As we reach the end of 2015, we can only look back at an amazing year and ahead with giddy anticipation of what 2016 will bring. This is the year we finally hit the tipping point in the transformation of business that first prompted us to begin our journey into the world of partnering – back at the turn of the century. From our vantage point, we are also at a point in time when partnering and alliance practices must change to enable the agility necessary to deliver the omnichannel experience customers require; increasingly viewed by executives as the key basis of competition.
When we began our journey we, and others, were recognizing the potential of the Internet to accelerate advances in communication and information technologies; effortlessly connecting people around the globe; enabling business to be done from anywhere; and upending incumbents in many industries. It became apparent to us that business would never be the same again. Peter Drucker, the preeminent business thinker of the 20th century – the father of management – recognized this, too. In August 2000 he was quoted in Business 2.0, one of the leading publications of the first Internet disruption:
He also said business models will shift from ownership to partnership – and that it will take 25 years. It was music to our ears, as we were in the midst of writing a book exploring exactly that premise – and establishing our mission as a business: to foster understanding of how to lead and manage this transformation and empower people to do so.
As 2015 comes to a close, we are clearly more than half-way to realizing the truth of his prognostication and the technologies of today – cloud computing, mobile technologies, the Internet of Things, and advanced analytics chief among them – are accelerating the demise of traditional business models. Think about it for a minute – GE is now a software company. Google is developing drugs – and cars. The fastest growing transportation company doesn’t own any vehicles.
What we also see is that partnering is integral to most new business models and is becoming pervasive throughout the organization – spreading to the edge of the enterprise. The Internet of Things requires partnering – and often 3, 4 and more partners – to deliver a complete solution to the customer. Pharmaceutical companies are partnering with academia, technology companies, consumer goods manufacturers and patient advocacy organizations to help patients gain and maintain health. CEO surveys now routinely report an expectation that their companies will partner in ways that are essential to strategy and that CEOs had not previously considered.
Of course, partnering is conceptually simple but operationally quite challenging. That is why it is essential for organizations to develop and embed the capability top-to-bottom and throughout the enterprise. In some companies, this is leading to a restructuring of the partnering function. In many, business units and other functions are engaging in partnering activities – and looking to build the infrastructure and develop the capability to do it well. Thus it is also now true that everyone needs some alliance skills.
As a result, we’ve worked on a number of interesting projects that have allowed us to evolve and apply our core alliance frameworks and methodologies in different ways that reflect the realities of where business is going. A few examples include:
Integrating the partnering arm of a multichannel strategy into the existing business. The alliance activity of this financial services provider had grown very fast – but without the necessary intersections and alignment with its direct channel. Together with our partner, Alliancesphere, we applied the SMART Partnering™ methodology to analyze the situation, gain alignment amongst a diverse group of cross-functional executives with competing interests, and develop short and longer-term plans of action that immediately addressed conflict and drove a collaborative problem solving mentality. This boundary crossing approach positions them to rapidly implement their multichannel strategy – which is the driver to evolve their business model.
Analyzing and measuring the collaboration between a biopharma company and its network of KOLs (influential customers). As a result, the company better understands how to engage in the activities that the KOLs most value and how to use this new understanding of value to more creatively and compliantly benefit from their influence. In essence, they have the insight to turn a traditional relationship into one of co-creation with the customer.
Educating alliance team members on how to work effectively with partners. We have always developed and delivered customized training for alliance professionals. 2015 was the year in which that training was primarily aimed at those who need certain alliance skills, but don’t have the alliance management job – or sometimes doing it in addition to their day job. And we did so through both in-person and online formats in a variety of companies. The experiences were profound lessons for us in the value of consistent and comprehensive onboarding processes, the importance of an overarching partnering approach appropriately applied, as well as the need for alliance professionals to focus on basics such as team chartering and operating principles – and to regularly review and renew joint understanding of how an alliance or alliance program works. If partnering is to become part of how business is done, it is essential to ensure the necessary mindset, skillset and toolset are in place, otherwise risk will increase and value will be lost.
Advancing and rethinking the alliance function to align with strategy and structure. Change can be a nasty word in the corporate world, signaling uncertainty. It can also be an opportunity for the alliance function to better align itself with business structure, decision making authority and budgets. We guided initiatives to rethink the alliance function, defining roles, core processes, interfaces and governance in accordance with our three principles, four building blocks and three core skills of alliance management – which transcend “best practices” and evolve it from a toolbox approach to a strategic and value-creating methodology. When it comes to building an alliance function, our goal is to ensure that it is baked in – not bolted on – and prepared to lead as partnering becomes pervasive.
Working with alliance leadership to break through roadblocks. At the end of the day, alliance professionals must convince the executives on their governance committees to change their behavior, leave the conflict behind and go for the gold that everyone knows is there for the taking. Working with alliance leadership, we successfully engaged the cross-functional teams involved in a very complex co-development and co-commercialization global alliance to refocus on a new “North Star.” Representing more than $1 billion in annual revenue, this alliance had lost its way. Our data-rich, metric-based analysis went far deeper and broader than a typical health check, pinpointed root causes and guided leadership in identifying the changes required to ensure the alliance is resilient and able to proactively take on market challenges and opportunities.
It has been an exciting and rewarding year of working across businesses in multiple industries, engaging key stakeholders in the executive suite and within business units in addition to the alliance function to deliver results.
2016 will be a year of growth in many ways. We are particularly engaged in understanding the implications of the digital enterprise and the Internet of Things on partnering models and the roles that companies and individuals play as solutions move from customer needs to upstream development, often in a multiparty environment, and are then deployed to customers in specific situations and scenarios, nearly always requiring multiple partners. We’re also focused on understanding the partnering models that are needed to drive the shift to outcomes-based healthcare and maximize the potential of new technologies to create new therapies for life-altering and threatening diseases.
This is the brave new world of partnering today – the glue and enabler that makes all that has become technically possible realistically feasible and economically viable. Our job is to help develop and drive the knowledge, skills, and practices that are required to fully integrate partnering into the core of an organization’s strategy, operations, and culture to allow it to evolve and innovate its business.
Our mission endures and our journey continues.