Alpha Partners: Who's the Leader?

In the increasingly complex world of innovation, companies need to build networks with one another to succeed.  These networks give all the partner companies an opportunity for personal growth as well as a chance to be part of a larger innovative process than they could achieve on their own.

Hannah Schroer

“There’s a whole set of partners and other actors who need to be doing other things in order to monetize that innovation,” said Jaideep Raje, a senior consultant for Lux Research.

Still, the network needs an organizer to direct the group’s focus toward strategically important goals.  That organizer does not always come from the top; sometimes the person emerges from within as an invested party who is not afraid to make hard choices to get results. One could think of such partnerships as an ecosystem, but a simpler image might be a quilting circle. In a quilting circle, every quilter works separately toward the same goal -- in this case a tri-colored blanket.  One personsews red squares, another yellow, and a third blue.  The quilters need enough fabric, thread and time to finish the project.  They must also communicate with one another to ensure that no one person sews too many squares or runs out of material. In a quilting circle, there is not a boss who directs the quilters.  Instead, one of the group steps up and steers the team, making sure everyone is on the same page.  That person needs to connect and communicate a wide breadth of knowledge to get the job done.

Coordinating a blanket is easy, but bringing a new technology to market is not so simple. There is a reason so many people refer to innovation networks as ecosystems:  each component contributes to a system as delicate as a rainforest.

Grundfos Lifelink System -- an ecosystem that worked. 

Grundfos LIFELINK, a subsidiary of pump manufacturer Grundfos, designed a combination water pump and distribution system fueled by solar energy.  The system, which allows Kenyans to purchase clean water on their smart phones, is the product of a range of players from non-government organizations and IT companies to the consumer. Grundfos took charge of a network of partners in order to bring its LIFELINK system to communities in developing countries.  Realizing they needed local support, Grundfos identified the necessary players to tap into the market.

Jaideep Raje“They had no choice but to take on the mantle of the alpha,” Mr. Raje said.

Alpha partners don’t emerge as bosses controlling outcome, but a partner who coordinates the group to make an outcome work.  The work requires someone who can identify opportunities for growth similar to a generalist. While generalists develop innovation strategies and areas that present growth opportunities, alpha partners execute the strategy. The partnership network needed to bring LIFELINK into action has the complexity of an ecosystem.  The project required solar companies to make solar panels to power the water taps and construction companies to install the wells.  Meanwhile, IT companies had to work with Grundos and the Kenyan bank to set up a payment method that consumers could use.

Bridging the Communication Gap

Bulk commodities companies do just fine using traditional partners and customers.  But partnerships are an important way of thinking strategically to form a bridge between the product of today and that of tomorrow. A standard commodity, adapted by one new technology, could be used to reach a whole new market.  Reaching that market requires an ecosystem, and every ecosystem needs an alpha partner capable of keeping track of all the moving parts.

True alpha power comes from an ability to select, manage and facilitate partnerships between players in an innovative ecosystem, not from muscling people into submission.  In the airline industry’s search for biofuels, the alpha partner realizes the solution will come from a network of people developing separate parts to the technology.  The alpha partner supports those partners while simultaneously looks at the advantages and disadvantages of using different biofuels and ways of producing those fuels.

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