The art of strategic alliances

In the current conflict situation that Europe is going through, the concepts of alliance, strategies and tactics have returned to the military domain, as they are presented in the book “The Art of War” written by Sun Tzu in the 5th century BC Both the book as the concepts referred to in it are frequently used in the area of management and leadership due to their importance in the relationships between organizations, which go far beyond conflicts between countries. There is, however, one significant difference: while war is a zero-sum game, where the victory of one is the defeat of the other, other human activities are games in which all partners can win.

A good example of mutually beneficial collaborations are innovation projects: not only do the participating organizations win, but also the future customers of the resulting new products. It is, therefore, legitimate to ask the reason for the difficulties in establishing collaborations between the organizations best positioned to produce innovation: universities and companies. This was the question that the Rector of the Universitat Politècnica de Catalunya (Barcelona Tech, UPC) asked when he invited me to go to Barcelona last week to present to the university’s directors the structured model of collaboration with industry that we have at Técnico.

Like countries, organizations also have their own cultures that create barriers to collaboration among themselves. There are barriers related to the objectives of the organizations, for example in the need for companies to obtain more immediate results while universities seek a longer-term impact with their research activities. Even when the orientation-related barriers are overcome, transactional barriers arise in the contractualization of this collaboration. It is difficult to agree on the resources that the parties are willing to commit and on the sharing of eventual outcomes, namely intellectual property rights. Contracting often follows the supplier-client model, where the company contracts services to the university, in a model similar to that used with other companies. Transforming a collaboration opportunity into an innovation project is hard work on the part of the stakeholders, typically university and company employees linked to innovation. Once the project is finished, the process will have to be repeated again.

It is in the resolution of these difficulties that we can use the advice of Sun Tzu, in the form of what is currently called in the area of management as a strategic alliance. It is an agreement between organizations that decide to share resources to achieve their strategic objectives. Strategic alliances can involve companies in the same line of business (Star Alliance), companies with common customers (Disney and McDonald’s) or companies that partner to reduce costs, for example, in the development of a new product or in the approach of a new market. The book Cooperative Strategy (Child, 2019) systematizes the three perspectives in which the theories that support research on strategic alliances are grouped: economic, management and behavioural. These perspectives help in finding the areas where an alliance can produce mutual benefits: optimization and economy of scale, reduction of risks and uncertainty, access to resources and activities, greater credibility and reputation, access to customers, expansion of the product offering, internationalization, knowledge creation, etc.

In the case of collaboration between universities and companies, it is easy to find a set of common goals: the need for more and better talent, the advantage of contact between students and future employers, the speed in converting knowledge into new products, sharing information that helps the organizations strategic planning or the increase of the competitive advantage of their region. Strategic alliances are designed on common goals, which must have two characteristics: they must be long-term and cover several areas of collaboration. In the present case, the long term makes it possible to maintain the collaboration in the intervals between projects and the multidisciplinarity extends the collaboration beyond the area of innovation. For each domain in which there are mutual benefits, it is necessary to design the different activities that will be carried out during the term of the partnership agreement: sponsoring of teaching laboratories, mentoring of students by professionals, theses in a business environment, among others. It is easy to understand that such an extensive collaboration is only possible with the express will of the top managers of the company and the university, which makes both parties responsible for the success of the partnership.

Often, some of the collaboration activities may already exist as a result of tactical alliances, created as a result of specific needs of the university and the company. What I tried to show in Barcelona is the value of its coordination within the framework of a strategic alliance where the long-term goals of the university and the company are made clear. As Sun Tzu said, strategy without tactics is the longest road to victory, but tactics without strategy are the noise before defeat. Unfortunately, it seems that the times we live in are not favourable to the advice of Sun Tzu for whom the supreme excellence was victory without a fight.

Adapted from my article in i newspaper of March 1st, 2022

← Previous post