Relationships Part 3: Strategic Alliances Require EQ

It’s the middle of the night, and you’re wide awake. You’ve had an inspiration about a gap in the market that needs filling. You know just how to do it!

Sleep is no longer an option, but that’s OK. You sketch out the execution steps. You realize that your company will need help. Another firm will have to supply some of the pieces that are outside your firm’s expertise. Fortunately, you know just who to call. With effort, you wait until morning to do so.

When you get your potential ally on the line, you lay out the idea. He’s very interested. When you meet to begin serious discussion, all lights are green. You both see the possibilities and benefits. You begin to count profits.

But beware - in spite of the excitement that alliances such as this one generate, the sad truth is that most of them fail. Why? A recent three year study of 150 alliances was done by Vantage Partners, a firm spun off from the Harvard Negotiation Project to help business alliances succeed. They found that failure is most often due, not to any lack of business acumen on the part of the partners, but to a lack of relationship skills, a major component of emotional intelligence (EQ). Their research indicates that strategic partnerships require a strong dose of EQ to succeed. Whether or not your alliance succeeds will depend on how much attention you pay to this essential ingredient in making your partnership.

Creating solid relationship skills for the partnership does not involve “touchy/feely” mush. It does involve creating the capabilities to be able to talk about difficult issues in a businesslike way. Most people need structure and training to do that. Successful alliances today most often begin with a “Relationship Launch”, a systematic approach that lays the groundwork for a strong partnership. The launch is designed to provide necessary information, training, and processes to all participants. The shared experiences help build relationships among all the people who will have to make the partnership work. (Members of the Construction Industry who have done partnering will recognize this as the “Charter Process.”)

Information: The leaders and negotiators for each company have a vision for the partnership. In negotiating the broad outlines of the partnership, each set of negotiators will have gained considerable knowledge about the other’s company. This vision and acquired company knowledge need to be shared in detail with each company’s implementors, i.e., the people who will have to make the relationship work. The more the implementors know about the vision, the better they can use their judgment in implementation to achieve that vision. The more the implementors know about the other company - its culture, its ways of solving problems, and why this partnership is good for that company - the better prepared they will be to work with the people from that company.

Training: Joint training in EQ-based skills will lay the foundation for constructing the infrastructure, i.e., creating trust, solving problems, communicating, and so forth. Some important skills to include are:

• assertiveness - the ability to clearly express what the person and the company want and need in ways that are not destructive or offensive. Too many people confuse assertiveness with aggressiveness.

• empathy - the ability to read other people, understand their situation, and have it matter. This skill is essential for problem solving, and it forms the basis for taking a “what is best for the venture” perspective, as opposed to staking out territory and defending turf.

• conflict management - the ability to approach conflict without excessive anger or anxiety and to know how to create win/win outcomes. There will be conflicts in every partnership. Shared training will give implementors common experiences to call on in crafting good responses.

• flexibility - the ability to adjust one’s emotions, thoughts, and behavior to changing situations and conditions. Alliances require that people be adaptable to ways of looking at events and problems that are outside their own company culture.

• problem solving - the ability to identify and define problems as well as to generate and implement good solutions.

Processes: A structured approach to sharing information and training prepares participants to craft agreements about the processes of how the work will be done. It gives them the tools they need to effectively strive to develop trust, communication, and problem solving mechanisms. The job during this third step of the Relationship Launch is to create a set of written documents and agreements that outline the details of how things will actually work. For example, how will duties be assigned? How will conflicts be handled? How will changes in agreements be made?

These agreements will serve to guide participants during the inevitable confusion that will arise in the day to day implementation of the alliance. Therefore, it will be important to define terms carefully. For example, nearly every alliance agreement mentions trust. Yet even this simple word can create potential misunderstandings if you don’t spell out the details. If you say you will trust each other, does that mean you will take each other’s words for things or that you will have full disclosure of related financial information, i.e., trust each other with your internal data? Either way can be fine as long as your expectations align. You will only align expectations by discussing the issues completely.

In summary, EQ will play a pivotal part in the success or failure of your strategic alliance. Invest the necessary resources of time, energy, and money to guarantee a successful Relationship Launch. Finally, it helps for everyone involved in a successful partnership to say: “It’s the relationship, stupid!” to themselves as a daily mantra. When relationships get sufficient care and feeding, almost anything is possible.

Dana C. Ackley, Ph.D., is founder and CEO of EQ Leader, Inc., which helps companies perform at their peak through emotional intelligence. He can be reached at (540) 774-1927, or by e-mail at dana.ackley@eqleader.net.