Total Click Solutions

Tag: business growth

  • Before You Sign: Vetting a Strategic Alliance

    Before You Sign: Vetting a Strategic Alliance

    The failure rate for strategic alliances sits somewhere between 60 and 70 percent, which is remarkable given how enthusiastically businesses pursue them. Everyone agrees partnerships are a fine idea, and then a substantial majority quietly collapse within a few years. The problem is almost never bad luck. It’s that the groundwork wasn’t done before anyone picked up a pen.

    Why most alliances go wrong before they begin

    The most common explanation is deceptively simple: most alliances that fail should never have been started, because there was no genuine compatibility between the parties. Not a clash of personalities, not a bad contract, not market conditions, just two organisations that wanted different things and never properly checked whether they were aligned before committing. Research consistently points to the same cluster of causes: incompatible objectives, poor partner assessment, and a lack of executive commitment on at least one side of the table.

    Companies that approach alliances in an ad hoc, instinctive way report roughly a 20 percent success rate. Those that follow a structured process do considerably better. The structured approach isn’t complicated. It’s mostly just asking the right questions early enough that the answers can still change your mind.

    The questions worth asking before anything is signed

    What does each party actually want from this? Not what they say in the first meeting, but specifically: what does success look like in 18 months, and whose priorities take precedence when those definitions conflict? If neither organisation has written this down and compared notes, you’re already in trouble.

    Who will own this relationship day-to-day? One of the quieter killers of a strategic alliance is that senior leaders agree on the vision and then the whole thing gets handed to whoever has a spare hour. Companies with the best partnership track records tend to have a named person whose actual job is managing the alliance, someone with real authority and a budget, not a project manager carrying it alongside three other responsibilities.

    What does the other party’s history with partners look like? Ask directly whether they’ve been in alliances before, how those ended, and what they learned. A company that has dissolved several alliances isn’t automatically a bad bet, but the explanation matters. If the answer is vague, or they point the finger at every previous partner, that’s genuinely informative.

    How will you measure whether this is working? It sounds obvious, but a great many alliances that collapse do so partly because neither party agreed on measurable milestones at the start. Without a shared definition of progress, one side always ends up quietly concluding that the other isn’t pulling their weight, and resentment grows faster than revenue.

    What happens if one of you becomes a competitor? This is uncomfortable to raise early, but Cisco’s experience is instructive: its alliances with Motorola and Ericsson fell apart after acquisitions made them direct rivals, whilst its partnership with Microsoft survived because both parties were willing to limit the scope of their collaboration when competition grew. Building an exit or adaptation clause into the agreement from the start isn’t pessimism. It’s just tidiness.

    The thing most businesses skip entirely

    Before you assess anyone else, it’s worth being honest about what your own organisation actually brings. A good strategic alliance should mean each party contributing something the other genuinely lacks: complementary capabilities, market access, technology, distribution, whatever it might be. If you’re not clear on your own gaps and strengths going in, you’re not well placed to judge whether a potential partner fills them, or whether you’re both just hoping the other one will do the heavy lifting.

    The alliance that works is usually the one where both parties were a little nervous to commit, because they’d done enough digging to understand what they were actually getting into. That discomfort is, oddly, a good sign.

    Frequently Asked Questions

    How long should vetting a strategic alliance partner take?

    There’s no fixed timeline, but rushing it is the single biggest risk. For a substantive alliance involving shared resources or co-development, a few weeks of structured conversations, reference checks, and written goal-setting is a reasonable minimum. Larger commitments warrant proportionally more time.

    Do we need a formal legal agreement for a strategic alliance?

    Yes, even for relatively informal arrangements. A written agreement that spells out goals, responsibilities, how decisions get made, and what happens at exit protects both parties and, more practically, forces you to have conversations you might otherwise avoid until things go wrong.

  • Why Business Partnerships Fail Before Year One

    Why Business Partnerships Fail Before Year One

    Most business partnerships that fall apart in the first year were in trouble before the ink dried. The market didn’t shift, the product didn’t fail, and nobody acted in bad faith. The agreement simply never resolved the questions that would eventually become arguments.

    The most common culprit is a confusion between enthusiasm and alignment. Two companies find each other genuinely complementary, the early conversations go well, someone suggests putting something in writing, and the paperwork ends up reflecting what both sides hoped the relationship would be rather than what they had actually agreed on. It is a remarkably easy mistake to make, and it tends to surface at the worst possible moment: when a customer complains, when a big deal is on the table, or when one party quietly starts working with a competitor.

    The gap between intent and operating reality

    A partnership agreement that defines the goal but not the day-to-day is an argument waiting to happen. Who owns the customer relationship? If a client comes in through your partner’s network but renews directly with you, does the partner still earn commission? Who handles complaints, who can discount on whose behalf, and who speaks to the press if something goes wrong? These are not edge cases; they are the ordinary texture of a commercial relationship. If your agreement doesn’t answer them, goodwill is filling the gaps, and goodwill has a habit of running out.

    Document the operational logic, not just the commercial intent. That means specifying, in plain language, where one party’s responsibility ends and the other’s begins, down to customer support handoffs and invoicing.

    Misaligned growth ambitions

    A subtler problem is when both parties want the partnership to succeed but for different reasons, on different timescales. One company is playing a long game, building a channel that will matter in three years. The other needs pipeline this quarter and expects referrals immediately. Neither is wrong in isolation, but together they will frustrate each other constantly, and that friction tends to be read as a lack of commitment rather than a structural mismatch.

    Before signing anything, ask your prospective partner directly what success looks like at six months, at eighteen months, and at three years, then listen carefully to whether those answers are compatible with yours. If the timescales don’t match, that needn’t be a deal-breaker, but it does need designing around, perhaps by building short-term milestones that give the impatient party something tangible while protecting the longer-term vision.

    The wrong partnership type for the actual goal

    Referral agreements, reseller arrangements, co-sell partnerships, and joint ventures are genuinely different things with different risk profiles, different revenue implications, and different levels of operational entanglement. A referral agreement is light-touch: your partner mentions you to their clients, you pay a commission if a sale results, and the relationship stays fairly arms-length. A reseller arrangement is considerably more involved; your partner takes ownership of the sales process and often the customer relationship, which means your brand is largely in their hands. A co-sell motion, where both parties show up to the same deal together, sits somewhere between the two in complexity but tends to produce the largest deals when it works.

    Picking the wrong type wastes months. A company that needs controlled brand representation but agrees to a full reseller model will spend the next year firefighting. A company that needs volume and geographic reach but signs a referral agreement because it feels less risky will wonder why nothing is moving.

    What a good early warning looks like

    If a prospective partner is reluctant to define success metrics before signing, that is worth heeding. It doesn’t necessarily mean bad faith; it often means they haven’t thought carefully about what they want from the arrangement, which is arguably more worrying. Partnerships that begin without agreed KPIs tend to drift, and drift is very hard to reverse once both parties have mentally moved on to other priorities.

    The other warning sign is urgency that discourages scrutiny. A partner who wants to move very fast, skip legal review, or treat the agreement as a formality is either inexperienced or has reasons to avoid careful reading. Slowing down is the right response either way. Partnerships that are genuinely good opportunities don’t evaporate because you spent an extra fortnight getting the terms right.

    The most durable partnerships, the ones that generate real revenue and survive personnel changes on both sides, almost always start with conversations that both parties found slightly tedious. The awkward questions about money and responsibility got worked through before anyone was under pressure, and the resulting document was one neither side needed to revisit in a hurry. That kind of groundwork is not glamorous, but it is the only part that actually determines whether any of this lasts.