Alliance Strategy in Challenging Times: Rebalancing the Portfolio

Is it time to reevaluate your alliance investment?  Do you have the right partners to weather the economic climate?  Are you retaining the right partners to ensure you have a strategic advantage when the thaw comes?  

 Regular portfolio rebalancing is a best practice even in good times, but especially important now.  How do you know if you are wasting resources on a non-performer?  How do you rank the alliances that represent the best long term strategic bets if you can no longer afford to support all of them?  

 Well don’t go wading in with the loppers until you reassessed your alliance strategy.  In the best of worlds, you do this in concert with your corporate strategy to be sure that you align and that you appropriately invest in partnering.  Once you’ve identified which product lines are the most recession resilient, where the shifts in buyer behavior will occur and which customer problems cannot wait for an economic upturn, then you can align your alliance strategy accordingly. And consequently you will have better understanding what your portfolio should look like. 

 This is also a great opportunity to reopen a strategic discussion with your partners. How are they adapting to the economic situation?  Do they have insight into opportunities you may want to partner on?

 Most organizations have a few ‘zombie’ alliances, those alliances that you keep around because they’ve been a partner for years but no one can really articulate why the alliance continues to be strategic or whether the performance level makes the cut.  Take a hard look at these.  It may be time to put these to rest. On the other hand, if the working relationships are sound, these alliances are potential transformation targets. Rejuvenate them with a new strategic direction.  Given that it can take a new alliance 12-18 months to build the operational linkages and relationships required to deliver performance, these alliances could represent a significant advantage in time to results.  They may be a vehicle that just needs a destination.

 Also rethink what performance metrics will have the most impact on helping you manage through the next few quarters or years.  Don’t rely solely on revenue history. Remember buying behavior will change.  Past performance doesn’t guarantee future results.

 A cross portfolio evaluation will enable you to stack rank alliance performance against strategic importance so that you make clear and informed decisions given the changed dynamics of today’s economy.