How to Build Business Alliances

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3. Making It Work
New allies often find it difficult to actually work together, not least because of the differences in corporate cultures. The key conflict usually revolves around how decisions are made, says Slowinski, especially with companies of different sizes.

Plan the decision-making process. As early as possible, you and your counterpart should discuss the first major decisions on the horizon and how each company would normally make them -- the key people, the reporting lines and committees that will have to sign off -- and how long the process should take. Determine if each side can live with the decision structures in place. If not, Slowinski suggests, make recommendations to senior management about how to adapt them to allow the alliance to move along efficiently.

Meet all your partners. You can also smooth the process of implementation with an orientation meeting for the rank and file of both parties immediately after the alliance is consummated. Here, the responsible managers introduce the alliance and explain its purpose and how it will work.

Find a champion. Particularly if you are partnering with a big company, in which many priorities compete for scarce resources, a champion can protect the alliance from inertia and indifference and see that it gets the needed people and money. Some companies have formalized the role of the champion, but often the best champions are self-selected -- people who are notably passionate about innovation or the alliance. They can be at any almost level of the corporate hierarchy, but they tend to have the ear of someone upstairs.

Of course, you have no say in who becomes the champion at your counterpart, but you can provide a nudge, says Slowinski. If, in the interactions with your prospective partner, you encounter someone who "has the same sparkle in the eye that you have, you've found yourself a champion," he says. Encourage your counterpart to welcome the interloper to the team. "You can make the comment, 'He or she seems passionate about this -- I can work with that person.' "

How to Share Ideas

Intellectual property, or IP -- whether it's a new technology or customer lists -- plays a complicated role in an alliance. On one hand, it often lies at the center of a joint venture. But most companies are used to keeping secrets secret -- and suddenly, employees are being asked to do otherwise. Here are two ways to avoid IP problems.

Make it clear what you are sharing -- and what you are not. Partnerships can be quickly frustrated when rank-and-file employees aren't sure which intellectual property they can share with the other company. Slowinski recommends convening a private meeting with your employees to go over the ground rules for disclosing intellectual property: what must be shared; what may be shared, depending on the circumstances; and what can never be shared. Also explain how the company will protect its partner's intellectual assets. And it's worth keeping assets that may be shared separate from those that may not -- on a separate server, perhaps.

Plan for the end. Whether business alliances break up over a disagreement or just run their natural course, many eventually end. But once IP is shared, it is often hard to put it back in the bag. The agreement should address this issue in advance. Does the use of your partner's assets end with the venture? That is often the case when one partner licenses a new technology or other IP to another: When the alliance ends, so does the license. But what about client lists? And what happens to the intellectual property you develop jointly? Be certain that your agreement specifies who gets the kids in the event of a divorce.

Put it in Writing

"If you don't have a written agreement, you have no agreement," says Barry Sloane. The document should encompass all the parties' legal obligations. If the allies have to come to other understandings -- over, say, a mission statement -- these should be attached to the contract in an appendix, says Lynch.

Don't jump to conclusions. Beware, writes venture capitalist Guy Kawasaki in The Art of the Start, beginning the negotiation with a draft contract. The document can take on a life of its own and potentially upend the talks.

Anticipate the worst. The contract should completely define the process for when things go wrong -- and be sure, says Sloane, to allow for quick exits. "We think marriages are best when they're shotgun marriages." According to Kawasaki, an escape clause "assures both parties that they won't be trapped in an untenable predicament."

Resources

The Association of Strategic Alliance Professionals (strategic-alliances.org) has a list of consultants and a library of articles, available to members.

The Licensing Executives Society (lesi.org) is an organization of people interested in technology and IP transfer, including company officials who acquire technology from other businesses. The North American chapter (lesusacanada.org) has 5,000 members.

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