Business alliances fail to perform

Alliances between companies have been hailed as one effective strategy to drive up efficiency and competitiveness, whilst driving down costs and duplication of effort.

Andersen Consulting has followed up its study of the growth of e-business in Europe - itself one contributor to the joint working trend - with an analysis of the success of corporate alliances.

The outcome is not good. Over 60% were found to be under-performing or to have failed altogether.

Extensive research has led Andersen to the conclusion that there are five 'myths' getting in the way of successful collaboration. In summary, these are:

• an alliance is like a marriage - up to a point, says Andersen, but a better image is diplomacy
  
  
• integration for an alliance is the same as for a merger - in fact, danger lies in pursuing integration too quickly and too thoroughly
  
  
• one governance model fits all - how well the collaboration is managed has a major influence on performance and must be tailored to specific circumstances
  
  
• alliance expertise should be in the hands of a small group of decision-makers - in reality, a broader network of managers, drawing on a deeper pool of talent, provides more consistent success
  
  
• performance is impossible to measure - difficult maybe, says Andersen Consulting, but measurement through benchmarking, balanced scorecard or similar techniques is essential.

"If corporate leaders expect alliances to contribute to winning strategies," says partner Charles Roussel, "they must apply the same rigour to managing them as they would to any high-profile project."

Elliott Chase