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Two Studies Provide Valuable Economic and Financial Metrics To Support Partnering and Revenues

Posted By Cynthia B. Hanson, Wednesday, September 14, 2016

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.

Tags:  6th State of Alliance  alliance  alliance management  Beaulieu Group  Dr. Shawn Wilson  economic and financial metrics  economic ROI analytics  Michael Leonetti  partnering best practices  partnerships  perceptual measures  social capital  Stuart Kliman  Tesla  tools  Toyota  Vantage Partners 

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Playing the Strategic Alliance Game: The 2112 Group’s Larry Walsh Provides an ‘ASAP Quick Takes’ Talk on Smart Moves and Strategy at the 2016 ASAP Global Alliance Summit

Posted By Cynthia B. Hanson, Wednesday, February 24, 2016

The world of business is sometimes perceived as a giant Monopoly game, where the luck of the dice and accumulation of assets win the game. For Larry Walsh, a more appropriate analogy is a chess game, with complex and sophisticated strategy that requires foresight and skillful coordination of the “chessmen” to provide an advantage. Walsh will be sharing his perspective and strategic insights during an “ASAP Quick Takes” talk “Seeing Around the Corners is a Masterful Move on the Partnering Chessboard” March 2 at the ASAP Global Alliance Summit. This year’s Summit, “Partnering Everywhere: Expert Leadership for the Ecosystem,” is scheduled to take place March 1-4 at the Gaylord National Resort & Convention Center, National Harbor, Maryland. Patterned after the popular “TED Talks,” and well-received at the 2015 ASAP BioPharma Conference, ASAP will bring four provocative speakers to the stage to provide key, interlocking pieces about emerging ecosystems 

“Anyone who plays chess has their set of moves,” explains the chief analyst and CEO of The 2112 Group during an interview about the upcoming talk. “You know what you hope your opponent will do. It’s not so much about the element of strategy as much as why we need to do the things we need to do, and why avoiding them comes with risks. If you are focused on short-term planning, you are at risk for long-term disruption. If you fail to take into account what the opponent can and should do, you are putting yourself at risk. You need to survey and execute, making short- and long-term choices that increase success and mitigate risk.” 

A journalist, analyst, author, and industry commentator, Walsh is also the founder of Channelnomics, a leading provider of IT channel news and analysis. He is an expert and seasoned commentator on the Internet of Things, cloud computing, security, and analytics and works with clients to understand their problems and challenges, developing realistic outlooks and strategies to translate to operational frameworks for effective execution. 

“An effective strategy mirrors a vision,” he continues. “The first step in any successful venture is establishing what it is that you’re doing and why. The strategy outlines how you’re going to do it: a surveying and understanding of your landscape; an identification of where you’re going to play; your inventory, resources, and strengths; and translating all that go into how you’re going to execute your plan. Strategy developmenta critical phaseis about making choices. And if you fail to make the right ones, you often put yourself at risk.” 

He provides a current-day example: A client today has dozens of reseller partners. Two-thirds haven’t made a sale. To understand why sales are not being made, and how to get to first, second, and sustained sales, requires assessing and determining what resources are needed and to come up with a strategy and execution plan for sustained revenue generation.  One of the risks, however, is that “lots of businesses say they make choices, but they are consumed by revenue generation and don’t discriminate between good and bad decisions. They also fail to anticipate. This is where surveying the landscape equates with chess. If you don’t survey the landscape and understand your competition, you can’t anticipate what the opposition will do,” he says. 

Business is often reactionary. When launching a new product, it’s critical to estimate and survive the competition’s response, he adds. For example, Tesla wasn’t the first electric car, but it has more staying power and innovation than others because the company had a strategy. Instead of trying to build a low-end, mass-produced car, Tesla built a high-end, very expensive car. High-end products attracted high-end buyers, which allowed them to plow money back into their product, he explains: “They knew the GMs and Toyotas and Nissans would counterattack with more hybrids or low-end versions of electric cars. See how their strategy worked? Who is coming out with high-end electric cars that are more moderately priced? Porsche, Mercedes, BMW.” 

Different industries work at different paces for different reasons, sometimes to collaboration’s advantage, he notes. Collaborations can influence the pace at which data is turned into intelligence. It’s sometimes faster and more economical to partner with companies than to reinvent them. Leverage partnering strengths and offset company weaknesses for speed, efficiency, and effectiveness, he advises. “If we identify that our objective is a certain point ahead, and our resources can get us halfway there, then we need to look around for alliance partners to fill in blanks.” 

For more information on this topic, click here for Walsh’s webinar “The Channel Is Not the Best Route to Market but It Can Be,” which joins last year’s previous channel-related webinars now archived in the ASAP Member Resource Library, available for free to ASAP members (nonmembers can access for a fee). 

Tags:  analytics  ASAP Quicktakes  Channelnomics  cloud computing  collaborations  electric car  Internet of Things  IT channel news  Larry Walsh  partner  revenue generation  security  Tesla  The 2112 Group 

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