Partner Alliances: What Are They and How to Leverage Them
“A partner alliance is an agreement between two businesses to share resources, information, and strategy to achieve a shared marketplace goal.”
Part⋅ner (noun):Either of a pair of businesses engaged together in the same activity.Al⋅li⋅ance (noun):A partnership or association formed for mutual benefit“A partner alliance is an agreement between two businesses to share resources, information, and strategy to achieve a shared marketplace goal.”
Our Common Language
Partnerships can be complicated, and the first problem is definitions. If you go online and type in “partner alliance”, you’re going to get a lot of conflicting—and frankly, confusing—information and terminology. You’ll see things like “partner alliances”, “partnerships”, “alliances”, and probably a few more besides that will make your head spin. Let’s clear this up right away: the difference between all those terms is…nothing. They’re all ways of describing two businesses that decide they need to work together for their mutual benefit. There are many different ways and reasons businesses do this, and all of them, taken collectively, are generally referred to by the umbrella term “partnerships”. Say that again. “Partnerships”. That’s what we’re here to talk about.
Partner Alliances Today
Whatever you want to call them, partner alliances are one of the most important business strategies to understand in the modern ecosystem. Gone are the days when a spunky startup can go it alone against the big dogs, and even the biggest players have to partner to create the value required to compete in the marketplace. It’s why 82% of businesses were gunning to form partnerships in 2022, it’s why nearly 60% rely on partnerships to find new customers.Oh, and it’s why you have a job. Exactly. Partnerships matter. They’re confoundingly complex and instinctually intuitive, and it’s why partner alliances are quite simply the most exciting endeavor in business today. Let’s get to it.
The Purpose of Partners: Why Ally?
“The best partnership creates maximum value for your stakeholders.” —Scott Pollack, partnerships educatorBusinesses partner because they have identified value in the marketplace they can’t unlock on their own. To leverage it, they need a partner who possesses what they lack, shares core values, AND…will benefit from the relationship.Not “or”. In partnerships, it’s all-or-nothing when it comes to making it fly, and that’s the ethic of a true partnerships leader. Let’s take a look at two examples. One of these succeeded because it met all three criteria. The other? Well, you’ll see.
Shell and LEGO
“Strive not to be a success, but rather of value.” —Albert Einstein, notable violin enthusiastShell is a petrochemical company. Now, no hurt feelings here, but that means they need to constantly generate buy-in from new generations of consumers who are increasingly souring on burning ancient dinosaurs for fuel. And what’s a great way to do that? Partner with a toy company to make their brand as familiar and beloved as the Tooth Fairy. Just relax, OK? This ends badly. LEGO, on the other hand, is all about giving kids things to play with, so the partnership made perfect sense on paper. Kids love big trucks. We love kids. Why not Shell? Actually, that’s a critical question. It’s about value, people. Value. Remember that. If you want to be a partnerships leader for your company, you need to do three things every time:
- Find out what your stakeholders value
- Find a partner who shares those values and can benefit from a partnership
- Align all the stakeholders behind that value and execute
3 was a ground rule double, 2 was a bunt single, but 1? Ouch. They partnered to make LEGO tanker trucks with Shell logos on them. Turns out that Shell valued selling gas, but LEGO just wanted to make families and kids feel warm and fuzzy building shit. And even though LEGO didn’t quite understand what its stakeholders were really all about, they certainly got the message when parents and environmental groups started raising holy hell about inviting 3rd graders to literally construct another four decades of fossil fuel ideology.That’s why this partnership imploded. They found a willing partner and they aligned everyone behind the partnership, but they failed to identify shared values. And if you don’t have that? Kaboom.
Nokia and Microsoft
“Marriage is a risk. I think it’s a great and glorious risk, as long as you embark on the adventure in the same spirit.” —Cate Blanchett, the world’s most attractive woman everNow this one is why the hard work of doing it right makes partnerships nuclear fusion in the marketplace. Back in 2010 Microsoft was looking to take a huge step into the smartphone iOS game with Android, but there was one problem: they had no clue how to make a phone. Like, none. DOA. It was clear they needed to find a partner, and they started to crystalize around Nokia. Nokia was definitely a player in the phone market, but they were bleeding market share by the 2010s. The problem was simple. Their hardware was solid, but their in-house Symbian platform needed an update and it was becoming a tech challenge too far to compete with the likes of Android……who just coincidentally—magically—cosmically—happened to need a partnership. Or a partner alliance. Or an alliance. Or whatever, but let’s recap those values because that’s what matters here. You talk to stakeholders, find a partner who shares values, align and execute. The idea was simple: Nokia makes the phones, and Microsoft supplies the OS. What do you think?Microsoft: Ya.Nokio: Omg yes, plz, thx, U can pick me up @8. Giggle.It was a bold move, but the partnership was utter perfection. Both companies went all-in on the alliance, stakeholders were invigilated, Microsoft dropped some cash to balance the deal, and today? That partnership—because it was based on stakeholder value, shared goals, and proper alignment—resulted in a fundamental reshaping of the entire smartphone industry. Its worth?Billions.When you stick to the core principles of partner alliances, remain neutral, and let your stakeholders define the value you’re pursuing, you’re going to find the right partners and align for the right reasons. And when you do that as a partnerships leader, you can leverage anything in the marketplace.
Firneo: Telling You Everything You Need To Know
So nobody taught you this stuff? No problem. That’s what Firneo is here for. Our experts have been teaching partnership leaders the ins and outs of partner alliances for over a decade, and our alumni are out there breaking the mold on the biggest stages with the biggest players you’re going to find in the partnerships industry today. Get involved. Click here for more information on how you can join our next cohort and get accelerated on your partnership journey.
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An Interview with Partnerships Expert Elisabeth Root: Making Space for Fierce Self-Awareness in Partnerships
Elisabeth Root has worked in Big Tech partnerships for over a decade. Now, she’s starting a Partnerships Consulting business - and exploring the art of creating real space for self awareness, experimentation, and innovation.