Making Strategic Alliances Work: The Tactical Way - Part 2: Scaling Strategic Alliances & Ecosystems

If you are a Strategic Alliance professional, Director, VP, SVP, CEO etc, scaling Strategic Alliances, benefiting from that is purely magical! This article dives into some basic elements that one needs to have in order to scale a Strategic Alliance or Ecosystem. This is Part 2 of the Series "Making Strategic Alliances Work: The Tactical Way". If you have missed Part 1, you are strongly recommended to read it, so here it is (Read Here - How to make Strategic Alliances work - the Tactical Way).

Let's get started. Caveat :This article will take 8-10 minutes to read and is for advanced strategic alliance professionals only.

Please note - this article focuses on multi-technology Product companies and GSI's alliances. The topic of scale is so vast, broad and deep - a Linkedin article like this will only touch the tip of the iceberg. In addition, this article is intended to augment the value and the mindshare of strategic alliances, instead of creating reader fatigue. Comments are thus appreciated.

A. Define - What is "Scale" of a Strategic Alliance?

Let's start with a basic question - what is "scale"? What is the "scale" of an Alliance or an Ecosystem? Can you visualize what that "scale" is? Here is the simplest way of scaling - lessons we learned from our childhood days - it's called stretching the chewing gum :)

The greatest problem with scaling Strategic Alliances is visualizing what that "scale" really stands for and setting the expectation on what it looks like. In our mind we have an idea what the scale really means. In reality - we equate more $revenue as scale. Whatever may it be, mentally equating scale with revenue is perhaps incorrect. That is because it is the outcome or the left side of the equation.

Lets take the equation E= mc2, the famous equation we all know. In alliances, if we focus just on the left side "E"( or $ revenue say) we won't know what comprises that "E". We have to focus on the details of the "mc2", the right side of the equation.

Thats why - some Strategic Alliances that look absolutely potent, end up failing. Stretching out the chewing gum also thins out the chewing gum after all.

Don't blame yourself. The right side of the Strategic Alliances equation is complex, fluid, never elegant and one needs to dive deep into several factors. Thats what makes Strategic Alliances such a difficult and challenging profession. The problem and solution is what we call - the devils always in the details. If you are in charge of a Strategic Alliance at whatever level it maybe - you have to be hands-on and detailed. The goal of this article is to address the right side of the equation and enable you to help craft your scale strategy. In short think of the components that led to E= mc2. Follow me? Ok now go crazy understanding the derivation of E=mc2 from the snap below :) Well, "It's elementary Watson"!

B. 3 Key Elements of "Scale" in any Strategic Alliance

There are hundreds of frameworks written on this topic, but remember they are frameworks. Good to have, but won't put money in your pocket if you are driving deals and making the alliance work. The real reason being - the frameworks show the "What?" instead of the "How?". The real limitation - Your scale strategy will require an in-depth understanding of your market, overall sales process, how deals happen on the ground, buyers, users, producers, product, alliance, GSI's etc etc. So, lets focus on some key elements.

Key Element #1: Are You a Market Creator, Enabler or do you "Ride on Markets"?

This is a simple and basic question, and Strategic Alliance professionals must focus on it. I ignored it and learned from my failure. Honestly, this basic question decides the alliance engagement model, the value in the alliance and the repeatability of the alliance. Let's dive in with an example. Take a look at the snap below showing the simple alliance between a specialized Edge IoT software, Operating System company and a specialized Edge Infra Company.

In an emerging market like Industrial IoT ( example PTC Thingworx IoT platform), the IoT product company that builds and proves the business cases will always be the market creator ( or the Jockey). The specialized Edge Infra company will always be an enabler (the horse) and will be dependent on the value and success of the market creator. The Operating System company, although equally important will simply ride (the saddle) the total need by "wedging in" with the specialized Edge Infra company. The analogy always works, but it depends on deal situations. So, read on. Power plays in Strategic Alliances are real!

Situation: Now, imagine a specialized GSI entering the deal situation now to show the value of IoT. Guess what...they will totally focus on the Edge IoT software first because that is where the GSI services business is generated. Why? Because thats where the customer wants to see tangible value.

Situation 1: The above dynamics will change, the moment one has to expand the IoT application built through POC/POV by the IoT company, to say 10 locations with minor code changes to prove the value of the IoT project. The GSI that expands the deployment of the already made Edge IoT apps now becomes the enabler of the situation with standard and non-complex service offerings(the Horse); the Operating System company brings the critical value of open source DevOps with it (becomes the Jockey) and suddenly the Specialized Edge Infra company becomes the Saddle (commodity, thus rides on market demand). Notice how the roles change. Wait, theres more.

Situation 2: Now, imagine the scenario where the GSI is provided with a turnkey contract to scale 20% customized Edge IoT Apps to say each of the hundred locations. Because of the turnkey nature of the project, the GSI takes the entire risk (outcome) of the project. Now, they become the Jockey, the Edge IoT company becomes the Enabler and the Operating system and the Specialized Edge Infra company simply wedges in with the GSI and rides the demand by becoming the saddle. Notice how the roles shifted again based on the situation. And ...this "Power Play" shifting is the Key to Scaling a Strategic Alliance!

Question is Why?

Take a look at your deal situations based on the buckets where you are a Jockey, Saddle or Horse. Find the revenue associated with each type/situation and check where the major $'s are coming from. Now you know which situation is common and which one needs to repeat and thus scale in the Strategic Alliance! At least you will be way more aware and be focused on the pattern to craft the Scale strategy by tackling each and every major angle. It's like being aware of the "mc2" in E=mc2. Cool? Try it. It works. Always works.

Key Element #2: What and Where is the Repeatability

Customers don't want hammers and nails. They want a hole in the wall that enables them to carry out business objectives (like the one in the snap below). They just want the plumbing to be done quickly. Imagine a world with no coat hangers - thats the pain that drives the plumbing.

Every business wants this basic plumbing taken care off at any cost. All SAP/Oracle ERP transformation that the media is so ecstatic about - is plumbing. All the Azure/AWS/Google Cloud advertisements you see - are all about making digital plumbing look sexy! All large GSI projects that provide large repeatable $services - are all about managing and maintaining this plumbing. (no puns and no offense meant here :) )

What is common across all these plumbing business? It's the set of standard Tools, Tasks & Processes that can build and efficiently manage the plumbing. In the age of Digital Transformation, we call it "Assets".

If you are a Product/SaaS (Tools) company, or if you are a Robotic Process Automation ( Tasks) company and GSI's (People & Process) company - you need to combine all these into assets that are flexible (Customizable Solution) that can be implemented rapidly, increase time-to-value and reduce risk. Here is an example of an asset.

If you are a Strategic Alliance expert interested in scaling your Alliance - how many Assets have you built so far? Remember Assets = Repeatability.

Yes, some Assets will always be non revenue performing. The fault is not in the asset, but either identifying the need incorrectly or selling the asset incorrectly.

Key Element #3: Building a Team Structure: Roles & Responsibilities

The Strategic Alliances profession has matured over time. It can clearly be divided into three fundamental parts/roles/actions. These fundamental parts are dynamic and fluid in nature. Trying to create hard boundaries will result in ineffective working and inter-team conflicts, and is thus bound to seriously affect scale of the alliance. The common intersection of the roles (outlined below) is the fact, everyone in their role needs to be opportunity and $revenue focused. Revenue is King/Queen.

The fundamental way to collaborate with each other and anyone in the alliance is the model below. Trust, an outcome, usually follows after repeatable clarity in business situations. When you hire these professionals, clarify their roles/scope first as much as you can.

• Role A: Alliance Build or Alliance Architect : One has to build joint assets, joint proposition, technology architecture, processes, product integration etc for the Alliance. If you are a Technologist or an Architect working towards building assets & solutions, within or outside the Strategic Alliance team, you are automatically part of the Alliance. Whatever you build is fundamental to the deal either as a framework or deal architecture. Note the word "Deal". Your work enables deal making, but won't usually create deals and opportunities. For example if you are a Life Sciences Solution Architect responsible for developing a framework or joint architecture for a Life Sciences Product and Global System Integrator Alliance - you are still a part of the alliance although you are NOT part of the Strategic Alliance org, so you need to act in favor of the alliance and keep personal opinions in check.

• Role B: Strategic Alliance Sales : This is the most important, yet the toughest and also the fundamental piece of the Alliance. However great an alliance appears to be at the tactical or at the strategic level, if one cannot convert pipeline to $revenue...the rest doesn't matter. Period!

Strategic Alliance Sales professionals have no real authority while working on deals, yet have a lot of responsibility. Trust me - Authority in general is an illusion ( you will perhaps concur if you have kids, specially if you have a pre-teenage daughter). The only way to co-sell (and also gain authority and trust) is to show the "Value" to both sides, and repeatedly clarify how each side gains from each alliance on any and every engagement call with sales reps. Real results start happening when you either bring New Opportunities to any direct seller or by Accelerating their deals.

Real question is - who is dedicatedly working the continuous deal engagement cycle? Yes, some alliances who rely on the "Saddle" approach can scale by riding on either the Jockey or the Horse or best both, but remember good things don't last... your competition will always catchup when you are coasting. Thats exactly the reason why Intel, AMD, Suse, Red Hat, AWS, Azure etc have multiple sales alliance professionals working the Alliance with Product and GSI companies both, knowing fully well how to make themselves valuable to all Jockeys and Horses.

Air Pilots don't shut of their engine to save fuel mid-air or even when they have a tailwind, do they? Why would you?

Strategic Alliances Sales is a tough profession. This isn't a gig for every strategic alliance professional. It requires a blend of skills like strategy, sales, execution, technology, process, solution knowledge and the knowledge of the org structures etc...and above all they need to be entrepreneurial and gutsy. It requires a total "consulting" and "value" style of selling approach with high level of conflict management skills. You are either it - or you are not. This role requires guts simply because you will face conflicts (internally and externally) battling out engagements and deals on a daily basis. The role also has another downside. Although you are paid by your own employer, most colleagues may view you as working for the alliance partner. Your alliance partner will love you because you are a proactive revenue stream after all, but you aren't their employee! You will be on two boats all the time. Every coin has two sides, the sales driven alliance profession is no exception. Get used to it. Risks and the Rewards are the inseparable Yin and the Yang!

• Role C : Alliance Operations and Alliance Enablement : Let's talk about enablement for a bit, because scaling Strategic Alliances needs continuous enablement. You see....enablement is about mindshare, brand building and to also prevent your competition from taking over. Let me first prove my point.

The media is obsessed with writing about Steve Jobs, Bill Gates, Jeff Bezos, Elon Musk etc etc. Most of their businesses are B2C, or direct for the consumer. These exceptional and sometimes "Godly" articles simply enable your mind to create mindshare within you. The stock prices reflect the mindshare. Still don't believe enablement is real impact? OK answer this question for me - who is the CEO of Samsung? Who created the Android operating system? If you didn't get the answers - you have been enabled to think differently. Notice the Amazon, Facebook, Microsoft, Apple's enablement engine runs continuously. Never stops. And that why you use their products. It's the use of Psychology 101.

Your enablement strategy should always be tweaked and positioned well. The reason is - large GSI's have multiple alliances and sometimes conflicting alliance teams/platforms, with each alliance trying to compete for mindshare with direct field sales people. Sales people have targets to hit. They don't get paid to sit down and take training after training. For example a Client Partner of Accenture is not interested in attending trainings on new alliance value props. The solution is to explain the value of the alliance, but one-on-one. So enablement here becomes part of business development really. Where as training pre-sales or delivery or product dev people is a knowledge/skill game. Knowing the difference and knowing where to invest in enablement is big $revenue impact operationally. At least the enablement needs to run continuously to prevent your competition from taking over. GSI's sell what their people are trained for. The "agnostic" mantra is simply client mindshare. They always have to be the customers "Jockeys", isn't it?

Operational Alliances and Enablement roles are very similar and should be treated under one umbrella. Operational Alliances have to create mindshare at the top in order to scale. The "trust build" at the top of the hierarchy is a must and needs to be built in person repeatedly - specifically with Heads of : Sales, Alliances, Presales, Delivery etc etc. There is a caveat though. Not being able to bubble up revenue influence and not being able to show business impact can work against you. Remember - relationships are all "Business Relationships". At the back of our mind we all want to know "What's In It For Me".

C. Conclude:

Long article, isn't it? Scaling Strategic Alliances is NOT an easy job, sorry! Strategic Alliances and Ecosystems Management will be the de-facto business development profession of today and tomorrow. The subject of "scale" does require attention when the rules are unwritten. More than that, your own scale strategy will be different from others and will need a way detailed re-look.

I will conclude with this quotation below and also prove a point.

Culture is real, we all know it. One can feel it. Yet, one can build it as well in groups and in tribes. Strategic Alliance teams need to form a culture of working together internally first by sharing information and opportunities. With Ecosystems Management being the wave of the future ( Read Here for a detailed article on it) the hard silo's or boundaries of Strategic Alliances will slowly melt away and only those who can work with multiple products, multiple alliances and can build multiple value offerings will survive. Success of a profession is dependent on the survival of it first, isn't it? In times of change, success is "Darwinian"!

Do not forget to comment, share, advise, connect, email, call etc... keep the discussions flowing. Thank you for reading.

Next Article: Part 3: Deal Engagement and Deal Development Process - to be written in September 2019.