The Concept Of Value Alliance

Any organization seeking to increase the efficiency of its problem-solving efforts needs to understand the foundational concept of a value alliance. A value alliance is a group of participants with aligned interests pursuing an outcome with value for each of them. It is a formally organized entity following a process that has been deliberately designed to achieve a collective advantage. In such an alliance, the pursuit of value is the purpose, and alliance is the platform. Collaboration is the means.

While value alliances can be formed in pursuit of joint opportunity, they most often coalesce in response to a complex but common problem. Once groups get past the initial challenge of dealing with the tough issues, they begin to realize that they’re not just eliminating a negative; they’re also capitalizing on a positive. In collaborative terms, this simply means that when organizations come together to solve a complex problem, they may well discover that it is an opportunity in disguise.

It turns out that even bitter competitors can work together and achieve a goal that benefits all participants. Five key traits exist in every value alliance. Collaborative efforts often lack one or more of these traits, and their absence hampers the group’s effectiveness from its inception. Therefore, before embarking on any formal collaboration, make sure these traits are in place:

• Multiple interests. While multiple interests can create tension in a value alliance, they also produce creative conflict along with a range of resources and perspectives.
• Self interest. Self-interest is what drives participants to work long and hard and, with multiple parties, to come up with solutions.
• An incremental surrender of independence. From a psychological perspective, a shift from independence to mutual dependence is necessary, or participants will engage in power politics that will destroy the alliance.
• A free-standing governance process. Executives operate with no strings attached (to their other companies). The executive committee makes decisions on its own and not in consultation with the participants’ other employers.
• Value that continues. It doesn’t matter whether the value alliance is temporary or permanent. Its benefits are ongoing. If it solves one problem, the value of that solution continues long after the value alliance dissolves. And permanent value alliances provide a series of solutions year after year.

The Value of a Value Alliance Today

Since the 1990s, the world has experienced a confluence of new economic forces. In this environment, people and organizations no longer have the luxury of inefficiency.No one can afford to operate slowly or at a financial disadvantage globally. With these new financial parameters efficiency has become a matter of survival.

The problems facing organizations today have become so complex that it’s unrealistic to expect any single company –– even one as large and dynamic as General Electric, WalMart or IBM –– to solve them on its own. When affected parties collaboratively gang up on complex problems, value alliances produce superior results for at least four reasons:

• Multiple perspectives provide a more complete picture of a problem, creating more options, synergies and solutions.
• Trust produces efficiency.
• Shared investment and reduced litigation help limit financial risk.
• Speed improves when agreed-upon standards reduce friction.