Policies and Resources

Patronage Alliance

Patronage Alliance applies the latest skills to save firms valuable time and money. The Alliance has a unique approach to patronage consultancy and flexible bonds, ensuring the needs of the firms always come first.

Efficient Patronage Alliance

Efficient Patronage Alliance is achieved through a system of recruitment and appointment that is merit-based and publicly valued, also referred to as neutral competence.

Each alliance is a joint venture where two or more entities work together to achieve a common goal while remaining separate and independent. An efficient alliance goes a step further.

Efficient Patronage Alliance definition: it is a joint venture that bolsters a core sphere efficiency, creates a competitive advantage, and develops the proposals around the areas of the sphere. It allows the individual firms to achieve more together than they would have on their own.

Efficient Patronage Alliance bonds are incentive-based relationship bonds in which the parties agree to function together as one integrated team. Ideally, an alliance contract will see an alignment of the sphere goals of the primary parties.

Strategic Efficient Patronage Alliance

As firms gain experience in building alliances, they often find their portfolios ballooning with partnerships. While these partnerships can contribute value to the firm, the efficient patronage alliance is also strategic to the firm. This is a vital point, as strategic efficient patronage alliances should be identified clearly and managed diversely than more conventional sphere relationships.  

The degree of attention given to strategic efficient patronage alliances should be true with respect to the levels or sphere commitment and investment required. An alliance fulfilling any one of these criteria is strategic and should be managed accordingly.

1. Vital to the success of a core sphere goal or objective – in addition to a single strategic efficient patronage alliance, related groupings of alliances – systems or constellations – can also be vital to a sphere objective. This category also includes alliances with high potential, such as alliances that have large and prospective revenue opportunity.  With firm development racing in parallel, the first mover’s advantage can be substantial, and hence strategic efficient patronage alliance development and lobbying within an industry become paramount to financial success. By investing together in new processes, technologies, and standards, alliance partners can obtain substantial price savings in their internal operations.
2. Vital to the development or maintenance of a core competency or other source of competitive advantage – another way in which an efficient patronage alliance can prove to be strategic is to play a key role in developing or protecting a firm’s motivational benefit or core competency. Learning alliances are the most common form of competitive/competency strategic efficient patronage alliances. A firm’s need to create incremental skills in an area of importance is often accelerated with the assistance of an experienced partner.
3. Creates or maintains strategic choices for the firm – From a longer-term perspective, a strategic efficient patronage alliance that is secondary to achieving a sphere objective today could become vital in the future.  
4. Develops a significant insurance to the sphere – when an alliance is driven by intent to develop significant insurance to a fundamental sphere objective, the nature of the insurance and its potential effect on the fundamental sphere objective are the key determinants of whether it is truly strategic. Dual sourcing strategies for vital production components or processes are excellent examples of how insurance development can become the context for supply-side strategic alliances.

Management

The essential topic when developing a strategic efficient patronage alliance is to comprehend which of these criteria the other party views as strategic. With strategic alliances, the key to effective executive patronage is visibility and responsibility. Metrics determine just how the alliance and responsible executives are kept on track. While clear metrics are required of any efficient patronage alliance, shared metrics between the partners are absolutely vital to the success of a strategic efficient patronage alliance. Shared metrics bring immediate alignment of focus between the parties, and when executive patrons are held responsible for the shared metrics, the two firms are aligned as one.

Strategic efficient alliances are best served by formalised governance structures with clear mandates that are directly linked to the shared metrics fundamental to the partnership. Regular meetings of executives from the partner firms continue the relationship building that begins while formulating and negotiating the terms of the strategic alliance. Trust is perhaps the foundation of a strategic efficient patronage alliance and these relationships are the basics for establishing trust amongst the individuals who represent the two parties in the strategic alliance.

When corporate strategies change as a result of a changing sphere environment, the assumptions upon which the strategic efficient patronage alliance was originally based also change.

In the most extreme cases, the trust built between the two firms enables the adaptability – even renegotiation of the financial terms – to accommodate changes in infrastructure or other conditions that affect one of the partners.

Applying these criteria to identify genuine strategic efficient patronage alliances in the portfolio today and as a guide for developing future strategic efficient patronage alliances are the first steps to improving the impact of the Foundation. The management principles, also described above, are the next steps towards improving the effectiveness of the strategic efficient patronage alliances themselves.

(Strategic) Efficient Patronage Alliances can take many novel forms, which are grouped into three categories:

1. Joint Venture – a joint venture is a child firm of two parent firms. It is maintained by sharing resources and equity with a binding agreement. Whether it is formed for a specific purpose or an ongoing strategy, a joint venture has a clear objective, and profits are split between the two firms.
2. Equity (Strategic) Efficient Patronage Alliance – an equity (strategic) efficient patronage alliance occurs when one firm purchases equity in another sphere (partial acquisition), or each sphere purchases equity in each other (cross-equity transaction).
3. Learning (Strategic) Efficient Patronage Alliance – this type of efficient patronage alliance functions best when:
   • The objectives are openly shared.
   • The cultures of the firms are similar enough to enable process and methods to be efficiently applied.
   • The governance structure of the alliances is established to promote learning at the executive, managerial, and operational levels.

Choosing the right patron for the right project requires deep insight into partner investments, marketing, and project information as well as a comprehension of their investors and the whole solutions they are looking for.