5 Reasons Strategic Alliances Fail

Strategic alliances are not easy to execute. A successful strategic alliance requires thoughtful decision-making, purposeful planning, and sincere collaboration. At the same time, these relationships can be very fruitful with the right match and proper execution. Plus, as I covered in this earlier post, not all strategic partnerships need to be a huge undertaking in order to benefit both parties. You do need to be careful to avoid some common pitfalls, and here are five common missteps.

#1 Lack of a Shared Vision
Inherent to a partnership is a shared goal or commitment that will benefit both parties. Making sure the partners start on the same page—and stay there—takes upfront and honest communication (and lots of it) in the partnership’s infancy and throughout. All too often there is a disconnect in expectations or understanding that will undercut the benefits to both parties and eventually undermine the alliance.

#2 Over- or Under-Investing
We invest in things when it’s “worth it” to us, and when we have the resources to do so. A person won’t exercise four times a week unless the benefits of feeling and looking healthy outweigh the effort. Even if you just know a certain stock is going to go up, you can’t buy it if you don’t have the funds.

As I said earlier, strategic alliances can be formed at different levels of collaboration, and the investment of time and resources has to match the potential benefit.

Forbes contributor Kimberly A. Whitler summarizes it well in this example:

“If the IBM-Apple relationship is so important that it generates a press release and there is a belief that the financial community sees tremendous value, then the expectation would be that both firms dedicate appropriate resources, that senior leaders manage the relationship, and that somebody near the top is providing critical oversight.”

Both partners need to consider what they are willing to invest and then make sure those resources are available. If it’s a good investment but the resources aren’t there, perhaps the partnership simply needs to be delayed. If it’s going to take more investment than makes sense strategically, it’s not a good fit.

#3 Poor Governance
Let’s say you pick a good partner and properly evaluate the needed investment—now you need to execute! Set clear expectations, meet as much as you need to, track your progress. If you’re investing resources into this alliance, make sure to also invest in managing the process. This older post gives four guidelines for successful governance.

#4 Lack of Trust
When you partner with another company, trust needs to be established and practiced at an appropriate level for the collaboration—and it needs to be balanced in that both companies share as needed. If you’ve established clear guidelines for your partnership, these should include what information is necessary to share and how it will be shared. Once you have a clear plan, stick to it.

What you don’t want is lack of transparency. Be clear about what you plan to share, and then share it.

#5 Lack of Adaptability
Circumstances change and sometimes your partnership needs to change too. A common example of this is when partners become competitors.

Let’s look at Cisco, a company that has endeavored many partnerships in its lifetime(3). Cisco’s partnerships with Motorola and Ericsson both fell apart when competition got too high after acquisitions. When a partnership is no longer advantageous enough to warrant any disadvantages, it’s time to divest. It’s best to realize these types of changes as quickly as possible and be willing to abandon ship.

On the other hand, Cisco’s partnership with Microsoft was able to withstand a rising competition between the two partners in providing data centers. The partners adapted to a new situation by limiting the scope of their alliance.

Overall, the most important parts of a strategic partnership (or any partnership for that matter!) are honesty and communication. Treat your partner like a good friend that deserves your respect and investment and you’re on your way to a successful collaboration.


  1. http://www.forbes.com/sites/kimberlywhitler/2014/10/24/why-strategic-alliances-fail-new-cmo-council-report/2/
  2. https://robynhenderson101.wordpress.com/2011/06/05/5-reasons-why-strategic-alliances-can-sometimes-fail/
  3. http://www.businessweek.com/innovate/next/archives/2009/12/ciscos_failures_in_corporate_alliances.html

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