's desirable for a company's governance committee decision making and accountability to

Table of Contents for the Digital Edition of Strategic Alliance Magazine Winter 2017