Strategic Alliances and Member Firms

Member firm organizations are one form of strategic alliances which are becoming more prominent in the business world.  Member firms are loosely or tightly knit groups of companies which have chosen to come together to promote their common interests and to help each other to grow revenues and capabilities.

If one googles the term ‘member firms’ and toggles a bit, you can find interesting examples and applications of how individual companies are tied together in member firm organizations.  Some member firm organizations are going to market under a single, lead brand whereas others are connected under an endorsed brand.  Some are publicly touted as a single entity (like a corporation or a franchise) and others are happily united as members of a group of independents (like a business club or professional association).

In the business world of professional services, the accounting, internal audit and tax firms have been the most active in designing and building member firm organizations.  Companies like Deloitte and several of the other large global accounting firms announce clearly on the first pages of their websites that they are member firm organizations, mostly for reasons of liability exposure.  Grant Thornton, who have grown tremendously through partnerships of independent companies over the last decade, writes:

“Each member firm is independent. Each is a separate legal, financial and administrative entity, practicing under the laws of the country where it is based. Each is locally owned, operated and managed, and responsible for its own liabilities.  Member firms are not members of one international or legal partnership. No single firm is responsible for the services or activities of any other.  But each member firm is committed to the standards and values represented by the Grant Thornton International brand”

Strategic alliances and member firms in the consulting world provide a framework and governance model, an ecosystem of like-minded companies, to enable growth and better development than anyone of the individual firms could achieve on their own, or in one-to-one alliance relationships.  The member firm construct allows for a one-to-many alliance relationship whereby consulting firms can turbo charge their individual ambitions and stay relevant in an increasingly competitive environment.

Strategic alliance professionals work in all areas of a member firm’s business to help its members to grow:What is a Strategic Alliance?

  • Marketing and branding – ability to articulate the global-local delivery model
  • Sales and business development – ability to sell work across geographies and industries
  • Production of goods and services – ability to leverage expertise and share intellectual capital
  • Distribution channels to market – ability to flow services seamlessly into new segments and markets
  • Aftermarket offerings and SLAs – ability to provide uniformed services in a modular manner
  • Shared and managed service centers – ability to reduce costs, and to mitigate risk and complexity

All of these activities across the value chain are designed to increase the overall capabilities of each individual member firm.

With the proper governance structure, executed with acumen and flexibility, the member firm business model allows for the sharing of best practices in a professional, non-competitive manner.  Member firm organizations are not just theoretical marketing models.  In the world of business services, exciting new opportunities to create value for end clients, for consultants and for the member firm organizations are sprouting up everywhere like spring flowers.  Deal flows are accelerated and general capabilities are augmented through the coalescing of member firm clusters.

Member firm execution requires a deft open-closed model leveraging the best of each contributor and mitigating the least attractive characteristics of each of its members.  The overriding value proposition is to provide each member firm with more expertise, deeper and broader service coverage, thus creating more value for a member firm’s clients and teams.

Professional associations, NGOs and other non-profits have accomplished remarkable results within member firm models.  There are many ways to design and implement member firm organizations.  International dimensions create additional complexity and cultural issues.  Protocol which is too loosely or too tightly applied can minimize the synergies.  There is an art and a science to designing and implementing successful member firm organizations.

But the overall benefit of strategic alliances and member firm organizations, in new and collaborative ecosystems, promises great things in the coming decade.  Companies and executives who can be bold while keeping their egos in check in networks dominated by type ‘A’ personalities, and learn to truly partner collaboratively and fairly as equals, will have a leg up on the competition for winning large projects and hiring the best & brightest in the years ahead.



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