It is important to keep an open mind regarding the

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It is important to keep an open mind regarding the struc- ture of the deal until the alliance strategy has been developed. A joint venture is not always the best route, nor is majority ownership. Preconceived notions about the deal structure can bias the strategy, including conversations with the potential partner. Ideally, the strategy dictates the optimal structure. Negotiation is also an aspect that requires significant atten- tion. Some best-practice companies rehearse their negotia- tions before meeting the partner. It is critical to be clear about your deal-breakers, and the “floor” and “ceiling” of your nego- tiating points. A negotiating strategy is critical, and developing one must begin at the alliance-strategy stage. A key point to remember is that negotiations with a potential partner begin long before you first sit down at the table. It begins the first time you meet the partner. Every interaction reveals informa- tion that is consciously and subconsciously stored for future reference.
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IVEY BUSINESS JOURNAL • SEPTEMBER/OCTOBER 2001 50 Every alliance agreement should include an exit strategy. This does not imply a pessimistic view of the relationship, but rather recognizes that all alliances have a natural life. The average lifespan of an alliance is seven years. It may be neces- sary to recognize that an alliance is impermanent in order to maximize its useful life. Finally, at this point, a solid view of, and agreement on, alliance governance is important. This work is begun at the alliance strategy stage and needs to be negotiated before sign- ing the definitive agreement. 4. Managing the alliance Once the ink is dry, the hard work begins. Making the rela- tionship work on an ongoing basis is a challenge. In a well- structured alliance, an implementation plan is developed before the deal is signed. A full launch strategy needs to have been jointly developed before the deal is announced. To hit the ground running, an implementation plan with specific action plans, and the resources assigned to the alliance, must be known. Ideally, some members of the alliance team would have been involved from the very first stage. Conflict in any alliance is inevitable. It is not the fact that it occurs that is a problem, but rather how it is dealt with and resolved. A conflict-management process is an important ele- ment of alliance management. This is another stage where the alliance can be derailed. As previously noted, the lack of strategic alignment is a key cause of failure. This is not only the case at the outset but through- out the life of the alliance. Periodic checks are critical. If a shift in a partner’s strategic direction is taking place, there is a risk that the alliance may no longer be a strategic priority In the case where an alliance partner has sold its interest to another organization, it will be necessary to ensure that the new part- ner has the same strategic vision and interest in the alliance.
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