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Creating a Baseline for Your Alliance Management Practice

January 8, 2024

You know your alliance management team does a good job, but how does it compare against other teams with similar portfolios? Where does it stand relative to the “gold standard” of alliance management? You’d like to benchmark your practice to smartly focus individuals’ professional development, improve the practice, and enhance its role in ensuring your company is seen as a “partner of choice.” What should be measured and evaluated?

Metrics and Key Performance Indicators (KPIs) for alliance managers are notoriously challenging to decide what is meaningful, to gather data, and to credibly report them. Where does one start? By creating a quantifiable baseline tied to frameworks that define the purpose of alliance management and that can be communicated in ways that are meaningful to your key stakeholders. Your purpose is not just to help make the work of alliance management visible. It is also to help stakeholders better understand what makes alliances successful.

Alliance Management as a Capability

The Rhythm of Business has long championed alliance management as an essential organizational capability for life science companies, covering all types of strategic collaborations, not just those related to research, asset development and commercialization. In most companies, alliance responsibilities for other types of collaborations are often siloed, not explicitly assigned, and don’t benefit from the leading practices of alliance management.

To truly benchmark your practice against industry leaders, look beyond the traditional alliance management scope. To conduct a full baseline:

Baseline Components

Baseline Components

  • Inventory the collaborations that should be managed and their management needs
  • Identify individuals who are performing alliance management functions, even if that is not their title and not necessarily in their job responsibilities
  • Assess the sufficiency of alliance management processes, activities, and tools for achieving alliance management’s ultimate objective: Realizing the intended value of the collaboration and preventing the risks and challenges of working in alliances from eroding that value

For alliance management teams that don’t currently have an agreed to metrics framework – which in our experiences are in the majority, regardless of how long they have been established – the best place to start is with evaluating how alliance management is practiced. This is the easiest to assess against proven frameworks. The results are translatable to the language, activities, behaviors, and outcomes that matter to your key stakeholders. That makes a practice baseline the perfect vehicle to use to position the alliance management team more strategically, begin to build the organizational capability, and take tangible actions to improve outcomes.

The Alliance Foundation Model and Seven Habits

Alliance professionals must bridge and unite the strategic with the operational, navigating within and between both planes of activities and decisions. Accordingly, the framework used to create the practice baseline has to include both dimensions. To look at an alliance management practice from a strategic perspective we use our Alliance Management Foundation Model. For an operational perspective, we use the Seven Habits of Highly Effective Alliance Professionals. Taken together, they provide a top to bottom, outside in analysis that is extremely actionable. Both of these models have been published and are readily available to anyone who chooses to use them as their baseline frameworks.[1]

We are often engaged to apply them when alliance management leaders want an independent perspective and comparison to other organizations.

The Alliance Foundation Model

We start with the core purpose of alliance management: to preserve and enhance value while managing and mitigating the risk, including alliance inefficiencies that can erode intended value. We then look at  your context – your company’s strategy, structure, culture, and ecosystem.

Alliance Management Foundation Model

Alliance Management Foundation Model

Once we’ve evaluated how your alliance management practice is managing at this level, we look at the strategic deliverables of alliance management. These include:

  • Purposeful Leadership – Building partnering knowledge and capability by implementing organizationally relevant alliance practices to achieve strategic intent
  • Collaborative Engagement – Aligning internal and external stakeholders through effective communication and managing differences
  • Governance – Strategizing and planning, decision making, business reviews, problem solving, and accountability to drive results
  • Measurable Outcomes – Regular assessment and reporting of the quality of the partnership process, vitality, and outcomes

Evaluating against this framework lets us determine how well the alliance management practice is performing its core responsibilities. As with any benchmark, we compare against data collected from other similar companies – preserving confidentiality – to let you know how you stack up against peers.

The Seven Habits Model

Based on our experiences, observations, and in-depth, quantitative assessments of alliance effectiveness, we’ve distilled the alliance management activities that stakeholders value the most and that preserve and enhance the intended value of an alliance into seven habits. Habits are internalized behaviors we engage in without really thinking about them. They take practice to develop competency in and to build the muscle memory so that they are ingrained and naturally how work gets done.

Used in conjunction with the Alliance Management Foundation, this assessment looks at the activities and behaviors of alliance managers and evaluates how well they align with the activities that deliver value to stakeholders. We summarize that value as “managing the cost of time.” Results can be used to focus activities on those that matter the most and as a guide for the professional development of alliance managers. The habits are:

The Seven Habits Model

  1. Direct focus on enhancing and preserving value; identifying and managing business, human, and legal alliance risks
  2. Manage and engage key stakeholders both within their company and the partner to ensure communication flows and the parties are aligned
  3. Bridge differences between the partners’ strategies, structures, cultures, objectives, and ways of working to find a partnership way of working that meets the needs of each partner
  4. Be the expert on the partner and interpreting those insights to help understand motivations, needs, wants, and behaviors
  5. Resolve problems that can cause delays and suboptimize decisions
  6. Build operational excellence in alliance management policies, practices, and procedures throughout the lifecycle of the relationship, including planning, governance, and communication
  7. Capture and report the progress of the alliance and the impact of the alliance manager’s work to aid stakeholders in producing outcomes

Assessing how effectively and efficiently these seven habits are implemented gives us an operational perspective on how alliance management is being practiced. When coupled with the strategic perspective provided by the Alliance Management Foundation Model, we have a complete and highly actionable baseline against which initiatives can be designed to enhance alliance management capability.

Making Alliance Management Tangible

A core challenge alliance management faces are the misperceptions that lead to those without direct experience believing alliances are easy. That is compounded by the fact that much of an alliance professional’s work happens behind the scenes. Almost all alliance teams need to do a better job in measuring and communicating achievements in ways that are relevant and meaningful to their stakeholders. Make no mistake, this is not to toot your horn, rather it is to help the organization appreciate good partnering behavior, adopt it, and thus be more successful in its alliances.

These frameworks are easily adaptable to any portfolio or set or stakeholders. Once you have your baseline, compare against what the models describe as the gold standard for alliance management and chart your path forward. The benefits are many.

Contact us if you’d like to learn more about conducting a baseline assessment of your alliance management practice.

[1] For the Alliance Management Framework see Biopharmaceutical Alliance Management: Practices, Structure, and Value, https://rhythmofbusiness.com//wp-content/uploads/2023/03/Biopharmaceutical_Alliance_Management.pdf. For the Seven Habits model see Seven Habits of Highly Effective Alliance Managers Who Deliver Value, https://rhythmofbusiness.com/wp-content/uploads/2023/03/Seven_Habits_of_Highly_Effective_Alliance_Professionals_Who_Deliver_Value.pdf

 

 

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