(Note: Guy Clinch has included audio samples from HP Discover, TheStreet and FinancialMirror in his podcast under the Fair Use Doctrine.)
Consultant Guy Clinch has provided many unique takes on the enterprise communications industry in his time writing for No Jitter, including the idea that because cloud technology can break down technological inhibitors, it is forcing many companies to rethink their level of cooperation with other businesses. Guy revisits this topic in his latest podcast, specifically looking at what it takes for large organizations to create successful joint ventures and projects.
As Guy discusses in his podcast, the many notable strategic alliance announcements made this past year include:
Outside of these big-name alliances, Guy tells us that almost any company of reasonable size boasts a list of corporate alliances. Often, an alliance will exist on paper, but when you take a closer look at the partnership, it's hard to find any evidence the venture is alive and progressing. This led Guy to ask the question, "How many of these arrangements will persist beyond the faded headline?"
He cites an article in Entrepreneur that says anywhere from 40 to 70% of joint ventures fail. While some joint ventures go out with a bang, racking up attention-getting headlines detailing significant losses and financial damages, there are some that are successful. For example, Microsoft and HP have been aligned for 30 years.
"Which of the many announcements will bring lasting value to their sponsors and ultimately those company's customers?" Guy asks. "What does it take to make a strategic alliance work for all parties concerned, especially the customer?"
Elephant Mating Rituals and Why Ventures Fail
Now, you might be wondering, what does this have to do with elephants?
Guy explains that when large organizations consider working together with another company, they engage in a sort of mating ritual that is akin to that of the elephants. Essentially, elephants engage in a game of cat and mouse for long periods of time before actually mating. In a similar sense, to ensure a successful partnership, businesses need to invest enough time when evaluating potential alliances.
"Too much happens up front and not enough time and investment is allotted for execution," Guy says. "Upfront, strategic planning takes place; executives cultivate relationships and big announcements occur."
One reason that joint ventures fail could be because organizational cultures and ethics don't truly align. This can be especially true for organizations that are channel-centric, Guy says, explaining that it becomes more of a math problem when two businesses try to align on goals.
"As Symantec and Huawei learned, when the go-to-market model involves third-party participants, each bringing their variables to the table, the equation becomes a complex factorial," Guy says. "The efforts required also increase with time."
In addition to the early formation phase, alliance relationships also require ongoing maintenance to ensure success. In a way similar to baby elephants needing nurturing from the herd after birth, Guy argues that "a joint venture requires more than absentee parenting by executives."
With elephant mortality rates as high as 38% in the first three years after birth, Guy draws a parallel to the failure rate of joint ventures.
"Of the recent birth announcements in our industry, how many do we believe will sustain?" Guy asks. "What are the signs that the sponsoring companies really understand the investments necessary for long-term success? What signs, beyond attention getting headlines, do customers need to place a bet on a joint venture's survival? Like the fate of the elephant, large questions loom for any announced alliance."
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