ASAP unveiled a landmark alliance management study to a packed room at the Revere Hotel in Boston, a block from the Boston Common, during the recent 2016 ASAP BioPharma Conference, “New Faces, Unexpected Places in Partnering: The Foresight to Lead, the Foundation to Succeed,” which took place Sept. 7-9. The session “Applying the Latest Alliance Management Research to Your Partnering Practice” introduced the ASAP-commissioned 6th State of Alliance study, “The Economics of Alliances, Social Capital, and Alliance Performance,” researched and authored by Dr. Shawn Wilson, DBA, vice president and general manager at Beaulieu Group. The report provides economic and financial metrics based on extensive research and data analysis. "What is so important about this report is that it's the first time alliance management studies have gathered defined economic or financial outcomes as well as provided recommendations for improvement,” pointed out Michael Leonetti, CSAP, CEO of the Association of Strategic Alliance Professionals, during the session introduction. The session also included a presentation by Stuart Kliman, CA-AM, co-founder of Vantage Partners, on his company’s 2015 study “Transcending Organizational Barriers—A Cross-Industry View of Alliance Management Trends and Challenges.” Part I of this blog focuses on Wilson’s key findings.
If you attended the ASAP BioPharma Conference last week or in years past, chances are you’re working for a successful company that has great balance and capability sheets, as well as skilled managers supporting company alliances. If you’re only concerned about the visible firm profile, however, you may miss the iceberg below the surface—the more massive structural configurations, norms, meanings, and work systems. Those subsurface dynamics can be swirling with conflict, which is why Dr. Shawn Wilson of Beaulieu Group, one of the world’s largest floorcovering manufacturers, did a deep dive about a year ago with a three-stage study that included qualitative interviews, a pilot study, and quantitative study of social capital. The consultant, published author, and researcher affiliated with Georgia’s Kennesaw State University worked with ASAP to provide new financial and economic ROI analytics that reflect partnering best practices. The study is based on the finding of three distinct dimensions of social capital: structural, cognitive, and relational.
Social capital is the aggregate informal resources available to an individual, group, or institution that is generated by positive interactions. It effectively facilitates interactions, acting as a catalyst for inter- and intra-organizational transactions. Wilson used the concept of social capital as a tool to explore the tougher dynamics between organizations—and the potential to alleviate organizational problems in transactions and other interactions.
“Social capital can be a force that pulls firms together or pushes them away. The more those dimensions of social capital push firms away, the longer the bridge needs to become in an alliance,” observed Wilson. “One of the biggest challenges firms have is that they overestimate what spans the bridge.” He then begged the question: “Were we successful because of the unknown factors under the iceberg?”
The audience was then asked to consider a strong relationship between two people. “That strong relational tie doesn’t mean there will be strong ties when the entire family gets together,” he pointed out. Now consider the failed alliance between Tesla and Toyota, which started as a friendship between the two CEOs, he continued. “The mismatch between the two firms was too much for the alliance to bear.”
The second finding from the study is that “the right kind of experience counts,” he said. The data don’t show that social capital improves when relationships strengthen; when it comes to an alliance executive’s experience, it’s not about the tools brought in. It’s about how to measure up to a firm’s potential partnership through nuance, he added.
The third finding? Companies with above-average social capital outperformed their peers. The financial measures were much higher when perceptual measures were met, such as satisfaction, the accomplishment of strategic objectives, and stability.
Watch for Part II of our coverage on “Applying the Latest Alliance Management Research to Your Partnering Practice,” Stuart Kliman’s presentation of Vantage Partner’s study “Transcending Organizational Barriers—A Cross-Industry View of Alliance Management Trends and Challenges.” You can read more about ASAP’s 6th State of Alliances in the Summer 2016 Strategic Alliance Magazine.