You’ve signed on the dotted line, closing the deal on a strategic alliance for your company. You’ve offered the virtual handshakes and celebrated with your team. Now what?
After closing the deal on a strategic alliance, launching innovative and market relevant joint offerings is likely top of mind. I see many clients so eager to tap into and scale the innovation an alliance can provide. I love their enthusiasm, really. And I sometimes hesitate to dampen it by letting them know how complicated it can be to drive profitable innovation and commercialization at scale. Research indicates that three out of every 10 alliances (30%) fail partly because they don’t achieve the anticipated technological and commercial results. There’s hope—and I’ll soon get to that—but first, let me talk a bit about what happens when it doesn’t go right.
Alliances can become overloaded with joint offering ideas based on customer needs, product management pipelines, and industry trends. They often don’t have an approach to sort through these ideas, prioritize them, develop them, and commercialize them in a way that avoids customer confusion. And they need to define that approach to avoid cannibalizing existing offerings. If these joint offerings involve net new intellectual property (IP), alliance partners experience challenges sorting long-term ownership and licensing arrangements.
It’s not that the senior executives who forge these alliances go in blind to the potential pitfalls. In fact, 76% of them agree that successful innovation requires collaborating with partners in new ways. It’s that they’re unsure how to set themselves up for maximum innovation with maximum value.
I’ve seen how and participated in making that value a reality. And it takes an Alliance Innovation Hub.
Standing up your Innovation Hub
What is an Innovation Hub, anyway? It’s an alliance-specific organization focused on profitably delivering innovative joint solutions to the market. Consider it the de facto innovation engine for your alliance to explore and manage new technologies, fuel experimentation, and commercialize true “white space” offerings at scale.
To stand up and run your Hub, your alliance needs three lean capability teams to better understand customers, develop solutions, and deliver offerings:
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Alliance Partner Management
This is the business “control tower.” This team provides strategic guidance across the Hub. They manage annual planning, offering identification and prioritization, portfolio, and business-case development. They also support the legal team (especially as related to IP), financial management and reporting teams, and voice-of-the-customer initiatives.
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This is the “factory.” This team directs all stages of the product or service offering, from creation to delivery. They are responsible for offer development & deployment, use case definition, demos and pilots, and solution customization/support. This team will also provide key inputs for IP arrangements and offering portfolio management.
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Sales and Go-To-Market
These are the “feet on the street.” This team drives the go-to-market model and deal desk, enables effective marketing and communications, pipeline and deal management, and sales execution and enablement. They also are on the frontlines with the customer, learning what works and what’s not, minimizing confusion and portfolio cannibalization.
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To ensure strategic alignment and a vision that represents all interests, each team should be comprised of employees from both partner companies.
Putting the Hub to work
For many high-tech firms, it’s combining people and processes that slows the development and commercialization of offerings, not the complexity of the emerging technology.
You’ve identified the people and built the teams, now how do you ensure you have the right processes in place to be successful? We put together a best-practice model to ensure your Innovation Hub is maximizing research, development, and execution capabilities:
The science of collaboration in an Alliance Innovation Hub
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Caption: An interaction model enables the right activities to create, deploy, sell and support joint offerings.
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- Alliance Partner Management identifies and prioritizes target areas of collaboration using pipeline, customer, existing IP / offering portfolio, competitor, and market data
- Alliance Partner Management communicates these opportunity areas to Offer Management, who then defines use cases and develops offerings – they may also develop net new IP
- Offer Management collaborates with industry or group-specific subject matter experts from the broader alliance partner companies to better define offerings and estimate potential value
- Sales & Go-To-Market prices the offering and markets it to target customers, with inputs from Offer Management
- Sales & Go-To-Market works with customers to understand their needs, customize offerings, close deals, and actively manage contracts through the deal desk
- Offer Management works directly with customer (or through Sales & Go-To-Market liaison) to deploy, integrate, support, and improve offerings
- Alliance Partner Management refreshes partnership contract as needed and regularly re-scans environment for new use case opportunities – they may also coordinate any IP arrangements
From “Now what” to “What next”
Even the North Atlantic Treaty Organization (NATO), an organization founded in 1949, has an Innovation Hub. And it has imagined how it will operate nearly 100 years after its founding. Innovation Hubs are challenging, yes, but they’re exciting and completely doable if you have the right guidance.
Constantly developing new, exciting offerings and getting customers to buy them, and then delivering them profitably is a complicated task. Building an Alliance Innovation Hub to run the end-to-end offer development, execution, and support processes for your alliance will give you the greatest chance at long-term success and sustainability.
I’ve written over the past few weeks about several aspects of strategic alliances, from how they fit into a growth playbook to alliance enablement. Now it’s time for you to reflect. Where do you want to be? What do you need to get there? Does your business have the right capabilities in place to rapidly innovate and commercialize at scale? If not, how might you nurture an alliance ecosystem to support you?
As you reflect, we challenge you to think about strategic alliances in new ways, whether that be forming a new cross-industry alliance to explore robotics, restructuring the processes within your current alliances to focus on customer centricity, or somewhere in between. Regardless of what you choose, with the uncertainty of the “new normal,” and a rapidly changing tech landscape, there has never been a better time to rethink your innovation and growth strategies.
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