Article 2: The types of outcome measures effective for measuring strategic alliances
In article 1 of our beginner’s guide series, we examined the unique purposes for strategic alliances.
With an understanding as to the reasons why organizations create strategic alliances, we can now examine ways to measure their success and effectiveness once they are active.
There are many ways to think about alliance management analytics. Figure 1 offers a simple, three-part framework that distinguishes between outcome, activity and alignment measures.
Figure 1: Three-part alliance management analytics framework
Activity measures look at the actions undertaken by the alliance manager. Examples include the number of issues that have been resolved, number of escalations avoided, and goals achieved within plan, budget and time.
Alignment measures highlight the success of the partnership through the relationship among the two or more organizations involved in the alliance. Examples include the number of alliance health checks completed, the number of opportunities identified, and the value of opportunities pursued (all from within the existing partnership).
Finally, outcome measures identify whether your overall objectives were achieved. They will always be unique to each partnership: this is because each partnership seeks to achieve different strategic, operational and financial aims. These tend to be owned by the business unit to which the alliance is attached. But activity and alignment measures are not unique to each alliance – these are common across the entire alliance portfolio, or at least common across different categories, tiers or groups of partnerships. And in the best organizations these are owned by the alliance team.
No matter who owns each type of measure, the alliance manager is responsible for analyzing all alliance-related measures on a regular basis and will be expected to report these updates to stakeholders internally and across all partner organizations.
Depending on the organization, the alliance manager will be communicating to at least four different audiences internally (see Figure 2).
Figure 2: Alliance management stakeholders
Each audience will have different reporting needs along the lines of at least four levels of analysis (see Figure 3).
Figure 3: Stakeholder needs - 4 levels of analysis
These levels of analysis don’t yet recognize that different stakeholder groups have different information needs from each of these levels.
When planning what you will measure, it may be helpful to think about the types of information these groups will need:
- Alliance managers: what analytics do they need to manage the individual alliances for which they are responsible?
- Governance committee members: what analytics do they need in order to take decisions for which they are responsible, and what analytics do they need about the partners and all initiatives that relate to a partner?
- Alliance management leadership: what information do they need to resource and manage their alliance management function or team?
- Senior management and other business stakeholders: what information do they need about the portfolio they are responsible for, key risks and their financial impact, upcoming milestones and the pipeline of new partnering opportunities?
The nature of your alliances and the needs and expectations of your organization – and in the end the individual stakeholders – will inform what audience wants what type of measure, at what level of analysis, and at what level of depth.
Here at allianceboard, we believe it is imperative for alliance professionals to begin owning their alliance data – in the same way that R&D, human resources, pricing, and sales teams own their data.
Talk to us about how to make this happen in your organization; contact@allianceboard.com