The Hindu Business Line : No place for blind love in these marriages

MARRIAGES are made in heaven, they say, though there are no explanations for the currently high failure rate. Business alliances, though similar to marriages, are usually born in boardrooms and golf courses, if not over cocktails and in long-haul flights.

However, "in alliances, as in marriages, there is no recovery from selecting the wrong spouse," write Gene Slowinski and Matthew W. Sagal in The Strongest Link, published by Amacom (www.amacombooks.org).

The book is about `forging a profitable and enduring corporate alliance' so that the exercise does not form part of the high-mortality statistic of 75 per cent failure. "Assuming that the component companies are in good health and under sound management, don't their individual track records indicate great promise for cooperative venture?" the blurb asks, and proceeds to answer.

"Alas, the whole is often much more complicated than the sum of its parts, and all too many attempted collaborations are plagued by the inability to negotiate win-win agreements, align organisational cultures, and — most crucially — get people to work together productively."

As with good intentions that lie littered all the way to hell, so with corporate matrimonies, the human element can play the difference between success and failure. "Often, managers with little or no experience are asked to plan and negotiate an extremely complex business structure. When they do not understand the complexities of intellectual property rights, the subtleties of exclusivity, the traps of termination provisions, and the nuances of financial models, these managers craft deals that are fatally flawed." No different from quacks.

There is something called `deal fever', perhaps like blind love. "Executives succumb to the allure of multimillion-dollar payoffs, meetings in expensive restaurants, and the general euphoria of the moment. When disconnects with strategy appear during negotiations, these managers are reluctant to tell the CEO that the big deal already discussed with the Board is flawed." What if the fever hits the top management? It could be even more damaging.

"Top managers sweep away every obstacle to getting to a final agreement. Internal critics are silenced. Well-thought-out stakeholder objections to proposed changes in the firm's earlier element positions are given short shrift. Deal-killers are ignored." The authors pose a query: "Has your firm ever signed a deal because someone in your company had deal fever?"

One of the intellectual property issues that bogs down managers is the concept of `ownership', with each side attempting to retain, or gain ownership of IP. "Rather than ownership, business people should first deal with `right to use' (RTU)," advises the book. "RTU means exactly what it says. The firm has a right to use specified IP as defined in the agreement. RTU is directly connected to the marketplace."

However happy life could be ever after, there are conflicts to manage. "There can be a fine line between intelligent and dumb failure," note the authors. "Operating managers cross the line when they take a reactive stance to dealing with conflict." What is conflict?

"The existence of competing or incompatible options to reach a single goal or objective," define the authors. "Alliances require change. Change means movement. Movement means friction." And friction means conflict. But conflict loves to be ignored. No, don't!

"Left unmanaged, conflict strains relationships, decreases productivity, erodes trust, and leads to an `us vs. them' mindset characterised by decision-making paralysis."

So, remember, that the only thing worse than confronting conflict is not confronting it.

ManageMentor@hotmail.com

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