Research from Boston Consulting Group and McKinsey shows that successful partnerships require clear economics, governance and accountability. Growth executive Muge “Emma” Cody examines what those findings mean for leaders turning strategic relationships into measurable value.
Muge “Emma” Cody
Between 60 and 70 percent of alliances fail to achieve their intended outcomes, and 60 percent dissolve within four years, according to “Nonequity Alliances Need Smart Governance,” published by Boston Consulting Group (BCG) in July 2025. The same research found that alliances built on a few governance fundamentals succeed about 80 percent of the time, roughly double the average.
For growth executive Muge “Emma” Cody, the distance between those two numbers points to a distinction leaders often blur. Forming a strategic relationship and building a business model around it are different disciplines. Trust matters. Relationships matter. But neither defines how the partnership creates value. That requires structure.
Partnerships are becoming a strategic instrument
The shift is measurable. In “The Quiet Reinvention of Joint Ventures and Alliances” (September 2025), BCG found that while M&A activity has trended downward since 2017, joint venture and alliance volumes have proved more resilient.
Their purpose is changing as well. Partnerships once concentrated on manufacturing and marketing are increasingly being built for supply chain resilience and shared risk, a trend most visible in retail and health care.
Investors appear to recognize the shift. BCG found that more than half of joint venture and alliance announcements generated positive abnormal returns around announcement. More recently, joint ventures have received stronger market reactions than traditional acquisitions, reversing the historical pattern, although results vary by industry.
Part of the attraction is flexibility. A partnership can provide access to technology, markets or infrastructure without the capital commitment and integration of an acquisition.
For Cody, that leads to a fundamental executive question: What does the company actually need to own?
A capability can be strategically important without requiring ownership of the company that provides it. Ownership is one strategic instrument. Partnership is another. The decision should follow the objective.
Experience matters
BCG’s research also found that companies that partner repeatedly tend to perform better at it. Joint ventures executed by serial dealmakers produced median one-year relative total shareholder returns approximately 0.4 percentage point higher than those of first-time participants, with a larger difference for ventures creating new entities.
The organizational finding may be more important. BCG notes that active partnership companies including Merck, Lilly, Pfizer, TotalEnergies, Saudi Aramco and BP maintain dedicated partnership or joint venture teams separate from their M&A organizations.
The distinction makes sense operationally. An acquisition establishes control. A partnership asks two organizations to create value together while each remains independent. They can agree on the strategy and still disagree on investment, customers, intellectual property, data or timing.
Cody sees partnership management as a distinct executive capability. The agreement creates the relationship. The operating model makes it work.
The economics come before the agreement
BCG’s July 2025 research identifies three foundations of effective alliance governance: agreement on objectives, an economic model for creating and sharing value, and clearly defined responsibilities and decision rights.
Partners may contribute very different assets, from technology and intellectual property to manufacturing, distribution, customer access or capital. The structure has to establish what each contributes, how those contributions create value and how that value will be shared. For Cody, this is where strategic intent becomes commercial design.
The rationale explains why the companies belong together. The economic model explains why they should stay together. That means clarity on contributions, economics, customer ownership, data, intellectual property and decision rights before the agreement is signed.
Ambiguity can make an agreement easier to sign. It rarely makes a partnership easier to operate.
Trust and structure are complements
Structure does not replace relationships. In “Partners in Profit: Creating Successful Business Alliances” (January 2020), McKinsey identified clear objectives and strategy, along with communication and trust, among the most important foundations of successful partnerships. Governance and performance tracking also ranked prominently.
The findings reject a false choice between relationships and structure. Trust helps partners resolve issues that no contract can anticipate. Structure gives them a basis for resolving those issues when their interests diverge. And divergence is inevitable.
Markets change. Leadership changes. Investment requirements change. Strategies evolve. In the same McKinsey discussion, researchers noted that four out of five alliances deemed successful had gone through at least one restructuring.
A partnership therefore has to be designed not only to launch, but to adapt. As Cody sees it, a strong relationship helps executives have the difficult conversation. A strong structure helps them resolve it.
A partnership needs a scoreboard
One of the easiest mistakes is allowing activity to become evidence of progress. The executive calls continue. Teams meet. Opportunities are discussed. Both companies remain committed. None of that establishes whether the partnership is creating value.
McKinsey has documented the measurement problem for years. Its 2002 article “Measuring Alliance Performance” reported that fewer than one in four alliances had adequate performance metrics. In its 2020 work on partnership health, McKinsey again emphasized regular assessment of strategy, operations, governance and economics.
For Cody, the implication is straightforward: every partnership needs a scoreboard. The measure depends on why the partnership exists. It may be incremental revenue, market access, new capability, faster development, lower cost, shared investment or reduced risk. The metric can vary. The requirement to measure it should not.
The scoreboard also needs a keeper. BCG and McKinsey both emphasize clear decision rights, and Cody takes that to its practical conclusion: one executive on each side whose own performance review reflects the partnership’s results, and a partnership held to the same discipline as any other strategic investment.
The eighteen-month test
Many partnerships begin the same way. Two companies announce the deal. There is a press release, a pairing of logos and a regular executive cadence. Eighteen months later, the relationship remains strong and the meetings are productive. What is less clear is what the partnership has produced.
For Cody, this is where the original design becomes visible. A well-structured partnership can show the value it has created, the economics behind it and the executives accountable for the result. If those things remain unclear, the problem may not be execution. The partnership may never have been structured to deliver them.
A partnership earns its place in the strategy by creating value neither company would have created as effectively alone. Everything else is a relationship.
