Small-to-Midsize firms often form alliances to kickstart growth

13 Jul '07

3 min read

“The deals being done now tend to be better thought out – with the caveat that there are still tremendous challenges around governance,” says David Ernst, leader of global alliances for McKinsey & Company in Washington D.C.

The Conference Board examined a few small and midsize companies that appear to have gotten over the hurdles to see how they benefit from alliances and collaborate with their partners.

Choosing a Big Brother
Experts interviewed by The Conference Board suggest some criteria when selecting a potential partner:

• Before bringing in the lawyers to draw up contracts, get the partnering teams together in a room to talk about philosophy and goals. Says Robert Spekman, professor at the University of Virginia's Darden School, and author of Alliance Competence: “I don't care how good the deal is. If your partner doesn't share the same vision, the same set of morals and ethical standards, walk away.”

• Look for clues that the larger partner takes you seriously and truly wants to help foster your growth as well as its own. You need assurances your company will be listened to and have a voice in major decisions.

• Do your due diligence about the potential partner's behavior in past alliances, whether it has kept its promises and maintained the trust of its partners.

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