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36
STRATEGY

The Art of Effective Alliances

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When we started FamilyEducation Network in 1990, we understood that we would have to build our business on carefully chosen and sensitively nurtured strategic alliances. That's precisely what we have done. And along the way, we have learned many valuable lessons about what makes strategic partnerships work. What's most important, we have found, is that they're all about relationships.

Our company aims to build the largest K-12 community on the Internet, bringing together parents, teachers, students, and schools. We started with a newsletter, and in 1996 we launched our first Web site.

Today, FEN is a network of Web sites serving the K-12 community, which includes FamilyEducation.com (parents), TeacherVision.com (teachers), and Infoplease.com (students, teachers, and parents). FEN also serves as a host, linking participating schools through their own customized Web sites directly to parents and students in local communities. More than 2.5 million individuals visit our sites each month.

Over the years, we have joined in strategic alliances with such organizations as the National PTA and the National Education Association, and such corporations as America Online, textbook publisher Harcourt General, and microchip manufacturer Intel. Each has added to our credibility and moved us closer to achieving our vision.

We found that with each successful alliance, others followed. When AOL saw that we were working closely with the PTA, it wanted to invest in us, and with AOL's participation, other nonprofit groups wanted to get involved, too. As they joined in, Intel and Harcourt became interested.

Avoid Mistakes

A strategic alliance means that the two partnering organizations are involved in something that is of deep importance to both. It's an ongoing relationship. We've tried hard to stay clear of two mistakes we've seen many other entrepreneurs make:

  • Thinking too small. Too often, an entrepreneur asks the potential partner for an endorsement in return for putting the partner's logo on the company's Web site. That's not strategic.
  • Thinking only of what the potential partner can do for your company. Strategic alliances have to create a situation where both parties gain something; otherwise, they're not partnerships.

Tips for Building Effective Strategic Alliances

  • Build on trust. Strategic alliances are all about relationships because they're built on trust, dedication, and mutual interests. They require the respect and interaction of people in each organization. Strategic alliances, like good personal relationships, require effort to build, and once they're in place, you can count on them.

    Our experience tells us that successful strategic alliances are characterized by the following:

  • "A give and a get." Each party has to give something and get something in return. When you're the seeker, it's important to be clear about what you have to offer the potential partner. With our corporate partners, money is the prime issue: how can we enhance each other's growth and profitability? Our investors get equity in our company and, if they are major investors, membership on our board. If you haven't taken the time to think through how both sides will benefit, then don't pursue an alliance at this time. You might blow your chance with that organization.

    The nonprofit associations with which we work are mission driven, so we have to find ways to help them fulfill their mission. For example, the Council for Exceptional Children needed an inexpensive way to reach parents of gifted children. Now an area of our parents' Web site focuses on working with gifted kids. CEC supplies content, and we provide access to parents as well as editorial assistance in packaging CEC's information. And we get a lot of loyal parents telling us, "FamilyEducation.com came through for me again."

  • Commitment. Each party has to be prepared to dedicate resources to the other. For example, we've devoted three-and-a-half staff positions to working with our association partners. And we expect our partners to assign skilled and competent people to us as well.

  • Patience. Strategic alliances take time to develop and time to maintain. When you're starting out, don't make judgments about potential partners, especially nonprofits, if they seem reluctant. They are besieged with requests. Figure out how to stand out from the crowd.

    We were able to offer a real strategic advantage. Many times, we were the first to approach an educational association and say, "There's this thing called the Internet. We know how it can help you." Sometimes, we didn't even say early on what we wanted in return. We just offered help, tried some things together informally, and built trust.

  • Participation at the top. If the top people in both organizations aren't supporting the goal and working with you, then it's not strategic. The point of any strategic alliance should be to make an impact, and you can't do that without the active engagement of the top people of the organizations involved -- yours included.

    We've found that when we want to approach a potential corporate partner, we have to find someone within that organization who will champion us. Sometimes that can happen with a cold call, but more often, we achieve that through a relationship -- often a friend who leads us to just the person who is turned on by our ideas.

  • Listen. And one final, very important thought: Be all ears. Listen to your potential partners. What they tell you will not only give you clues to their needs but may influence your thinking in ways you've never even imagined.

Our first strategic partner was the American Association of School Administrators. When we first approached the association's people, we were thinking just in terms of a national Web site. But they were looking for a way to support parent involvement in schools. They told us, "We really ought to think about how you do this at the local level." That led us to thinking about hosting school Web sites.

It's through AASA that we reach school superintendents. AASA sends a letter, signed by its executive director, introducing us to superintendents throughout the country. Now more than 7,000 schools use our Web publishing tools and services, thanks in part to the credibility AASA has given us. And through us, AASA gets visibility for its support of parent involvement in education.

Our relationship with AASA is what every strategic alliance ought to be: win-win for everybody.

Any relationship, to be successful, requires mutual trust and patience, and a commitment to seeing that both sides come out winners. Choose your partners with these goals in mind, and you'll quickly discover how much more you can accomplish within a strategic alliance than you could ever do on your own.

Jonathan Carson is chairman and CEO of FamilyEducation Network, a Boston-based business that he cofounded with Carroll T. Miller in 1990.

Copyright © 1999 EntreWorld.org

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Last updated: Aug 16, 2000




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