Book Review: The Strongest Link: Forging a Profitable and Enduring Corporate Alliance

    By: PDMA Headquarters on Oct 01, 2013

    Book Review: The Strongest Link: Forging a Profitable and Enduring Corporate Alliance   

    By: Gene Slowinski and Matthew W. Sagal. New York: AMACOM ,2003 . 288+xvi pages
    Review by: Preston G. Smith

    Book ImageDeveloping new products and services with alliance partners rapidly is becoming an important approach to new product development (NPD) because of the advantages it can create in terms of time to market, cost reduction, and technology access to name a few. In industries such as automotive, electronics, and pharmaceuticals, codevelopment alliances are common. In many other industries, codevelopment alliances are on the upswing. As a relatively new discipline within NPD, there is a great need for an accessible source of experience to avoid common alliance pitfalls and to descend the experience curve pioneered by others without having to make their investments. These two books provide this kind of insightful and practical guidance, and they both will be valuable for practitioners new to codevelopment as well as those who are more experienced.

    While both books cover the broad arena of alliances in general, NPD practitioners will find that the concepts and tools apply quite well to codevelopment alliances. New product development practitioners may find themselves wanting deeper insight into how the concepts play out as part of a product development system. For example, a book focused mainly on NPD alliances might be clearer about organizing cross-functional codevelopment teams or managing collaborative cross-functional gate decision-making. Still, making the translation from alliances in general to codevelopment alliances should not be a major leap. On the plus side, the breath of thinking about alliances in general will give NPD practitioners much to think about in taking full advantage of this approach in all aspects of their businesses.

    These books are nicely complementary. The Strongest Link is an outstanding toolkit for putting together a successful alliance. Its primary focus is at the individual alliance level, and it generally assumes that the reader has an underlying alliance strategy in place to guide alliance management. Mastering Alliance Strategy was written from the other perspective, putting most of its focus on formulating alliance strategy and building alliance management capabilities to support that strategy, to be applied across all individual alliances. Taken together, they provide a complete picture of alliance strategy and management that can be applied readily to NPD alliances.

    The two books differ distinctly in their style and research base. The Strongest Link is written by Gene Slowinsky and Matthew Sagal based on 20 years of their experience researching and supporting alliance development. It draws as well on insights gained from anthropologists for cultural integration, marriage counselors for interpersonal relationships, and psychologists for interfirm relationships. It is decidedly a toolkit filled with case examples, how-to exercises, matrices, checklists, and helpful hints that follow an overall framework for alliance management. Mastering Alliance Strategy is an editorial alliance of 18 contributors (including The Strongest Link's Slowinsky) and is closer to an anthology in its style. This makes for a somewhat less integrated reference at times. For example, there are multiple definitions of alliances, and some of the chapters have content that would seem more appropriate in other sections. To offset this, the editors have contributed a number of chapters spread throughout that pull the whole book together quite well. Along with these chapters, the book includes selected guest chapters such as the one describing Eli Lilly's Office of Alliance Management, as well as articles that appeared from 1994 to 2001 in The Alliance Analyst. It has many more case studies than does The Strongest Link, but it has many fewer tools. This may be due in part to its treatment of alliance strategy, which is more difficult to systematize and may be illustrated better through case examples that illuminate strategic concepts and alternatives.

    This review outlines each book with some comments on chapters and themes that I found most valuable.

    The Strongest Link: This book is broken into two parts: (1) planning and negotiating the alliance; and (2) implementing the alliance. The first part is built around a structure called The Alliance Framework® (a registered service mark of coauthor Sagal). This framework lays out the 14 critical elements of a successful alliance agreement as well as the iterative process for creating it. The first seven elements are called the Strategic Assessment Elements, and they include:

    Objectives

     Ours

     Theirs

    Roles

     Ours

     Theirs

    Overall Resources

     Ours

     Theirs

    Boundaries

    Market Model

    Strategic Exclusivity

    Intersection

    This list illustrates some of the recurring themes that make the book valuable. First, the authors show how to triage the critical elements while still being comprehensive in their thinking. Second, they repeatedly recommend treating alliances as a two-way affair, always trying to take both points of view (they recommend that many exercises be carried out twice, once from each perspective). Third, they suggest an iterative process that continuously refines the joint understanding of the elements.

    Of particular note in the first part of the book is the notion of having a process that emphasizes stop fast or go—so often it takes too long to negotiate alliances and even then, the result may be a problem. The tools offered focus on getting quickly and iteratively to the important issues that could kill the alliance. In some ways, it is analogous to a good stages-and-gates approach to NPD. In the earliest stages, the objective is often to determine rapidly and iteratively if a new opportunity has sufficient merit proceed.

    The second part of the book is about implementation and addresses issues including early join-up, conflict management, alliance metrics and management systems, and cultural differences management. Of particular note in part II are the approaches offered for getting the alliance off the ground from a people perspective. Expectations mapping, decision analysis, and a stepwise process for bringing the appropriate parties together are useful tools in this regard. Should an alliance run into trouble, there are tools such as such as breakdown sessions and trust self-assessment to help restore relationships.

    The Strongest Link does have a few shortcomings worth noting. It assumes that there is an alliance strategy behind the alliances, and it could have given more insight into alliance governance. As it turns out, these are well addressed in Mastering Alliance Strategy, which is one of the reasons these two books complement each other well. The only other drawback is that it describes an alliance management process that exists separately from the NPD process. Companies integrating these processes will need to make some translation from the general alliance level to the specifics of their NPD systems.

    Mastering Alliance Strategy: This book is organized in four sections: (1) designing alliances; (2) managing alliances; (3) competing in constellations; and (4) building an alliance capability. The book starts with the admonition to focus on alliance strategy rather than strategic alliances. This is right on target. As companies use alliances more frequently, it becomes incumbent on them to learn how to manage them more strategically. This includes having an overarching alliance strategy, understanding how alliances uniquely can add value to the business, how they bring value as a network (or constellation as referred to in the book), linking alliance selection criteria with strategy, and creating an overall enterprise capability to tap the value of alliances effectively. (For more on the power of alliance networks and more case examples describing the impact of global alliances on innovation capability see the January 2003 JPIM review of Doz 2001.)

    In the first two sections on designing and managing alliances, the most useful materials were those on governance structures. These tended to fill the gaps left by The Strongest Link and offered unique insights such as the notion that alliances need more, not less, governance over time. It is not that little governance is needed up front; it is just that it does not need to be too complex. As alliances grow and become more far-reaching and complex, then governance must be added to help manage this increased breadth and complexity.

    The section on building an alliance capability also was insightful. The danger of The Strongest Link is that it largely focuses on what it takes to make a single alliance successful. Doing this repeatedly to build a network of alliances requires a cultivated, repeatable capability. In fact, some would argue that the ability to create an alliance is a kind of universal core competence. The book offers a novel view of the stages of maturity of this capability, which could provide companies with a kind of road map for assessment and improvement.

    The Strongest Link also had a small list of shortcomings. I found myself wanting in Mastering Alliance Strategy the same kind of practical tools for creating a robust alliance strategy. Instead, it provided only insights into possible strategies through the rich examples used.Mastering Alliance Strategy was far more conceptual in comparison, but it may be targeted more to business executives formulating alliance strategy instead of alliance implementers.

    In summary, both of these books offer solid advice to those engaged in planning, managing, or executing alliances in NPD. If I had to have only one, I would start with The Strongest Link because it probably is geared best to where the majority of companies are today—trying to make individual alliances work as effectively as possible. For those that have a solid codevelopment alliance management capability in place, I would recommend Mastering Alliance Strategy because of its focus on managing across alliances.

    Released: October 1, 2013, 11:51 am | Updated: November 20, 2013, 11:51 am
    Keywords: PDMA Blog


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