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Whether you work for an OEM or a supplier at any level, going it alone is going to become increasingly difficult.

Whether you work for an OEM or a supplier at any level, going it alone is going to become increasingly difficult. The reasons are simple. For one thing, there needs to be global leverage. This means the wherewithal to (1) serve markets around the world and (2) have a sufficiently low-cost manufacturing base is essential. To put it mildly. And that’s probably not attainable by organizations that are existing in organizational isolation.

Additionally, there are the abiding challenges of technological developments, be they changes in process technology needed to produce things or changes in the end products themselves. How can you keep up to date with all of this when you’re working alone? It is possible if not particularly practical.

One company that is a serial collaborator (and acquirer) is Cisco Systems. So who better to write a short book on the subject than Steve Steinhilber, vice president, Strategic Alliances, Cisco? Strategic Alliances: Three Ways to Make Them Work (Harvard Business Press; $18.00) is a straightforward discussion of what will become a vital way of work for more companies. (The three ways? Build a strategic framework; prepare the organization with alliance managers who are empowered; create relationships with trust.)

As Steinhilber writes of the importance of pursuing this path: “Alliances, done right, can generate significant and sustainable business value compared to other investment priorities by:

  • Accelerating your market access in adjacent or new market spaces and creating new top-line revenue growth
  • Enabling you to focus on those places in your value chain that leverage your core competencies and therefore reduce your costs and risks in attaining this top-line revenue growth
  • Providing you a way to balance business risk, create competitive advantage, and help move the market by leveraging an integrated portfolio strategy model
  • Helping you create sustainable and differentiated value.

Imagine: He’s talking about things that are vital to OEMs and suppliers, and he’s in the high-tech industry. Just think how valuable they are to automotive.—GSV