strategic alliances are channels for innovation at sprint nextel

Strategic Alliances Are Channelsfor Innovation at Sprint Nextel SUSAN NELSON

Innovations nurtured through strategic allianceshave helped make Sprint Nextel one of the front-runners in the race to redefine the telecommuni-cations industry. Its successful partnerships sharea common implementation approach that includescareful alignment of objectives, deployment of ded-icated resources, and strong collaboration at all lev-els, facilitated by the company’s Strategic Alliancefunction. Each Strategic Alliance team bridges thealliance partners’ organizations to keep informationflowing, access needed resources, help resolve prob-lems, and build positive relationships that enablethe partners to leverage each other’s technology andmarket expertise to bring value to Sprint Nextel cus-tomers. © 2007 Wiley Periodicals, Inc.

Wireless communications and wireless access to busi-ness critical information and the Internet have be-come essential to both business and personal life,and wireless technology is at the forefront of pro-viding even greater opportunities for employees tostay connected anytime, anywhere. This and othertechnology and service innovations are changingthe nature of the telecommunications industry—andunderpinning the transformation of Sprint Nextel.Since the 2005 merger of Sprint and Nextel, the com-pany can claim the third largest wireless communi-cations network and the largest wireless broadbandnetwork in the United States. With 53.1 million sub-scribers worldwide, the company provides a com-prehensive range of communications services thatbring mobility to consumer, business, and govern-ment customers. Sprint Nextel is looking to lever-age its capital investments in two robust wirelessnetworks, mobile voice and data services, instantnational and international walkie-talkie capabili-ties, and an award-winning Tier 1 global IP back-bone as a platform for transitioning from a telecom-

munications company to a provider of media andinformation.

Engines of InnovationTechnology and market innovation are key driversof the company’s rapid growth, and strategic al-liances have become one of the most successful com-ponents in Sprint Nextel’s innovation strategy. Col-laboration between Sprint and its strategic alliancepartner companies has made it possible for SprintNextel’s customers to—

� Respond to e-mail using a Sprint PCS MobileBroadbandTM Connection Card Download newsclips from MSNBC with Sprint Power VisionSM

and the MOTORAZR V3m phone by Motorola� Access e-mail similar to the desktop experience

using a Sprint Mobile Broadband Smart DeviceTreoTM 700wx by Palm

� Enable a workgroup at a worksite to access andshare project-critical information via the Inter-net and Sprint’s wireless data network using theLinksys Wireless G Mobile Broadband Routerand a Sprint PCS Mobile BroadbandTM Connec-tion Card.

“Sprint is focused on delivering technologies that en-hance the customer and employee experience,” saysMark Angelino, Sprint Nextel’s president, Sales andDistribution. “People want the freedom and flexi-bility to use this technology to provide convenienceand peace-of-mind.” Sprint Nextel has worked withits alliance partners to increase the functionalityof wireless devices to instantly access voice, video,and data over its powerful network. These capa-bilities “can provide significant meaning to a per-son’s daily life,” says Tim Donahue, the company’s

6

c© 2007 Wiley Per iodicals , Inc .Publ ished onl ine in Wi ley InterScience (www.interscience.wi ley .com)Global Business and Organizat ional Excel lence • DOI : 10.1002/ joe .20160 • Ju ly /August 2007

vice president, Business Marketing, by “empoweringcustomers to stay connected to the home or office.”

A History of InnovationBoth Sprint and Nextel have a legacy of innovation.Both companies led the telecommunications indus-try with their 100 percent digital CDMA wirelessnetworks and the introduction of the iDEN tech-nology. Sprint’s “firsts” in recent years included a10-gigabit per second transatlantic IP backbone anda full network upgrade to 3G. Nextel led the in-dustry with the introduction of walkie-talkie ser-vices, streaming video, and GPS-enabled phones.Sprint Nextel is currently rolling out the largest high-speed EV-DO network of any telecommunicationsprovider.

To fuel new innovations, Sprint Nextel has imple-mented a process to drive ideation, to capture themost innovative ideas offered both within the orga-nization and via external sources.

To fuel new innovations, Sprint Nextel has im-plemented a process to drive ideation, to capturethe most innovative ideas offered both within theorganization and via external sources. This pro-cess, shown in Exhibit 1, identifies strategically im-portant ideas, selects viable product concepts, andthen accelerates the concepts for prototyping, in-cubation, customer trials, etc. Many product con-cepts will be discarded along the way, while otherswill “graduate” and move into commercializationas mainstream development efforts either withinSprint Nextel’s various product groups, in joint ini-tiatives with strategic alliance partnerships, or in ex-ternal organizational entities such as joint venturesor spin-offs.

Strategic Alliances as a Competitive Differentiator“True innovation occurs when people begin toshare ideas and exchange information,” says Sprint

Nextel’s Mark Angelino, and under the right setof circumstances such sharing and exchange canoccur across organizational boundaries. Externalnetworks can be powerful engines of innovation,whether they arise from formal alliances or informalaffiliations such as vendors or partners. External net-works allow companies to be in touch with the rightpeople, organizations, and ideas that may spark cre-ative new ways of growing a business, developing oradapting a technology, and capturing opportunities.

As shown in Exhibit 2, teaming with alliance part-ners enables Sprint Nextel and the partner to capi-talize on each other’s technology expertise, marketleadership, and/or customer relationships in orderto create a unique customer solution. The resultof a successful strategic alliance relationship—onewith dedicated resources and aligned goals andobjectives—is a truly comprehensive effort that pro-vides mutual benefits and value to customers that ex-ceed what could be achieved through each partneracting alone. More specifically, strategic allianceshave provided Sprint Nextel with greater revenueand growth opportunities, increased channels of dis-tribution, new product/service offerings, increasedspeed-to-market, and technological advances.

Choosing PartnersWhen Sprint Nextel identifies and evaluates orga-nizations as potential alliance partners, it looks forkey characteristics that it believes essential for a suc-cessful alliance, including the following:

� Strategic alignment and cultural fit� Complementary capabilities� Financial and ethical stability� Proven market leadership� Proven partnering success

Drawn from Sprint Nextel’s extensive experiencewith strategic alliances, these criteria seek to notonly maximize the upside opportunity of an alliancebut also lower the potential risk for the company.

Global Business and Organizat ional Excel lence July/August 2007 7DOI : 10.1002/ joe

Exhibit 1. Overview of Innovation Flow

Types of Alliance PartnersSprint Nextel seeks alliance partners that can help itin four strategic areas:

� Build market leadership for its Mobile Broadbandand high-speed IP services in its industry chan-nels and segments, as well as gain access to newmarkets

� Differentiate its services from competitors by— Expanding the use and adoption of wireless

data

Exhibit 2. Defining a Strategic Alliance

— Leveraging applications and content to makeinformation available in real time

— Exploiting new business opportunities thatdrive incremental revenue

— Delivering operational excellence, includingstreamlining existing processes and adoptingnew technologies

� Improving the customer experience in order tobuild loyalty, delight customers, and provide cus-tomer value

Some of the company’s most significant strate-gic alliances have been with firms with capabili-ties in system integration, equipment/infrastructure,mobility, software, or public sector markets/channels.

System Integrators. Alliances pair Sprint’s wirelessand wireline network capabilities with a system inte-grator’s application development, process engineer-ing, and managed services capabilities to provideoperational improvements and better cost efficien-cies for businesses. Once these productivity gainsare realized, the alliance partners seek incrementalopportunities to create additional value for the endcustomer.

8 July/August 2007 Global Business and Organizat ional Excel lenceDOI : 10.1002/ joe

Equipment Providers. Alliance agreements withkey equipment suppliers—Cisco and Nortel, forexample—help drive the convergence of voice,video, and data communications for the next gener-ation of service offerings.

Mobility Specialists. Sprint’s alliance with mobilityspecialists—IBM, for example—have produced so-lutions that allow a mobile device with wireless con-nectivity to access enterprise information and appli-cations once only available on a desktop—a boonfor employees in the field and on the move, and atool for business continuity in the face of outagesand connectivity problems.

Software Specialists. These alliance partners—Microsoft, for example—bring systems and applica-tions capabilities that enable Sprint’s customers touse their wireless devices for more functions, suchas Internet searches or to access and download newcontent, such as media clips.

Channel Specialists. These alliances open new rev-enue opportunities for Sprint in specific public sectorsegments, including federal, state, and local govern-ments. Partnering with trusted advisors that havestrong reputations for addressing the unique needsof public sector customers enhances the credibilityof the Sprint Nextel brand in these markets.

To better focus resources on those business opportu-nities with the greatest revenue potential, in January2007 Sprint Nextel introduced the concept of Plat-inum and Gold alliances.

Prioritizing AlliancesTo better focus resources on those business opportu-nities with the greatest revenue potential, in January2007 Sprint Nextel introduced the concept of Plat-inum and Gold alliances.

Platinum Alliances. These partnerships have the po-tential to generate significant incremental revenuefor Sprint Nextel and are aligned with the com-pany’s strategic initiatives. These alliances will en-able Sprint to achieve its strategic goals in a moreexpedited time frame than if it were to pursue themon its own. Executive-level engagement, includingat the most senior level, provides sustained commit-ment and a strategic perspective, and Sprint Nextelassigns dedicated resources to further develop therelationship with Platinum alliance partners.

Gold Alliances. These partnerships are aligned withkey Sprint priorities and provide the company withincremental sales and channel opportunities.

ImplementationStrategic alliances may not have some of the com-plexities of mergers and acquisitions, but they arestill risky propositions for any company to engagein, challenging to manage, with an unacceptablyhigh rate of failure—some researchers say 40 to60 percent fail or fall far short of their originalobjectives.1 A study by the consulting firm Van-tage Partners found that more than half (52 per-cent) of failed strategic alliances floundered becauseof a poor or damaged working relationship betweenthe partners.2 Thus the importance of careful im-plementation and thorough follow-through to thesuccess of strategic alliances can’t be overestimated,and Sprint Nextel has “systematized” its approachto optimize the probability of success. Once SprintNextel makes the decision to partner with anotherorganization, it structures and manages the alliancerelationship to ensure it achieves its objectives, witha strong focus in several key areas.

Implement Governance Structure and Assign Account-abilities. In order to garner the most value out ofthese strategic relationships, the partners implementa governance structure that involves executives fromboth organizations in joint business planning, con-flict resolution, and direction of the work streamsnecessary to achieve the alliance objectives. Each


organization identifies the participants at all lev-els and in all involved functions beginning withthe lead officers and extending to directors, man-agers, and all the way to individual contributorprofessionals.

Define Mutually Acceptable Goals. Clear common goalsare developed to establish common expectationsin both organizations. The goals are cascaded tothe functions and participants involved in the workstreams to ensure that efforts in both organizationsare directed toward the same results. The work inand between both organizations is managed to en-sure progress towards the common goals.

View the Partnership as a Long-term Commitment. Asboth organizations learn to work and innovate to-gether, additional synergies and opportunities canreveal themselves. A long-term commitment posi-tions the partners to capitalize further on their mu-tual investment and even extend the partnership intonew areas.

Build a Relationship Focused on Collaboration. Since al-liance partners remain independent entities, a collab-orative relationship is essential for working together,resolving conflict, and making decisions. Sprint Nex-tel has created a culture within its own organiza-tion that promotes teamwork and cross-functionallinkage for the sake of delivering an optimal cus-tomer experience. Peer-to-peer relationships are ini-tiated between the Sprint Nextel participants andtheir counterparts in the alliance organization, inessence establishing partnerships between individu-als and functions as well as at the company level.Collaboration is thereby formalized at all levels ofthe organization, just as mutual goal setting alignsefforts and outcomes.

An Example of Alliance Success: Sprint Nexteland Cisco SystemsSprint and Cisco Systems recently celebrated the five-year anniversary of the alliance relationship through

which the companies have not only collaborated ef-fectively on marketing and sales initiatives but alsoproduced technology and product innovation thathas put the companies at the forefront of the mar-ketplace in introducing integrated wireless/wirelineservices.

A solid governance structure and identification ofaccountabilities underpin the alliance’s success:

� Gary Forsee, CEO of Sprint Nextel, and JohnChambers, CEO of Cisco Systems, have defined aclear pathway to success and identified synergiesthat leverage the most advanced technologies andthe market expertise of both companies.

� Vice presidents at both companies are responsi-ble for overseeing progress towards an annualrevenue objective for sales and joint solutions.

� Directors and managers work jointly with theircounterparts in the partner organization to iden-tify, manage, and lead key initiatives in sales, mar-keting, and product development.

Both companies have been diligent about commit-ting and aligning the resources required to achievethe alliance’s objectives.

Both companies have been diligent about commit-ting and aligning the resources required to achievethe alliance’s objectives. The breadth of the relation-ship has been notable, spanning many functions inboth organizations, including professionals in prod-uct development, network, sales, sales support, mar-keting, information technology, and supply chainmanagement. According to Betsy Farley, the direc-tor with responsibility for the management of theSprint/Cisco alliance for Sprint Nextel, “Those em-ployees who partner together generally enjoy work-ing with each other in a collaborative environment,determining how best to leverage the assets of theother organization.”


Cisco’s Mike Perry, director, U.S. Service ProviderChannel Operations, shares Sprint Nextel’s positiveassessment of the alliance, including the results forcustomers. “Combining the talented resources ofboth our teams results in innovative solutions thathave a beneficial impact on our customers. Mostimportantly, our collaboration makes it easier forcustomers to do business with us. They benefit fromour ability to draw on the relationship and establishworking processes to react quickly to their needsand implement the solutions they require.”

The alliance has achieved its success in part be-cause it has not remained static.

The alliance has achieved its success in part becauseit has not remained static. As the relationship hasdeepened over the years, the partners have identifiedand moved to capture new opportunities. The As-sociation of Strategic Alliance Professionals recentlygave the Sprint-Cisco alliance relationship the 2006Individual Alliance Excellence Award, recognizingit for having a “notable material impact for bothparent companies, . . . continu[ing] to evolve from[its] initial form and goals, with executives workingclosely to find new sources of value.”

Organizing for Alliance SuccessResearch has shown that companies with a dedi-cated strategic alliance function achieve higher long-term success rates with their alliances.3 Followingthe merger of Sprint and Nextel in October 2005,the company invested further in the effectiveness ofits alliance program through the formation of theStrategic Alliance organization. The purpose of thefunction is to serve as a bridge between internal or-ganizations of Sprint Nextel and partner organiza-tions to facilitate the flow of information, deploy-ment of resources, decision making, and progresstowards the established alliance goals.

StructureSprint Nextel’s Strategic Alliance function is ledby me as the vice president, Strategic Alliances,who—along with executives responsible for oper-ations, engineering, regional and enterprise/sectorsales, and sales support—reports directly to thepresident of Sales and Distribution. This high-levelreporting relationship gives the function the highvisibility and top-level support necessary for reach-ing across organizational boundaries to request theresources necessary for the alliances’ goals andobjectives.

Reporting to the vice president, Strategic Alliances,are several directors, each responsible for teamscomprised of managers and individual contributors.Each team, in turn, is focused on a group of alliances.

New alliances are assigned to director-level teamsbased on several considerations:

� The alliance’s Platinum or Gold designation� The team’s past affiliations with the alliance or-

ganization� The team’s expertise in the area of the joint part-

nership

Strategic Alliance team members operate under anon-disclosure agreement, as proprietary informa-tion is routinely shared between Sprint Nextel andthe alliance organization in the development of jointsolutions. In the case of an alliance with a companythat is a competitor within the global telecommu-nications marketplace, Sprint Nextel’s Strategic Al-liance team adheres to a “straw man” agreement tonot share confidential information with other SprintNextel alliance teams.

Team MembersSprint has assembled a high-performing team of con-tributors that have extensive experience in teamingwith alliance partners. The members of the StrategicAlliance function and its teams have experience insales, business development, product management,


network, and operations—areas of expertise thatmirror those functions they are most likely to workwith in the Sprint Nextel organization. In additionto their extensive technical knowledge or businessexperience, individuals are also selected for otherimportant attributes, including

� Strong communication and interpersonal skillsfor working across organizational boundaries—across levels, functions, and companies

� A willingness and ability to work in a truly col-laborative environment

� A passionate commitment to the customer and toworking with strategic alliances

Such individuals are a good fit in a function thatstrives to maintain a culture focused on results andon working and winning as a team.

The function’s directors, managers, and individualcontributors develop a broad network of produc-tive relationships as they interact daily with variousSprint Nextel groups—Sales, Engineering, Opera-tions, Network, Marketing—and with employees ofalliance partners.

Membership on a Strategic Alliance team affordsparticipants a unique professional experience.

“My roles and responsibilities provide me the va-riety that I seek,” says Valerie Webster, an ex-perienced telecommunications manager who hasmore than five years of experience in workingwith alliances. “The challenge of identifying, shap-ing, and championing a business opportunity thatultimately is introduced in the marketplace is atrue passion. I have had the opportunity to par-ticipate in developing large-scale projects withleading technologies—projects that I would nothave had the opportunity to participate in if nothaving been engaged in working with strategicalliances.”

ConclusionNaturally, the synergy and strategic fit between part-ner companies will influence the value that a strate-gic alliance can deliver to the partners and theircustomers. However, the value of strategic alliancescannot be fully realized without aligning priorities,defining clear objectives and a clear path to success,committing the needed resources, and establishingkey relationships at every level within an organi-zation and between functional work groups. SprintNextel’s Strategic Alliance function has become anessential ingredient in nurturing the company’s al-liances toward success.

Sprint Nextel measures the incremental revenue de-livered by its alliance relationships as a barometer oftheir success. But the collaborative efforts betweenthe partner organizations also provide substantialreturns to the participants. As Shawn Lamothe, afour-year veteran in working with alliances, putsit, “I truly enjoy when we team together . . . tostrengthen the offering to the customer, resultingin a solution that provides enhanced connectivityor improved productivity.” Delivering technologythat can affect how people live, work, and play is auniquely rewarding endeavor.

Notes1. D. Palmer & P. Mullaney, Building better alliances, Out-look Journal, 2 (2001), 53.

2. J. Weiss, L.J. Visioni, & D. Eaves, The relationship launch:How to fix a broken alliance, white paper [electronic version],(Vantage Partners, 2004), [retrieved 7 March 2007 fromhttp://www.vantagepartners.com/publications/publication.cfm?id=36].

3. J.H. Dyer, P. Kale, & H. Singh, How to make strategicalliances work, MIT Sloan Management Review, (Summer2001), 37–38.

Susan Nelson is the vice president, Strategic Alliances, forSprint Nextel Corporation in Chapel Hill, North Carolina.


strategic alliances are channels for innovation at sprint nextel

Documents