Four Questions for Appraising Your Alliances

MIT Sloan Management Review, December 22, 2020

by Theodore Kinni



Over the past four years, many of the United States’ geopolitical alliances have been remade with bewildering speed. It’s no surprise that many of those changes created an uproar — some of these relationships dated back a century or more and seemed sacrosanct, until they weren’t. It also prompted Stephen Walt, the Robert and Renée Belfer Professor of International Relations at Harvard University, to cut through the noise with an article in Foreign Policy titled “How to Tell if You’re in a Good Alliance,” which is instructive for business leaders as well as diplomats.

Walt is a pragmatist, so the first thing he points out is the unspoken assumption behind the uproar: that each of a nation’s existing political alliances is actually worth maintaining. “Surely this is not the case, for all allies are not created equal, and the value of any commitment is likely to wax and wane over time,” he writes. “Wise countries choose their allies carefully and do not treat any of them as sacred and inviolable.”

This is as true in business as it is in international relations. Corporate alliances are a means to an end, and they involve costs and obligations. Accordingly, corporate leaders, like the heads of nations, should never take the value of their partnerships for granted. Toward that end, you can conduct a fast review of the value of your company’s alliances by asking the following four questions, derived from the short list of attributes of a good ally that Walt offers in his article.

Does your partner make a meaningful contribution to the alliance? This is a key question when reviewing a partnership. It’s also one that torpedoed the 2009 alliance between Suzuki Motor Corp. and Volkswagen. Volkswagen wanted to gain greater access to the fast-growing Indian market through Suzuki, and Suzuki wanted access to Volkswagen’s hybrid and diesel technologies. The problem, claimed Suzuki chairman Osamu Suzuki less than two years after the companies bought stakes in each other, was that the technology Suzuki sought wasn’t forthcoming. Suzuki didn’t need the technology that VW was willing to provide, and VW wouldn’t provide access to the technology that it did need. If your partner hasn’t made the contributions it promised, you don’t have a good ally. Read the rest here.

Is the gig up?

strategy+business, December 17, 2020

by Theodore Kinni



Photograph by Brothers91

A decade ago, advocates touted the sharing economy as an alternative to corporate capitalism. Digital technology was opening vast, new peer-to-peer marketplaces: TaskRabbit and Airbnb were founded in 2008, Uber in 2009, RelayRides (now Turo) in 2010, Postmates in 2011, Lyft in 2012. These platforms promised that people would be able to make a good living while working when and how they wanted — selling their time and skills, and renting out their cars, spare bedrooms, and that dusty camping gear in the attic.

“You will know by now that things haven’t turned out exactly as expected,” Juliet Schor wryly notes in her new book, After the Gig. Schor, a sociology professor at Boston College, and her team at the Connected Consumption project, funded by the MacArthur Foundation, studied gig workers and platforms of the sharing economy from 2011 to 2017. The result is a more nuanced view than has been offered by previous books on this topic, which typically focus on either how companies can build their own platforms or how platform companies prosper by evading regulation and exploiting workers.

Among the insights: The less you actually need a gig job, the more likely it is that a gig job will work for you. “Workers’ experiences are not uniform, with variation in pay rates, job satisfaction, and how they do the work,” Schor explains. “As we saw these differences playing out at individual companies, we realized that they are explained by how dependent the worker is on income from the platform to pay basic living expenses.” Schor’s team found that supplemental workers — that is, workers who are not financially dependent on their platforms — make more money, have more autonomy, and are more satisfied with their gigs than platform-dependent workers. Moreover, the former group comprises 34 percent of the workers in the sample the team studied; the latter was only 22.5 percent. (The rest, nearly half of platform workers, fall between the two extremes.)

This finding partly contradicts the headlines of worker abuse that have generated a lot of political Sturm und Drang lately. At the same time, it is clear that the gig economy can’t really substitute for a full-time job. As Schor concludes: “With some exceptions, our data suggest that being dependent on a platform is not a viable way to make a living.” Read the rest here.