How Alliances Can Drive Results
To some of those inside associations and corporations, the notion of collaborating with competitors or other similar organizations may seem counterintuitive. In many cases, however, strategic alliances can be essential to solving problems and moving organizations forward.
Few people know about the value of alliances in the technology sector better than Deepak Kamlani, president of Inventures, which is based in San Ramon, Calif. Inventures builds successful partnerships that drive innovation, remove barriers to growth and create new or larger markets. It is a strategy that works for corporations and nonprofit organizations.
Create Larger Markets
Kamlani and his team work as incubators and facilitators, bringing organizations together around the central idea of eliminating a pain point or obstacle to create new opportunities for all parties involved. "The companies recognize that not one of them can do it by themselves," Kamlani said. "That's the trigger. They realize they have to collaborate with each other to create this bigger market.
“One of our catchphrases is, ‘It takes a village,’” Kamlani added.
A prime example is the ZigBee Alliance, a nonprofit technology association developed by Inventures. It formed around the idea of producing wireless sensor networks to enable people to manage their energy consumption more efficiently through smart meters, wireless thermostats and wireless lightbulbs, and to manage home controls, lighting, building automation and other elements.
It would not be possible to bring these products to market without the collaboration of multiple stakeholders, Kamlani explained. In the case of lighting, it required the lightbulb from Phillips, the thermostat from Honeywell, the remote control from Sony, the semiconductor from Intel and so on. "Each one of these companies can solve a part of the problem, but no one company can solve that whole value chain," he says. "That's why companies come together."
Alliances are also created around the marketing of standards. A highly successful example is the Secure Digital (SD) Card Association. Inventures helped the leading manufacturers of SD memory cards manage the licensing and develop the brand for that standard. The SD Card Association now has more than 1,000 members around the world.
"You can have a market that you control 100 percent, but if you have a market that is based on a commonly developed technology, it might have a value 10 times the size of the one that you had by yourself," Kamlani stated. "And your share of that new, larger market will likely be bigger than 100 percent of the smaller market you owned." That, in a nutshell, is the value proposition.
Associations and Alliances
When it comes to developing alliances between associations, one of the biggest challenges tends to be getting over that initial hurdle of collaborating with competitors or stakeholders that share interests but are in different segments of the value chain, Kamlani said. A successful alliance requires stakeholders to work together not just for their own good, but for the greater good—even if they compete in the same space for the same customers. In this way, they all are able to create greater value for larger numbers of members.
It is also critical to have the proper governance structure in place. When forming alliances, Inventures suggests establishing a board with an equal amount of representation so no one partner has more influence than another. The board should appoint a committee of members from each of the partners to develop solutions and report back to the board, which has final approval authority. This process is similar to how most nonprofit associations operate, Kamlani noted.
When setting up an alliance, Kamlani also recommends the following:
Alliances in the nonprofit area can serve many different purposes. One might be developed around establishing an industry standard for something like a training program, Kamlani said. Competing associations could pool their resources to launch a certification program to train members in a specific skill. Broader representation could bring in more people and make the designation more meaningful to people, thus generating more interest.
- Be clear about what happens to the intellectual property an organization might contribute.
- Ensure no one who wants to belong is prohibited from doing so, which can be necessary to stay on the right side of anti-trust and anti-competitive laws and regulations.
- Chose a funding approach that assures you can deliver your vision and mission.
- Have a fair, transparent and uniform process in place to get things done.
Alliances built around meetings and events can be an effective way to extend the reach of an association. Partnering with an international association, for example, is a good way to attract more attendees to each partner’s events. Associations can also find it beneficial to co-sponsor a meeting with a competitor to create one large industry event and therefore address the problem of stagnant attendance.
Associations can also collaborate on issues related to advocacy. In recent years, various meetings industry organizations have banded together to launch an advocacy campaign called “Meetings Mean Business.” The group formed to combat the negative press that the meetings industry as a whole was getting during the economic downturn of the late 2000s, when federal lawmakers were blasting meetings as boondoggles and corporations were slashing budgets. The organizations coalesced to produce research and promote meetings as vehicles that drive business ROI, innovation and economic impact.
"The context is always, 'Will we succeed more if we form an alliance?'" Kamlani asked. "If the answer is yes, then you move forward. If the answer is no, then you don't.”
APRIL 2014 EDITION
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