Strategic Alliance Magazine Q3 2019 - 32

ALLIANCE WIND-DOWN

CONSIDERATIONS FOR DISENGAGING THE ALLIANCE INCLUDE:
Contractual considerations
- Review and thoroughly
understand the termination
provisions in the contract.
- Ensure that there are plans for
completing residual obligations.

Human Risk

WIND-DOWN

Consult and obtain advice from these
functions before taking any action
- Corporate Business Development -
on how best to capture key points
of learning that can be used in
future alliances
- Legal - to minimize uncertainties
covered by the contract
- Investor Relations - to make sure
that there are no surprises
- External Panel of Experts - it could
be prudent to convene such a "brain
trust" prior to making a final decision
to terminate if the decision requires
certain criteria to be in effect
- Corporate Communications -
to begin to generate an external
communications plan prior to
informing the partner of termination; this plan may include plans to
notify other partners that could be
affected by the announcement

Business Risk

Managing mass
Leveraging the
of alliance existing governance
personnel
to execute the
wind-down
Establishing guiding
principles to manage Chunking the windbehaviors and actions down into manageduring the wind-down able categories and
work streams
Allowing for longstanding relationships Reevaluating
to celebrate past
processes to enable
successes
speed over precision
Rewarding the people
who are leading the
wind-down

Legal Uncertainties
Acknowledging each
company's document
retention policies
Parties agree on appropriate side amendments
to original contract
Ensuring that both
companies understand
ongoing responsibilities

Information technology (IT)
and equipment
priately to manage
- If hardware has been purchased
Ensuring that windand installed at the partner's
down activities satisfy
legal obligations (each
facility (e.g., servers and videocountry's laws)
conferencing equipment),
Figure 2: Broad Objectives for Wind-Down Phase
work with the partner and IT
to have it returned.
- Notify collaborations supported by - Assign the co-chairs of each
governance body responsibility for
IT so that any infrastructure in place
shutting down their areas and for
can be removed. Accounts should
reporting back to the next level of
be terminated promptly.
governance.
Maintain an ongoing
- Use checklists similar to those
dialogue with the partner's legal
used by M&A groups to make sure
department as appropriate
that you are not missing critical or
Summary
significant steps.
Decision to disengage
- Take broad measures to mitigate
- Establish a process that will fulfill all
- Review and fully understand the
human risk, business risk, and legal
contractual obligations that exist
reasons for the disengagement.
uncertainty (see Figure 2).
after alliance Wind-down.
- Ensure appropriate communications
- Use the governance process to
plan is in place if the decision to terunwind the alliance at the end of its
minate is material to either company.
life cycle.

that all agreed-upon tasks have been completed successfully. This process reassures line management and relieves
alliance management of a significant burden by ensuring
that the ownership of the Wind-down rests with those who
have the deepest understanding of their local activities.
For example, an international alliance that has operations in all major countries might begin the unwind first
by geography, and then by shutting down the corporate
support functions that are no longer needed to support the
geographies. Next it might dissolve the lower-level corporate
governance teams and then finish by having the senior-most
governance body declare that the alliance is officially over.
It may be necessary to enlist the help of a project
manager to keep track of key events and details, depending
on the skill or time commitment of the alliance manager
32

Strategic Alliance QUARTERLY

| Q3 2019

responsible for the overall Wind-down. This approach provides an extremely effective and efficient way to make sure
all passengers and crew make it off the ship in a safe and
orderly fashion.
Maintaining such organizational composure during
the Wind-down also goes a long way toward ensuring a
relatively positive exit from the partnership. This is not always
easy because an alliance can end for many reasons, ranging
from the natural end of an asset's life cycle to an unexpected
and bitter court dispute. But regardless of how, why, and
when a partnership concludes, the way in which an alliance
Strategic Alliance Magazine Q3 2019

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