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You Are Only Going to Be As Good As Your Business Allies

Mar 11, 2008
Organizations provide many reasons why they prefer to rely on their own people. These concerns include:

-The frequent rate of failure among joint ventures

-The difficulty of getting a high priority for resources needed from allies

-The time spent working with allies

-The effort it takes to attract allies, often unsuccessfully

-Disagreements with allies over future directions

-Allies' slowness to respond

-Inexperience in obtaining benefits this way.

These are all, in fact, legitimate concerns that must be dealt with successfully before allies can be usefully added as a critically effective, on-going resource for adapting to irresistible forces. For many people, the required perceptual change is to adopt a belief that whichever enterprise has the most and most effective allies will win.

Time to attract and develop allies must be a high priority for the operation, even before irresistible forces arrive and shift. Becoming very effective in this area is a required core competency for the present and the future.

In some industries, this approach can be extended to turning even competitors into unwilling allies. Consider Microsoft, the company that sells more software than anyone else in the world.

During the antitrust suit against Microsoft that began in the United States in 1998, a great deal of attention was focused on the company and its historical practices. A wide split occurred in public opinion during this time.

If you read the newspaper accounts about how people reacted to the case being brought, most people were pro or con based on their view of the company's history. You found that younger people credited Microsoft with every innovation that has occurred in software from word processing, to spread sheets, to communications through the Internet. These younger people saw the suit as threatening all technical progress in computer software and the Internet.

Older people pointed out that Microsoft's innovations were almost always based on the work of others, which the company either purchased inexpensively (such as the basis for DOS), or emulated quickly (the Windows version of what Xerox and Apple had earlier developed). Older people often favored the suit against Microsoft as a way to expand competition by providing more incentive to innovate in the absence of the Microsoft giant.

Prior to 1998, Microsoft sought to maintain relations with all of the companies in the industry so that its interests would be served, even when those relations were not always friendly in the early stages. Competitors had little choice but to go along with seeming hard-ball tactics, since their software would seldom run for customers without being consistent with the ubiquitous Windows operating system.

This approach meant that Microsoft simultaneously competed and cooperated with a large number of companies from Apple to Netscape. The catch phrase for this effort at Microsoft could have been: "How can everyone help us?"

This help came in the following forms:

(1) expanding the universe of innovative software that could work with Windows, making it ever more attractive to use Windows

(2) providing a broad base of smaller companies that could provide prototypes of new software "look and feel" features that Microsoft could improve on and incorporate into its own competing products

(3) Getting feedback on its own new products from large numbers of top software developers before they were launched so that the new Microsoft products would work better and be more appealing

(4) Creating new bundles of software features that were not present in any single competitors' programs, presenting important convenience advantages for customers, and

(5) Watching to see which competitors can establish large new markets before committing resources to develop similar products, such as happened with Netscape and Web browsers according to the trial judge in the case.

Microsoft's approach of drawing on both contacts with allies and carefully monitoring competitors to enhance the company's effectiveness in product development worked very well for that enterprise. Relying solely on its own innovations and resources, the company would have been far less successful.

Your industry may not allow you to co-opt competitors and allies in the same way. A more traditional approach to creating allies was used for decades by Corning.

Having chosen a strategy of concentrating on glass and glass-based technologies, the company found itself with skills that it could not fully exploit by itself in many end-use applications and other geographical markets. So the company joined with dozens of partners around the world to develop technologies, products, and markets. The result was that Corning grew to be many times the size in sales and profits it would have been otherwise.
About the Author
Donald Mitchell is an author of seven books including Adventures of an Optimist, The 2,000 Percent Squared Solution, The 2,000 Percent Solution, The 2,000 Percent Solution Workbook, The Irresistible Growth Enterprise, and The Ultimate Competitive Advantage. Read about creating breakthroughs through 2,000 percent solutions and receive tips by e-mail by registering for free at

http://www.2000percentsolution.com .
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