Strategic Alliances Fieldbook newsletter #16 – blueprint maturity

Inspired by London Tech Week newsletter 15 jumped into the topical area of generative AI and used an example of how to apply parts of the agile alliances blueprint to solutions in that domain.?I’m returning to posting excerpts of the book for this newsletter 16 and have chosen a piece on alliances maturity that follows directly from the business components from newsletter 14.?The topic of maturity is applicable from new start zero revenue to long tenured multi-hundred million revenue alliances because it has to be applied in context of the team working on the specific offering area in question.?For example, even if two companies have a huge and successful alliance, if they are building a new offering for a novel technology domain like AI, or a new focus industry area like commercial banking its likely there are also people with expertise in those domains drafted in to help, and if they’ve not worked with the alliance before and/or are not fully allocated those new people will have to come up to speed on how the alliance operates.?In that example the overall alliance is highly mature, but the new offering is being incubated and needs a particular approach to scale.?This piece is taken from page 190 of the book.

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As the partnership evolves, it’s clear that the emphasis on each of the eight business components will change over time (see newsletter 14 for the business components). The early stage alliance, for example, will have a very high degree of priority on offer management and will likely have relatively low emphasis on demand generation. This is because the flywheel of the life cycle does not start spinning until there is a proposition or solution of some kind to stimulate the market with. Initially, the offer is taken quickly to a small number of ‘friendly’ clients, so the typical marketing and demand generation activities are not necessary because we already know who we expect the anchor clients to be. As the maturity of the alliance advances, so the emphasis on the business components changes. We’ve proposed a very simple maturity model here to illustrate three stages and how that links to the business components.?

The first stage is incubate, as the idea of the alliance, and a new offering for an existing alliance is just a seedling that needs to be nurtured to see if it will grow. As we’ve seen from some of the case studies in Chapters 2 and 3, even if a partnership looks like a slam dunk on paper, it does not mean that it’s going to work; so even for the very obvious combinations, we suggest running through the same cycle to test value at each stage. Incubate keeps failure risk low through limited commitment to invest time and money and people; expect that most of the team will be part time. There must be a small handful of people who are dedicated as no alliance will scale if the entire team is all ‘side of the desk’, but a virtual team supporting a small core of dedicated staff is viable at this stage.

There will be a low number of propositions; unless they are very simple, then not more than three to maintain focus. The sector coverage and geographic coverage will also be relatively narrow because a small team won’t have the bandwidth to cover more ground effectively. There will be a small cohort of target accounts, likely to be friendly existing customers whose opinions can be accessed fast. We’d expect this stage might take 3–18 months if it’s started from scratch, depending on the number of people committed full time and the complexity of the proposition. When there are two or more anchor clients and the value potential of the alliance is clear, it progresses to big bet.

Big bet means that the idea has hit its success criteria and ‘gradated’. Think of it like series A or B funding for a start-up. The business now has a small base of customers paying for a proven product or service and it has been running on the thinnest level of investment possible; it is now ready to bulk up on offering, business development and delivery resources. At this point, the partners have a clear shared ambition and commit a material amount of investment in the form of money, people, client relationships, assets and so forth. The numbers of dedicated people increase dramatically; we’ve seen it go from two or three to as high as 100 in two-three years. Typically, at this stage the alliance will add more offerings and extend across other sectors and/or geographies. It is at this big bet stage that the Blueprint in the following chapters comes into play. Big bet justifies the move from ad hoc tactical planning and investment in the earlier stage to structured forward-looking design and build work. The Blueprint section below suggests a list of critical assets that if created will form the foundation of tools and content for the alliance. Actually, what we have found is that more importantly than having created a PowerPoint slide or a demo, the act of co-creating these assets will strengthen the bond between the two parties. They will have gone through a few cycles of insight sharing and strategic analysis together. There will be a broad group of people with a good understanding of the drivers of mutual success. As a result, the alliance will make better decisions and be more enduring.

Finally, we have the scale stage which describes the alliance that has a strong portfolio of offerings, a material customer base distributed across sectors and geographies. There is now no doubt about the strategy, the market relevance of the products or the ability to deliver to a high quality. This is series C funding or an initial public offering (IPO) that unlocks material capital to accelerate the existing growth. Numbers of dedicated staff continue to increase, particularly in business development and delivery, marketing ramps up to attract new clients and new geographies are bought online. Linking back to the Blueprint, the assets that were created at the start of the big bet stage are just as important and will likely be continually iterated.

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