It happens all the time: when CEOs don’t know what to do, they create a strategic alliance. Alone, they’re exposed. As a group, they must be doing something right because everyone else in the herd does it too. In the early nineties, my friend Denise Caruso, a NYT columnist and editor of the Digital Media newsletter, listed over 150 such alliances.
They often amount to worse than nothing: agitation, confusion, hard-to-reconcile cultures, hidden agendas and fears of losing control of one’s destiny.
In the best of cases, the product of the announcement is the announcement, a short burst of mildly favorable publicity. I know whereof I’m speaking, I’m hereby pleading guilty to the Apple-Digital Equipment Strategic Alliance, that was in the late eighties. We know what came out of it: nothing. Luckily, once the talking heads left the stage, the engineers in both companies, in their usual fashion, disregarded executive orders and decided they had better things to do. No monstrosity was created.
Unfortunately, it doesn’t always work like that. There are countless examples of companies making a huge, expensive mess of a forced attempt at harnessing groups, cultures with different agendas under a politically correct standard, in the name of a warm and fuzzy goal.
Remember AIM? Apple, IBM and Motorola, an early nineties strategic alliance. (I had no part in that one, having left Apple.) The idea was to harness the technology and people of these three companies to create a new object-oriented operating system, Pink, running on the IBM/Motorola PowerPC architecture. The whole thing was folded into a new company, Taligent — dissolved in 1998. The whole thing cost hundreds of millions of dollars. (Fortunately, in 1997, Steve Jobs masterfully crafted a “reverse acquisition” of Apple; he promptly put the NeXT software engineers in charge and we know the rest of that story.) More