Your company may be the best at what it does, but that doesn’t mean anything unless you can get your products to market and service your customers. “You may have for example some of the best programmers in Kitchener-Waterloo but if they don’t know how to distribute that particular product, it’s really all for naught,” observes Phil Hogg.
The solution to this problem? Partner with another business that excels in the areas your company is lacking. “I look at alliance and partner management as a gap fulfillment strategy,” explains Hogg, President of the Toronto chapter of the Association of Strategic Alliance Professionals. Hogg was speaking at a special Voice of Entrepreneurs for Entrepreneurs panel to mark the launch of CPA Canada’s new book, Business Insights, which Andrew Brown and I co-authored.
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There are three ways to grow a company: build, buy or ally. The first involves organic growth, while the second covers mergers and acquisitions. Hogg says the alliance route has the quickest line to market, since in removes the delays and complexities of finding investment and developing new products or integrating new acquisitions into your business.
A partnership effectively allows you to borrow the resources and expertise you need from another company. “You’re borrowing somebody’s capital, or intellectual property,” says Hogg, who is also Vice-President for Partner Channels at Pivotal Payments. “[Or] you could be borrowing their talent.”
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There’s also the opportunity to learn from the experiences of your new partner. “You’re also going to be borrowing their baggage, because when you start working in an alliance fashion you partner will certainly let you know what they’ve tried in the past and what’s been successful and what hasn’t been successful,” notes Hogg. “You will learn from their baggage and dirty laundry.”
While an alliance means sharing some of the spoils of a given venture, it also allows you to spread the risk. That makes it a relatively safe way to grow your company while minimizing the possibility of losing everything on an unsuccessful move.
The panel also featured Claudia Harvey, co-founder of Dig It Apparel Inc, who explained how taking control of your own manufacturing empowers your company to grow, and Derek Szeto, co-founder of Dossiya and CEO of Wirk’n, who discussed growth through product innovation.
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To hear what Szeto and Harvey had to say, and to hear more from Hogg, listen to the first instalment of this special two-part panel. You can catch part two on PROFITguide.com on February 5.
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