United we stand

Entrepreneur, April, 1998 by Heather Page

You need to keep the lines of communication open. McAfee, for instance, receives weekly sales reports from Macy's store managers and talks with senior management at Macy's headquarters each month to discuss important issues. The relationship must be developed to the point where both parties can be honest, regularly evaluate progress and offer recommendations for improvement. Moreover, when there are disagreements, resolve them as quickly as possible. Spekman says it's best to meet in neutral territory where both parties can speak openly and honestly. Then, focus on solutions rather than placing blame.

As is true of any good relationship, you can't measure an alliance's success by one incident or moment. The measure of any successful alliance is what you gain from the relationship over time.

Top Reasons Companies Form Alliances

Joint marketing: 54 percent

Joint selling or distribution: 42 percent

Joint production: 26 percent

Design collaboration: 23 percent

Technology licensing: 22 percent

Research and development: 19 percent

Outsourcing: 19 percent

SOURCE: COOPERS & LYBRAND LLP

TAMING THE BEAST

Large companies often make excellent alliance partners. Yet, for a small company, working with a large corporation can be tricky. The inherently contrary cultures of large and small businesses frequently lead to conflicts and misunderstandings, says Richard Hagberg, Ph.D., a corporate psychologist and president of Hagberg Consulting Group in Foster City, California. Following are the top five things you must know about the inner workings of a large company before entering into an alliance:

1. Office politics. Large companies are typically more political than small companies, says Hagberg. If you're forming an alliance, recognize there may be hidden agendas that you're not aware of. Similarly, keep in mind that employees, particularly those in upper management, may not be free to share information and express ideas for political reasons.

2. They mean business. Unlike your small business, an employee in a large company is one of many. That means you'll be working in less of a "family" atmosphere than you're probably accustomed to. Employees will want to spend less time on pleasant formalities and relationship building and more time focusing on the task at hand.

3. Conformity is key. In most corporate cultures, conformity rather than uniqueness is highly valued. Do your best to fit in - and don't take it personally if your relationship with alliance partners is strictly business. "You may feel as if you're dealing with an impersonal beast," Hagberg says.

4. Bureaucratic layers. Because of a large company's bureaucratic nature, it can be difficult to get things moving quickly. When forming an alliance, find out how decisions get made, with whom the power lies and, ultimately, the best strategy for getting things done.

5. Loss of control Big organizations have all kinds of procedures, systems and rules they probably want you to follow. You may feel like you've lost a bit of the freedom you had when running the show yourself - and you probably have.