As companies prepare for tomorrow's competitive battles, the idea of building organizations with extensive internal capability seems increasingly archaic. For many businesses, alliances with suppliers, customers, and even competitors represent the wave of the future. In addition to being less capital-intensive than going it alone, such strategic partnerships can give businesses a leg up in the market. But as Robert Porter Lynch points out in his book Business Alliances Guide: The Hidden Competitive Weapon (John Wiley & Sons, 1993, $29.95), designing relationships that work is easier said than done.
Lynch, a consultant who has helped design or manage more than 40 alliances, offers a credible analysis of why strategic linkups have become more common. One big reason: companies have lost faith that acquisitions can work. His most valuable contribution is his discussion of how to think through what he calls "alliance architecture." Many relationships disintegrate not because managers are weak negotiators but because they don't know how to manage the deals after they've been struck.
Lynch's book is packed with pointers on how to find partners, how to use lawyers, and how to deal with issues of ownership and control. For those who want to enter the era of alliances with their eyes open, it's a timely resource.* * *