Leadekei founded a logistics company in Marsabit that slowly grew into an innovative firm stretching from Mombasa to Nairobi to Kampala and everywhere in between. He relied heavily on partnerships to stay ahead of the competition.
The best alliances were with technology firms that supported his expansion into digital freight tracking, warehousing providers that enabled his expansive reach, and regional transport operators that guaranteed his on-time deliveries and backup transport when glitches occur.
By 2026, Leadekei started to explore partnerships with a global software provider who claimed that their technological capabilities far outstripped what one could find in East Africa.
While such a new alliance could certainly help his firm and local partners learn, Leadekei hesitated over whether the benefits really outweighed the risks.
He feared that his firm and partners would unknowingly transfer their valuable local and regional insights to the new global partner who could eventually come in and compete directly, all while only receiving small strategic advantages in return.
Many of our Kenyan companies face similar dilemmas as globalisation reaches its tentacles into East Africa and our industries grow increasingly interconnected.
Partnerships can promise access to markets, knowledge, and capital that alone, acting as a single individual firm might struggle to do all on its own.
While many rush to sign memorandums of understanding, what is often less discussed involves the subtle risks that subside under the surface since partners rarely hold identical capabilities, industry or geographical experiences, or even bargaining power.
In fact, when one partner thrives closer to an alliance’s core industry, then, therefore, it has greater knowledge than the other partner, and the potential exists for uneven learning and, therefore, unintended knowledge spillovers.
A brand-new study receiving a lot of international academic attention by Sergio Grove, Brian Fox, Rebecca Ranucci, Manjot Bhussar, and David Souder delves into how companies can design partnerships with specific focuses to manage the above asymmetries that disadvantage one partner over another.
The study analyses a very large dataset of alliances formed over several decades to show that firms consciously and intentionally adjust their alliance structure when partners differ with regard to their distance from the specific industry context.
Partners that feel they will receive unequal knowledge spillovers will often adopt much stronger governance safeguards. Such safeguards include equity-based partnerships, or they can narrowly define the alliance’s activities so that they can protect their own proprietary knowledge, all while still allowing for and enabling a form of collaboration.
In fact, the research highlights that alliances exist not only between two different firms but also within broader industry environments.
One partner, for example, may operate quite closely to the alliance’s knowledge domain, while the other partner may exist further outside and away from the core knowledge and, therefore, create an asymmetric exposure to learning risks.
The partner that is closer to the alliance’s centre of gravity, with the commensurate technological or industry domain, faces a much greater possibility of losing its specialised know-how through the partnership collaboration.
Meanwhile, the further out distant partner usually gains disproportionately from the alliance learning process. Recognising the imbalance early on in a partnership can influence how the firms design their contracts, share their knowledge, create their governance mechanisms, and scope their shared activities.
The study finds that firms frequently utilise an important double safeguarding process whereby companies combine structural safeguards such as equity participation with narrower project scopes to manage both cooperation as well as protection simultaneously.
Read: How real-time tracking, AI are revolutionising Kenya’s logistics sector
The structural choices can allow partners to capture the innovation benefits brought on by the sharing while also limiting the unintended transfer of strategic capabilities that could instead eventually help competitors.
Sadly, most MoUs and partnership agreements are not specific enough to protect the more central partner. Careful design at the formation stage of any alliance should involve clarifying ownership, defining the scope of collaboration, and structuring governance, which can prevent unpleasant outcomes later.
As Kenyan firms increasingly participate in global innovation networks, those that understand how to structure partnerships perceptively will surely capture the benefits of cooperation, all while safeguarding the capabilities that define our East African long-term competitiveness.