In the alliance between Yahoo and EBay, EBay owns PayPal and Skype and now is extending its reach to the huge Yahoo user community. Yahoo benefits from Ebay as an advertising client and together they deliver a strategic strike against Google in the Internet advertising space.



Yet, when you ask business professionals "What are strategic alliances?" They say:

• Two companies working together, it is kind of fuzzy.
  
  
• Those employees over there, we don't know what they really do and what value they provide

When conducting research studies with Ann E. Trampas, Adjunct Professor of Marketing at the Keller Graduate School of Business and Chairman of the President's Council-The Association of Strategic Alliances Professionals, I discovered that many companies treat alliances as a narrow sales, marketing or R&D function.

The value of strategic alliances is continually described through the services it delivers for that particular function. Too often, alliances are pushed in the direction of "What sale has this partner delivered for us lately."

This will not deliver significant innovation for your business and will not create the value and growth you would expect.

Hare Are My Top 4 Factors That Signal You Are Not Getting the Most Out of Your Strategic Alliance's Organization:

1. Organization: Where do alliances reside in your corporate structure? If alliances reside entirely within a functional area such as sales, it is siloed. It only supports objectives for that part of the organization.

2. Mindset: How do executives and alliance managers view alliances? If executives view alliances as strategic rather than tactical, they will invest in it. If they do not, alliance budgets will be cut the moment belt–tightening occurs. If alliance executives only have experience in a single functional area, they typically will shape the organization from that perspective. Remember, people operate in their comfort zone.

3. History of Success: What worked before? If alliances have been successful in building an efficient supply chain, they are thought of as part of procurement. If alliances have been part of an effective distribution channel, they are thought of as part of the organization's sales success. Again, siloed thinking.

4. Compensation Plan: How are alliance successes rewarded? If bonuses are tied to quarterly revenues, results will be short-term tactical opportunistic approaches. Alliance managers will find partners who have the near-term deal even if partnering with another company will bring greater opportunity later. If executive bonuses are not tied to alliance performance, there will not be any executive involvement or support.

To keep pace with today's realities, alliance management needs to become a horizontal, broad-based approach as much as it is a vertical "function." It needs to be corporate-wide competency embedded in all employees that collaborate with outside firms. Employees must learn partnering concepts and apply it to their day-to-day business. And executives need to eliminate any siloed thinking.

Objective, leading-edge alliance organizations can help you focus on ensuring that alliances and channels are structured correctly from the outset, with the optimal mix of influence and reseller relationships relative to business objectives. Here are 5 more ways alliance organizations can help you…

5 Ways Leading-Edge Alliance Organizations Deliver Significant Innovation, Value Creation and Growth

• They act as an enablement group, similar to M&A to support the rest of the corporation in learning partnering best practices, and as the "go to" experts for structuring relationships.
  
  
• They work hand-in-hand with M&A and strategy groups by serving as a vanguard on the latest techniques and strategic opportunities.
  
  
• They measure and reward work across functions instead of in a silo
  
  
• They manage investments across the partner portfolio
  
  
• They manage and negotiate major relationships.

Follow my advice and you will be able to create an effective strategic alliance that enables your organization to gain visibility, create and deliver new products and services, and reach new market penetration.