With a changed economic climate, partnerships have emerged as a survival tactic. In April when the Borders book chain realized its e-commerce efforts were falling flat, it partnered with Amazon.com, whose ordering and distribution channels were established. "Partnerships are Amazon’s only real life raft," says Carrie Johnson, an analyst at Forrester Research in Cambridge, Mass. "Sales are slowing, retail is reaching saturation in many categories, and so partnerships are their saving grace."

The Skinny on Partnerships

Partnerships can be an effective way of gaining access to customers, brands and markets that you didn’t have before. For e-commerce endeavors, they can provide a cash infusion without taking the venture capital path. But they are not a panacea.

"Partnerships can help you survive and grow and acquire new skills," says Benjamin Gomes-Casseres, associate professor of international business at Brandeis University in Waltham, Mass., and author of The Alliance Revolution: The New Shape of Business Rivalry. "But they are not a cure-all. You cannot assume that you’ll get results just because you have partners."

These relationships fail often and for a variety of reasons. One party may try to dominate the relationship, goals and priorities may change over time, and arguments can arise over finances. In September, Cox Communications said it would end its partnership with Excite@home, a broadband access provider, because of Excite’s financial difficulties. Ending the partnership was a "protective measure that allowed us take back control of our network and ensure quality and customer service," says Laura Oberhelman, a Cox spokeswoman.

To launch a partnership, a CIO must first have a clear understanding of his own organization’s strengths and weaknesses, says Stephen Spalding, a San Francisco-based principal in the management solutions group at consultancy Deloitte & Touche. "You have to look at your core capabilities and focus your efforts on those," Spalding says. "Partnerships must start with both partners knowing the other will commit resources, blood and muscle to make it work. That way, if someone messes up, they will work together to make it better."

Collaboration Incentives

When Lands’ End launched Landsend.com in 1995, executives weren’t concerned about going public or buying Super Bowl ads. After all, the Dodgeville, Wis., company had 38 years of mail order success under its belt, and a business model focused on strong customer service. The site had revenues of $218 million in fiscal 2001, or about 16 percent of Lands’ End’s total revenues of $1.35 billion. But the Web project was more of an experiment than a strategic initiative, says Bill Bass, senior vice president of e-commerce. "We didn’t bet the farm on a big deal with Yahoo, like some companies did," Bass says. "The business model is very important to us. The site’s growth was purely organic?we got it running, learned as we went and watched what paid off."