Turnaround of a Failing Alliance: Overcoming Partnering Challenges in Product Innovation

The trading unit unit of a major global company and a software firm created a joint venture to build a new software product intended to address distribution issues and increase supply-chain effectiveness. This would have been the first product of its kind, and a far more effective solution than anything currently available—enabling the global firm to have a lead on its competitors and the software firm to offer a much-needed new product to its customers. But after months of failed efforts, high costs and contention between entities, the joint project was in serious danger of failure. Dialogos helped turn this project around and facilitate its successful delivery—even shortening a complex portion of the project from an estimated 1000 days to an actual 200 days.


Innovation in product development is increasingly being conducted across the “ecology” of organizations—the network of partners, suppliers, customers, and stakeholders who comprise the system of delivery. Yet this approach presents a litany of challenges: of clear and coherent vision, sustained commitment, and the ability to jointly resolve complex problems when they arise.


The initial agreement between the two companies took some years to be finalized, and by the time it was, those who forged it were no longer in their roles. The business unit that took this on had handed it off to another unit, while key software architects had left the company. The project had already taken twice as long and cost twice what was envisioned. A recent launch was widely considered a failure for multiple reasons, while users in the business considered the project a waste of time—arguing that the spreadsheets approach they now used was far more efficient.

To make matters worse, the teams of developers within each partner company were increasingly dysfunctional—treating each other not as partners, but as customer and supplier. The breakdown in communication and effectiveness was evident, and the stakes were high: many technologists worried that failure might compromise their jobs. The business people had already wasted a great deal of money and knew that starting over would cost even more; and the software firm feared both disappointing a major client/partner and losing an important business opportunity.

Dialogos was asked to turn this project around and facilitate its successful delivery. What we did not know was that people within the global business planned to cancel the project within two months if they did not see any significant change.


Dialogos took a disparate and divided group of people—three groups, in fact: IT people and business “customers” at the global business, and software developers at the software company—and transformed them into a unified, high-performing team that defied all expectations and delivered a successful product.

To accomplish this turnaround, Dialogos took several steps:

First, we facilitated agreement among the two principals—the CEO of the software company and the Senior VP now in charge of the agreement—that this was a change they wanted to undertake and would jointly fund, while owning responsibility for their organization’s parts in the difficulties.

Second, we compelled all parties to face the situation by conducting a systems mapping analysis outlining the results they were producing and why. This included bringing all parties together (some of whom had never even met) in a three-day workshop to discuss and understand the issues, which resulted in a strong mutual commitment to work differently.

Third, we reassessed the dynamics of leadership: While the initial agreement was set up as joint venture, the global company IT team treated the software company as a customer instead of working together to serve the company’s business unit. The two software development entities didn’t meet or share information—rendering them unable to agree on which actions to take. Dialogos addressed this by creating an open, transparent process that brought everyone together, with the business leaders acting as a “tie-breaker” and mediator of any impasse that might arise.

Finally, we changed working practices: End users were put in face-to-face meetings with software developers to clarify requirements for completing the project—increasing productivity and reducing administration and meeting time. Also, by creating a single testing process and team free to experiment with innovative solutions—all created by the core team—the project cycle was reduced by several weeks. Unnecessary and unrealistic quality standards were eliminated in favor of user acceptance as standard for measuring success, driving down costs, and increasing software development time.


Together, the teams began to create a whole-system design and new expectations for breakthrough, while shortening a complex portion of the project from an estimated 1000 days to an actual 200 days. People learned to trust each other, work across organizational boundaries, develop a common language and knowledge base, and work with a shared procedure plan and testing database.

Dialogos gave the three teams the tools, context, and structure to solve their own problems, enjoy a strong sense of momentum, and have ample energy to complete the project. In short:

  • We transformed two mistrustful, silo-ed units into a single, cross-organizational team characterized by innovation, mutual trust, collaboration, and rapidly accelerated learning
  • Successful, working software product produced and delivered
  • A system that significantly improves distribution issues and increases supply-chain viability, allowing the business operation to fully migrate from using spreadsheets
  • Widespread adoption of the new system by employees in their daily work
  • A savings of multiple millions of dollars over the cost of the Dialogos contract
  • Developed leadership capacity that has shifted senior leaders’ attention from merely managing the plan to managing the dynamics of the the project and teams

Folllowing the intervention, one of the team members spoke for several of his colleagues with this comment: “I am as big a skeptic as you are ever going to find about the ‘softer’ skills. But I was hugely amazed at what Dialogos was able to accomplish with us. I thought we were beyond saving. So I was hugely impressed by that.”