Monday
Jan102011

How Alliance Management Delivers Value: Moving Beyond Best Practices

PDF Icon

Alliances and other forms of collaboration are an integral component of strategy. In some companies, they account for more than 50 percent of revenues and new products. Entire business processes are being entrusted to partners. As a result, it has never been more important for an organization to manage these relationships well. The costs of not doing so, which can include arbitration and litigation, stalled development efforts and lost time to market, as well as an inability to compete for desirable assets, are simply too great to ignore.

Click to read more ...

Wednesday
Dec012010

The Practice of Alliance Management in the Biopharmaceutical Industry - Complete Whitepaper

PDF Icon

An executive summary is also available.

Alliance Management at a Crossroads - The Whitepaper

The profession of alliance management has had a growing presence in the biopharmaceutical industry for more than a decade. Today, as the industry undergoes gut-wrenching change due to many varied factors, alliances and collaborations have become an essential strategic tool for financing and conducting innovation and growth. In many companies, alliances generate more than half of both revenue and product pipeline. However, partnering brings specialized management challenges. Alliances require crossing traditional boundaries and integrating activities, resources, cultures, risk profiles, and ways of working to achieve results. Alliances share risks and costs. They provide access to customers, markets and capabilities. They are a discrete scope of business: virtual entities that co-exist within the businesses of at least two companies.

With this backdrop, it would stand to reason that investing in an alliance and collaboration management capability would be a priority for companies. If their businesses are dependent on collaboration, it would make sense to put resources towards developing competence in this area. The evidence, however, shows this is not the case.

The results of the inaugural 2010 Practice of Alliance Management in the Biopharmaceutical Industry conducted by The Rhythm of Business show that the majority of alliance management groups remain small, usually three to five people. Those three to five people might manage anywhere from one to five alliances each. Most commonly, each person manages two or three alliances. When alliance groups are larger, the tendency is for each individual to handle more alliances, accounting for portfolios whose size and complexity outpace the size of the group.

This scenario often results in one of three conditions, usually found in some combination:

  • Some alliances within the corporate portfolio are not being managed
  • Individuals who have other functional responsibilities, such as product, project or program management, find themselves also responsible for managing alliances
  • Alliance managers relinquish key responsibilities over time to accommodate a growing and/or increasingly complex portfolio

Any of the three conditions may result in an underperforming alliance portfolio. The challenge for alliance management executives is to ensure that the structure, organization, staff, role and accountability of the alliance management capability are optimized relative to the company’s portfolio so that all alliances are appropriately managed. Alliance managers must be able to refocus efforts and resources as the portfolio grows and becomes more complex. Given the current business challenges of the industry, they must do so with limited, if any, additional resources.

The discipline of alliance management is at a crossroads. It has to get creative about how to innovate itself and take charge of realigning the resources available to manage alliances and collaborations, including the functional managers who also have responsibility for their respective collaborative relationships. It can elevate and promote alliance management as a recognized capability essential to achieving corporate goals. Or it risks becoming marginalized if the alliance portfolio underperforms and alliance management loses influence.

Download the PDF or visit our Issuu library where slides are also available.

Monday
Nov012010

The Practice of Alliance Management in the Biopharmaceutical Industry - Executive Summary

PDF Icon

The complete whitepaper is also available.

Alliance Management at a Crossroads

The profession of alliance management has had a growing presence in the biopharmaceutical industry for more than a decade. Today, as the industry undergoes gut-wrenching change due to many varied factors, alliances and collaborations have become an essential strategic tool for financing and conducting innovation and growth. In many companies, alliances generate more than half of both revenue and product pipeline. However, partnering brings specialized management challenges. Alliances require crossing traditional boundaries and integrating activities, resources, cultures, risk profiles, and ways of working to achieve results. Alliances share risks and costs. They provide access to customers, markets and capabilities. They are a discrete scope of business: virtual entities that co-exist within the businesses of at least two companies.

With this backdrop, it would stand to reason that investing in an alliance and collaboration management capability would be a priority for companies. If their businesses are dependent on collaboration, it would make sense to put resources towards developing competence in this area. The evidence, however, shows this is not the case.

The results of the inaugural 2010 Practice of Alliance Management in the Biopharmaceutical Industry conducted by The Rhythm of Business show that the majority of alliance management groups remain small, usually three to five people. Those three to five people might manage anywhere from one to five alliances each. Most commonly, each person manages two or three alliances. When alliance groups are larger, the tendency is for each individual to handle more alliances, accounting for portfolios whose size and complexity outpace the size of the group.

This scenario often results in one of three conditions, usually found in some combination:

  • Some alliances within the corporate portfolio are not being managed
  • Individuals who have other functional responsibilities, such as product, project or program management, find themselves also responsible for managing alliances
  • Alliance managers relinquish key responsibilities over time to accommodate a growing and/or increasingly complex portfolio

Any of the three conditions may result in an underperforming alliance portfolio. The challenge for alliance management executives is to ensure that the structure, organization, staff, role and accountability of the alliance management capability are optimized relative to the company’s portfolio so that all alliances are appropriately managed. Alliance managers must be able to refocus efforts and resources as the portfolio grows and becomes more complex. Given the current business challenges of the industry, they must do so with limited, if any, additional resources.

The discipline of alliance management is at a crossroads. It has to get creative about how to innovate itself and take charge of realigning the resources available to manage alliances and collaborations, including the functional managers who also have responsibility for their respective collaborative relationships. It can elevate and promote alliance management as a recognized capability essential to achieving corporate goals. Or it risks becoming marginalized if the alliance portfolio underperforms and alliance management loses influence.

Download the PDF or visit our Issuu library.

Friday
Aug272010

The Downside of Flexibility as a Currency

PDF Icon

Alliances have long been a part of company strategy. In many industries, alliances account for more than half of revenues and new products. Within biopharmaceuticals, alliances have become an essential strategic tool as the cost and risk of developing new medicines has increased and the patent cliff looms. This heightened pursuit of new sources of innovation and growth through alliances and other forms of collaboration has magnified competition for deals in industry after industry, resulting in a beauty contest atmosphere in which company after company positions itself as “The Partner of Choice.” To make their companies more desirable than other contestants, increasingly, licensing and business development executives pursue their partnering efforts with a mindset of:

  • Willingness to do deals they or others may have previously passed up
  • Great flexibility and innovativeness in agreements and terms
  • Significant sharing of finances, responsibilities, decision making, and risks

Not surprisingly, the strategy of using deal flexibility as a currency has worked. In fact, one might say it has worked too well. Deals are certainly being done and licensing and business development professionals rewarded based on deal flow are quite happy. However, that is a very different metric than measuring how many alliance deals actually achieve successful outcomes and enable all parties to realize the value they seek from the deal. Unfortunately, despite their promise at the time the deal is signed, too many alliances aren’t successful. Studies conducted by McKinsey and others have shown that fewer than 50 percent of alliances achieve their objectives.

There are many reasons for alliance failure. Digging deeper into the situation, one finds that the flexibility the pursuer is willing to grant in making a deal can result in a significant increase in the level of risk due to the complexity of actually managing the alliance once launched. Risk and complexity are the enemies of value.

Download the PDF or visit our Issuu library to read the full article.

Tuesday
Jun012010

Collaborating to Win: Measuring Collaborative Ability

PDF Icon

Today collaboration is vital because organizations realize they can no longer go it alone. To survive and prosper in today’s globally networked economy, organizations know that they must bridge their structural silos and successfully collaborate both internally and externally. Collaboration is no longer an option; it is a requirement for innovation and growth.

Yet as collaborative capability becomes more the imperative, organizations continue to have difficulty making collaboration successful over the long term. Does this mean that, while collaboration works in theory, it can’t be practically applied? Not at all. But the question does strike at the heart of the problem, which is that collaborative relationships by definition are always between the individual people who interact. Thus, a relationship between two or more organizations is really the result of individual relationships between and among the people in the different organizations who are tasked with collaborating. And that’s when the challenge begins—in the building of all those grassroots collaborative working relationships.

A clear sign that a skill or ability is valuable is when it begins to find its way into the competencies used to evaluate employee performance. Such is the case today with collaboration. When practiced appropriately, collaboration is a set of behaviors—a way of working that involves coordinating specific activities and communicating certain information to leverage resources in the purposeful pursuit of objectives. It requires an environment of trust and transparency. Collaboration opens up the possibility of accessing the resources, knowledge, and relationships other people and organizations have and using each party’s resources for mutual benefit. It also introduces the rather chilling prospect of counting on someone who has no stake in your success. Thus, collaboration is a sophisticated ability that depends on much agility in utilizing a range of skills through an iterative process of achieving desired outcomes.

Download the PDF to read the full paper, including a longitudinal case study of collaboration in the pharmaceutical industry.

Page 1 ... 3 4 5 6 7 ... 14 Next 5 Entries »