8 of 8 people found the following review helpful:
5.0 out of 5 stars
How to forge and sustain relationships that create value for everyone involved, November 20, 2008
This review is from: Strategic Alliances: Three Ways to Make Them Work (Memo to the Ceo) (Hardcover)
This is one of the titles in the "Memo to the CEO" series published by Harvard Business Press, each less than 200 pages in length and superbly produced. In fact, none is a "memo" or written solely for a CEO. In this volume, Steve Steinhilber (Vice President of Strategic Alliances at Cisco Systems) explains "five basic criteria to identify and characterize" relationships that will achieve significantly higher and more consistent shareholder returns, enabling a company to grow faster and more profitably by leveraging those relationships rather than going it alone. The criteria are identified on Pages 2-3. Steinhilber then identifies three reasons why alliances are a "must-do" investment for any company competing in the global marketplace. With regard to the three ways to make strategic alliances work, identified as "essential building blocks," they are (1) the right framework, (2) the right organization, and (3) the right relationships. A separate chapter is devoted to a remarkably thorough examination of each of the three.
It is worth noting, as Steinhilber does, that more than 2,000 strategic alliances are launched worldwide each year and this number increases about15% annually. More than half fail and only about 9% of the companies "build alliances well." Of these, Cisco Systems probably has been among the most successful and Steinhilber heads those initiatives so he is well-qualified to explain what to do, what not to do, etc. As I began to read this brief but content-rich book, I wondered why Cisco allowed Steinhilber to reveal so much about what the company does and how it does it; more specifically, to explain in detail the mindsets applied to prospective allies and then to business partners, respectively. Perhaps there is a parallel with the chairman's letter that Warren Buffett contributes each year to Berkshire Hathaway's annual report. By the way, there is a recently published second edition of those essays, selected, organized, and introduced by Lawrence Cunningham. In these essays, Buffett shares everything he has learned about Corporate Governance, Corporate Finance and Investing, Alternatives to Common Stock, Common Stock, Mergers and Acquisitions, Accounting and Valuation, and Accounting Policy and Tax Matters. Of course, knowing what Cisco does and does not do insofar as strategic alliances are concerned by no means ensures the same outstanding results that Steinhilber and his associates have achieved. However, such knowledge will certainly improve the chances fort success.
To me, some of the most valuable material in this book is provided in last chapter in which Steinhilber explains how Cisco manages complexity. He addresses specific issues concerning intellectual property such as those involving jointly developed technology, solutions, residuals, branding. With regard to refining business goals, he recommends that two questions be answered: "How do we achieve our desired global market?" Also, "Which pieces of the value chain are central to sustaining our long-term profitability in a market?" Then, once objectives and the specific market(s) have been analyzed, he suggests taking one of three different approaches: (1) Partner with market leaders, (2) Partner with market leaders/challengers, or (3) Partner with both. Steinhilber acknowledges that there may be times when it makes sense to "spread your bets with dealing with uncertainty." To evaluate the breadth of an alliance portfolio within a market space, he identifies five criteria: market share, market segmentation, competitive overlap, potential acquisition strategy, and ability to execute.
These are among the subjects addressed in the final chapter. Steinhilber concludes with these comments: "In a globally linked business world with shortening life cycles and flattening value chains, building alliances capabilities will give you the chance to tilt the competitive playing field in your favor and significantly enhance your company's or organization's chance for long-term success."
Credit Steve Steinhilber with presenting a wealth of rock-solid information and real-world wisdom about an immensely complicated business subject. Even more remarkable, he does so within relatively few pages (only 134 plus an Appendix). This will be an excellent resource for decision-makers in companies that plan to compete -- or now do so -- in the global marketplace but also for decision-makers in other companies that wish to do business with them.
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5 of 5 people found the following review helpful:
5.0 out of 5 stars
From the strategic thinking standpoint, this is an excellent book on the development/management of strategic alliances!, January 14, 2009
This review is from: Strategic Alliances: Three Ways to Make Them Work (Memo to the Ceo) (Hardcover)
'Strategic Alliances: Three Ways to Make Them Work',
by Steve Steinhilber
From what I have read in the newspapers & online magazines, strategic alliances seem to be pervasive throughout today's business landscape, & they certainly have big impacts on the way business is now conducted across the globe.
First, the realities, according to the book:
- more than 2,000 strategic alliances are launched worldwide each year, with an annual growth rate of 15%;
- slightly more than half of them fail;
- more than one-third of them struggle in alliances;
- only 9% consistently build alliances well;
- 15 most successful alliances added US$72 billion in shareholder value over 2 years but that the same number of bad alliances cost companies US$43 billion;
Rather depressing news, isn't it?
This book is a timely attempt to do them right.
I wish to say that, from the strategic thinking standpoint, this is an excellent piece of writing on the development & management of strategic alliances.
The impeccable track record of the esteemed author, as VP of Strategic Alliances at Cisco Systems, with a portfolio of alliances that crosses multiple industry sectors, technologies, & geographies, that has attained cumulative value of more than US$4.5 billion annually in business impact to Cisco & much more than that to the alliance partners, certainly makes the book credible & compelling.
In a nut shell, this book is truly an "insider report", with a "down in the trenches" perspective, so to speak.
It's a very thoughtful, masterfully written, intellectually rich, experience-based exploration & assessment of strategic alliances as an increasingly important way of competing, or more specifically, a competitive weapon, in a globalising world.
I reckon, for the reader, it covers most of the specific managerial challenges often involved in establishing & operating alliances, from initial setup & throughout the life cycle, right down to exit strategy.
The way I read it, I also reckon that the esteemed author has done a marvellous job of capturing all the foreseeable subtleties & nuances that must be addressed when entering into alliance relationships.
What I like best about this book is that, besides talking about the "what" & "how" to go about the game plan, the author has patiently explained the "why" of each & every step through the six stages of the alliance life cycle (illustrated on page 18 of the book):
- evaluating a strategy & potential partners;
- forming a relationship;
- incubating the partnership;
- operating the alliance;
- transitioning to the next level;
- retiring the alliance when it no longer meets mutual goals i.e. the exit strategy;
(comprising 30 best practices that address the key deliverables across the six stages)
which hinges on three essential building blocks (by the way, each aspect is featured in detail separately in a chapter on its own):
1) the right framework;
2) the right organisation;
3) the right relationships;
in addition to the five basic criteria to identify & characterise possible alliance relationships.
The esteemed author makes it very clear that doing your due diligence & following a systematic process is critical at the onset. He asserts that having a truly repeatable disciplined process can cut the failure rate by more than half.
The book therefore offers readers real-world takeaways in the form of valuable perspectives, useful advice & practical checklists/questions.
The end result is a powerful framework for anyone or any company who wishes to conceive, develop, & execute an enduring partnership &/or networks of partnership.
For me, the most valuable chapters are the ones in which the author gives a fascinating account of the soft social dynamics underlying most alliances (under 'Building the Right Relationships'), & an absorbing account of thinking strategically & creatively in the areas of IP management, portfolio management, competition dynamics, globalisation & metrics (under 'Managing Complexity').
In contrast to a similar book which I had read about ten years or so ago, entitled 'Smart Alliances: A Practical Guide to Repeatable Success' by two consultants from Booz Allen & Hamilton, this book has surpassed my personal expectations with its nuts & bolts of implementation, as well as its road map of the various pitfalls, roadblocks & landmines.
Here are my takeaways in terms of valuable insights - they are not meant to be exhaustive:
- start with a strategy, not a partner;
- your approach needs to look at the big picture rather than short terms payoffs;
- the right way to think about partnering revolves around negotiating win-win agreements & growing the market for everyone;
- start with a clear strategic focus: what are you trying to do;
- any partnership must satisfy a market need, address customer demand, & meet defined business goals;
- expect to make trade-offs with every alliance;
- an early step is to jointly create your operating plan; start with a focused set of balanced initiatives, meaning you have short term & some long term wins for both companies;
- one of your biggest challenges is staying focused;
- the right people are your most important assets; this is a team based approach;
- you can manage relationships with the right blend of art & science: with first rate people skills & a systematic process for strengthening connections;
- strategic alliances are more than just legal contracts - they're living, dynamic relationships between real people;
- think in terms of win-win negotiations, & what's on it for "we" vs "me';
- you must take the time to learn your partner's real goals & ambitions, & to understand what really makes them tick, philosophically & culturally;
- you got to push beyond the other side's stated positions to uncover that company's unexpressed, deeply held fears & interests;
- you have to be accountable to your partners for relationships to endure - actions are all that count;
- when it comes to relationships, you have to be reasonable - keep your eye on the endgame;
- managing IP is a challenge that continues through the life of any relationship;
- make sure everyone understand the rules of engagement with regard to IP assets;;
- you must have a metrics framework that you can apply consistently across all your alliances;
- remember, it's all about leverage;
- alliances are art & science, people & process; it's a "both/and" way of thinking rather than an "either/or";
To conclude my review, I must reiterate that this book is a true field guide to show you how to avoid the troubles that plague so many alliance efforts & how to forge a collaborative link that adds value to all partners in the alliance.
[Reviewed by Lee Say Keng, Knowledge Adventurer & Technology Explorer, January 2009]
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