The prior posts concerning Strategic Alliances highlight their major advantages and challenges. As John Musser points out the Strategic Alliance is by its very nature a potential competitive disadvantage since both business typically operate in the market and are forced to share confidential information or relationships. While most information sharing can be adequately protected with agreements, typically the most troublesome information sharing concerns customers. In particular, the “elephant in the room” of Strategic Alliances is who owns the business relationship with the customer now and in the future. Succinctly put, who will benefit from future revenue and profit flow? Since the objective for many Strategic Alliances is to acquire customers that both or an individual business would not be able to acquire without it, this question of customer ownership is tricky. The following are some practical suggestions for addressing this challenge:
• Design the Strategic Alliance so that customer ownership is only paramount to one firm
• Limit the customer ownership to a person or function as opposed to an entire company
• Assign ownership to one partner and share revenue and profits at a level that declines over time
• Recognize the imperfection of a Strategic Alliance and agree up fron the openly compete for the customer after a defined period of time.
Regardless of how you address customer ownership establish the “rules of the road” from day 1. Failure to come to grips with the “elephant in the room” will guarantee it is only a matter of time before mistrust and dissension creeps into the Strategic Alliance and destroys it.
Tobey Choate, Managing Partner
