Beyond the Chicken Dance: An Enlightened Approach to Building Better Business Alliances

By Charles H. Newman

SO YOU THINK YOU WANT AN ALLIANCE PARTNER?
To succeed in the business world today sometimes takes human, technical or financial resources outside the scope of your reach.
You may be trying to access new technology.
You may be trying to leverage your own technology or know-how.
You may be trying to enter a new market area or possibly going global.
You already may be in the early stages of forming an alliance or you may have been in an alliance for years. It doesnt matter what stage you are in now. This book will help you build, negotiate, plan and manage your alliance relationships in a way that will increase your chances of success over the long term.

• Language: English
• Publisher: Xlibris US
• Release date: Jul 7, 2009
• ISBN: 9781450002936

Charles H. Newman

From pool room to board room, Mr. Newman has more than 40 years experience refining the steps that bring people together to make business alliances work. After obtaining his Bachelor’s and Master’s degrees in Business from Babson College, he spent almost 30 years at Ford Motor Company. During his last 10 years at Ford, Mr. Newman successfully brought to fruition 46 licensing arrangements in twelve countries, nine joint ventures in four countries, six acquisitions and two divestitures. Later, while President & COO of the Strategic Alliances Consulting Group, Mr. Newman developed 3 specific planning processes which were implemented successfully at several automotive supplier operations in North America and Europe, as well as at a variety of small entrepreneurial business enterprises in the US.

Book preview

BEYOND THE CHICKEN DANCE

AN ENLIGHTENED APPROACH TO BUILDING BETTER BUSINESS ALLIANCES

CHARLES H. NEWMAN

Copyright © 2009 by CHARLES H. NEWMAN.

Library of Congress Control Number: 2009904563

ISBN: Hardcover 978-1-4415-3548-1

Softcover 978-1-4415-3547-4

Ebook 978-1-4500-0293-6

All rights reserved. No part of this book may be reproduced or transmitted

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without permission in writing from the copyright owner.

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I’ve read Newman’s book and was impressed with its directness and back to the basics of the deal approach. The examples are clear and to the point. The book provides a pathway to maintain focus and close the deal.

Frank Macher, CEO, Ceres Partners; former VP, Automotive Components Group, Ford Motor Company

Charlie combines four decades of business experience with a superb intellect, international knowledge of business and politics, a sharp wit, and the ability to take a complex problem and reduce it to simple and understandable terms, which he then puts into an achievable business plan executable by available resources. There’s no one better!

John Tobiczyk, former CEO, Conix Corporation

Newman opens our eyes with his view of international business processes. Going beyond the private sector, his insights apply aptly to the world of public sector leadership, and in many ways, to our family lives. Beyond the Chicken Dance provides pivotal insight for 21st Century leaders in a practical and often humorous, fast-paced style.

Michael J. Lannon, Superintendent of Schools, St. Lucie County, FL

Charlie Newman has written an unusual book. At one level, this is a book about alliances, how to forge them, structure them and manage them. This task he accomplishes with aplomb. His insights on processes ranging from negotiating alliances through managing alliances to learning from alliances are invaluable. At a second level, this is a book about management in general. Newman’s ideas on the need to know your business, distinguish between the core and the non-core, and continuously get your priorities right are as applicable to alliances as to managing any business. At a third level, this book is about life itself.

Recognizing that almost everything is negotiable, understanding what motivates others, and maintaining flexibility in the face of potential changes in circumstances are life lessons that anyone can benefit from. Newman’s book should benefit the novice manager as well as the veteran. The novice will learn interesting things. The veteran will learn how it all fits together.

Most business writers are either participants who want to tell a colorful story, or outside observers who want to construct a bloodless narrative. Charlie Newman is unique. He had been a participant who nevertheless maintains an outsider’s dispassionate eye.

The result is a book that is at once engaging and enjoyable, but at the same time is useful and workman like. What is more, Newman writes with wit and verve. His anecdotes are earthy and yet insightful. His humor is deceptive. Even as it makes you laugh, it underlines some valuable lessons. Many a reader would benefit from Newman’s way of imparting them.

Srinivasa Rangan, Professor, Babson College

Dedication

To my wife Arlene, without whose patience, support and love I never would have been able to complete this book.

Introduction

This book brings you real life experiences so you can avoid some of the mistakes others have made along the way. Its purpose is to give you a head start in building better business alliances based on other peoples’ experiences and to help you build and manage your alliance relationships in a way that will increase your chances of success for the long term. It is intended to provide you with guidelines based on my real world experiences, as well as those of other successful management people who together have more than 500 years of business experience. By reading this book, you should be able to avoid many of the pitfalls discovered by those who have gone before you—some the hard way.

In addition, this book will provide you with some of the tools to help you better understand the dynamics affecting your business and your business relationships. It also will enable you to focus on the key variables to help you better assess the probability of success before you ink the deal. To assist you in these endeavors, there are three key processes outlined—one each to help you better assess, develop and plan your business.

The main thing that I’ve taken away from each alliance is that there is one constant: change. No matter what the parties envision from the outset, things have a way of changing throughout the relationship—the people, the parties’ positioning relative to one another, the ownership, the market forces, the financial structure, the vision, government regulations, etc. The better prepared you are to deal with these changes, the better your chances for success.

Acknowledgements

The people who have contributed to this book are far too numerous to mention by name.

Nevertheless, credit has to be given to Ford Motor Company which had enough confidence to allow me to travel the world putting together a variety of business alliances. It would be unfair not to acknowledge everyone who sat patiently and enduringly at the table with me in various parts of the world while the discussions and negotiations took place finally resulting in the alliances that were formed.

Special thanks to my friend John Tobiczyk for providing the foundation of the business planning process, as well as helping me with all of its refinements.

Sadly, some alliances did not survive more than a few years, but they did serve a useful business purpose while they were in existence. Others survived much longer and served both parties well, despite the hurdles and the frustrations encountered along the way. The personal relationships and friendships formed as a result of these undertakings have survived longer than many of the business alliances themselves. From that standpoint, all of these efforts have value and can be considered successful.

To all of you who were involved, I thank you for your patience, your understanding, your good will and your efforts in supporting these undertakings and in helping them succeed. I realize that I was enlightened and enriched by each of you and for that I thank each and every one of you.

A lot of credit for this book should go to my wife Arlene, who has been my partner in everything for 37 years. She has spent countless weeks at home while I traveled the world developing alliances. I was away so often that she used to tell everyone that being married to him is like being single without the privilege of dating. She has had to suffer through the stories from each undertaking repeatedly as I reinforced the learnings. In addition, she has had to entertain people from all over the world as part of the personal aspect of all successful business alliances. She also has helped me develop the creative aspects of the book and has read every draft while I struggled to keep it simple and succinct.

To my editor and new friend Bob Unger, this book may never have been published without your guidance, support and encouragement. Throughout this effort you have been my guide and my friend for which I always will be grateful.

Chapter 1

Scrambled or Omelet?

(What Is an Alliance?)

A business alliance is a formal association of two or more business parties to further their common interests, presumably over the long term. As such, these alliances can take many forms with varying degrees of complexity and difficulty. While some of the negotiating guidelines in Chapter 4 may apply, this book does not focus on one of transactions like buying a cup of coffee.

In its simplest form, an alliance can be described as a buy/sell arrangement. On a more complex level, a long term relationship and alliance may result from an effort to co-develop or share technology, or even an agreement to enter into a technology licensing agreement. Even more complex are partnerships or joint ventures. This latter alliance achieves the ultimate level of complexity, particularly when the global aspect of business is introduced and especially if the parties to the alliance are from different countries and different cultures.

Unfortunately, there are too many examples of alliances formed between business entities that were predicated upon the premise that everyone else in the industry is doing it, so it must be the right course of action. Others have been formed based upon some whim of upper-level management with no real analysis of whether or not an alliance was necessary. In almost all cases where inadequate planning superseded the formation of the alliance, the likelihood of success is infinitesimal and the likelihood of failure is almost assured.

In contrast, when properly developed and formed, joint ventures represent an opportunity to leverage expertise from each party, thereby creating a more powerful and a more competitive entity than one based on an extension of a single party’s existing base. This becomes even more critical in today’s global business environment wherein the right alliance partner can provide local market knowledge, legal expertise, knowledge of local business practices, customs, etc.

Before attempting to form an alliance, you need to make sure that you are familiar with the steps. Preparing in advance is like practicing the steps before your first dance. It will help you avoid possible costly mistakes, and perhaps stepping on someone’s toes.

You need to answer the following key questions before you take that first dance step:

1.) Do we truly need an alliance or do we have the expertise and resources required to succeed on our own?

2.) What benefits are expected from an alliance versus going it alone (both financial and non-financial)?

3.) Who are the potential alliance associates?