Metrics to successfully manage alliances

Abstract

Purpose

To show how the key to successfully managing alliances is developing and implementing alliance metrics.

Design/methodology/approach

The case of “Acme Manufacturing” (a composite of several firms) is used to illustrate the theory and reasoning behind the creation and tracking of alliance metrics appropriate to the life cycle of the partnership. These ideas are then applied to the ongoing Avnet/HP alliance.

Findings

Understanding and applying unique metrics at each stage allows management to anticipate alliance challenges and increase flexibility and adaptability when faced with changing economic and market conditions. Across the life cycle stages the partners must learn to monitor two types of measurements – development metrics, commonly employed in the start‐up and high growth stages, and implementation metrics, engaged throughout the professional, mature, decline, and sustain stages of the life cycle.

Research limitations/implications

This is a case study produced by a consultant specializing in alliance management. It has been peer reviewed but has not been subjected to independent audit.

Practical implications

Proactively managing alliances helps partners ensure value extraction, financial and non‐financial. Development metrics and implementation metrics can help alliance stakeholders understand and plan for the stages of the alliance life cycle while considering their knowledge transfer.

Originality/value

As the cases of Acme Manufacturing and Avnet/HP show, an understanding of alliance life cycles, cultures, and metrics can lead to successful planning, launching, and maintenance of a company's alliances.

Citation

Segil, L. (2005), "Metrics to successfully manage alliances", Strategy & Leadership, Vol. 33 No. 5, pp. 46-52. https://doi.org/10.1108/10878570510616889