Getting birds of a different feather to flock together: Achieving integration of capabilities in strategic alliances

Strategic alliances that succeed in merging and integrating new knowledge streams do not just happen by chance. In fact, most attempts to do so fail. Competitive knowledge embedded in the strategic capabilities brought to the party by alliance partners is sticky. It is inextricably bound to the inherently non-tradeable 'soft' assets of each of the partner organizations. 'Soft' assets include the values, culture, and the depositories of tacit knowledge in the form of hard-won experience of each of the respective partners. Due to their complex and tacit nature, these capabilities, in reality, cannot be 'acquired'. Successful alliances have shown, however, that knowledge streams can be indeed be merged to form new strategic portfolios. Successful merging of strategic capabilities requires deliberate engineering. A number of critical factors come in to play. These must not be left to chance. In this paper, the authors identify and describe two of these: (1) complementarity of capabilities, and (2) fit of organizational culture and practices. A conceptual framework describing the role and interplay of these factors is developed. The paper uses the example of Syntheseas, the now joint venture between ABB and Schlumberger to illustrate the concepts developed.