Strong market demand

When I was at HP there was an old saying that nothing created urgency better than customer demand and competition. And there’s a lot of truth in that statement. If the main purpose of an alliance is revenue growth, then both parties will be motivated to act quickly to exploit market demand faster than the competition. The call to action then for both parties is to characterize and quantify the specific market segment where there’s greatest demand. But make it real for both companies not just a theoretical market segment. Contracts will be signed a lot faster if both companies can see a backlog of orders ready to be fulfilled. So identify a pipeline of opportunities that both sides could accelerate by working together now.

Executive Sponsorship

Many alliances stall out during the courtship phase (pre-contract) because one or both executives of the two parties does not attach enough priority or have sense of urgency for this particular transaction to close quickly. This can be particularly disappointing to the Directors of Business Development who are trying to build shared vision and goal congruence. My advice here is early involvement of the executive sponsors on both sides. Don’t waste their time by inviting them to the qualifying meetings early on but rather after you’ve both done your homework and see a very real joint business proposition.

Competitive Threat

The other half of the HP saying was the power of competition to create urgency. If your #1 competitor is rapidly signing up lucrative reseller agreements with the industry leaders, then you are probably extremely motivated to get moving yourself. We’ve seen this dynamic play out very often when companies like Microsoft, Cisco, Oracle, and Symantec acquire a technology. Very often the acquired firm’s resellers become unhappy with the new partner because of their long standing relationships with competing resellers or because of the threat of the acquirers’ direct sales force stealing business away. So map out the competitive dynamic and use this as a card to play with both executive sponsors to create urgency.

Proven Process

Speed also comes from being effective and efficient. And the key to this is having a well trodden path or process for the partner recruitment phase. Most processes we’ve seen have the following basic steps:

• Suspect – target list of companies to pursue proactively
• Prospect – initiated discussion with a target firm
• Qualified Prospect – target meets criteria and both parties pursue relationship
• Due Diligence – parties test key assumptions pivotal for future business results
• Contracting – negotiations involving Legal, Finance, and Human Resources

Leadership Expertise

Swift and effective alliances are often a direct outcome of a seasoned business development executive. We encourage you to hire someone who has a track record for leading the whole alliance process from contact to contract to cash flow. You’ll find the best candidates have a knack for creating a shared vision, orchestrating a team of managers to build the relationship, and staying focused on achieving measurable results. And note that Business development for alliances is very different from sales or account management. It combines the transaction oriented mindset in sales with the long term relationship building orientation seen in account management.

Resources

Speed will also come from arming the business development executive with necessary resources for each phase of the recruitment process.

• Suspect – target list of companies with contact information for specific individuals
• Prospect – email templates, phone scripts, brochure pdf, and short pitch
• Qualified Prospect – ROI/TCO calculator, longer pitch with details on partnership elements, contract template, and access to key managers for drill down discussions
• Due Diligence – company financials, delivery metrics, customer references, and more access to key managers
• Contracting – key managers have made this deal a high priority, CEO balancing the tension between legal team and business team.

© Sridhar Ramanathan