Being an alliance manager is one of the most strategic and essential jobs in any organization today. It must be acknowledged that the profession is at a delicate point in its development—what we’ve coined ‘the crossroads’. Best practices aren’t sufficient to sustain a profession. An acknowledged alliance management discipline—practiced in organizations, taught in business schools, and respected as a career choice—is essential. It is up to those of us who are practicing it, teaching it, and developing it to ensure that it is recognized as such and flourishes.

Alliances and other forms of collaboration are an integral component of strategy. In some companies, they account for more than 50% of revenues and new products. Entire business processes are being entrusted to partners. As a result, it has never been more important for an organization to manage these relationships well. The costs of not doing so, which can include arbitration and litigation, stalled development efforts and lost time to market, as well as an inability to compete for desirable assets, are simply too great to ignore.

Alliance management began as the ad hoc efforts of individual managers and evolved into a set of ‘best practices’ in response to the historical failure of as many as 70% of alliances; a statistic that slightly exceeds the historical failure rate of new business start-ups. We wonder how many executives are aware of that fact as they embrace alliances as a strategic tool for the first time. Probably very few, as evidenced by the current mismatch of trained (and certified) alliance managers, along with the lack of a systematic approach to alliance management compared with the burgeoning numbers of alliances.

Until one experiences the challenges of doing business through an alliance, it seems no more complicated nor requires any special skills beyond that which all good managers possess. At one level that is true, but the challenge in an alliance or other collaborative arrangement is that the work of the collaboration—building and marketing the product, conducting research, and other important activities plus the collaboration itself—how the parties divide work, communicate with one another, make decisions, are accountable, and share resources, must be managed.

Alliances are extremely beneficial and can be a smart approach to doing complex, resource-intensive work. However, the added complexity and thus management risk they carry cannot be ignored nor can it be assumed that good managers will intuitively know what to do. Many successful business executives have failed when they tried their hand at an entrepreneurial venture. Likewise, many successful companies have failed at alliances.

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