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Measuring What Matters Creates Winners

How do you know if your alliance or business partnership is operating effectively? Sure, revenue is a gauge, as well as hitting key development milestones. It still doesn’t tell you if the partners are productively leveraging the resources available to the alliance, or if it is operating in an environment built on mutual trust and respect, focused on innovating and producing results.

Alliances are inherently inefficient and it is the job of the alliance professionals managing the alliance to preserve and enhance the value intended when entering into the collaboration, while identifying and mitigating the risks that can cause it to fall short of its potential.

Vital Signs infographicTo measure if an alliance is operating effectively, many years ago we created the VitalSigns Alliance Operations Effectiveness Assessment (See Figure 1). In a demonstration that measuring effectiveness can contribute to alliance success, the XTANDI alliance of Astellas and Pfizer recently won the 2021 ASAP Alliance Excellence Award for a Longstanding Alliance. In accepting the award, the alliance directors credited the role regularly measuring effectiveness as part of a program of continuous improvement plays in the alliance’s success. Our congratulations to the winners! They have worked very hard over many years to ensure the alliance is producing maximum value for patients and the partners.

Measuring Effectiveness

Most likely you are familiar with an alliance “healthcheck,” a standard measurement tool used to assess a partnership. It measures “fit” and “alignment.” It does not measure effectiveness which is what tells you if the alliance is overcoming the inefficiencies that frequently result in delays in decision making or suboptimized decision making, lack of accountability, duplication of work, and divergent directions given to teams. These and other indications of ineffective alliance operations lead to underperformance.

It may still be true that the teams are meeting milestones and forecasts even when an alliance is not operating as effectively as it could. What’s hidden are the sub-optimized decisions—the failure to push the envelope and to innovate—that occur when teams that are tired of fighting take the easy road. Timelines get extended to account for the inevitable delays. Trial designs are overly conservative. Sales forecasts are understated to be sure they are met. These may not be obvious if agreed goals are being achieved, but in moments of reflection, alliance leadership acknowledges it to be true, accepting it as just the inherent inefficiency of alliances.

We often find that the cause of partners encountering delays in decision making is that they are falling victim to the “conviction curve.” They establish positions in their pre-governance internal alignment meetings and then butt heads, encounter delays, and ultimately compromise on something no one is happy with. In the meantime, valuable patent time is lost and a competitor may advance. You can be sure the issue that was not resolved in the compromise will surface again and do further damage!

When data highlights this blocking dynamic, it is easier for the partners to see that they need to evolve their operating model to more actively collaborate and create alliance solutions from the start. Analysis of the comprehensive data we collect may point to a lack of empowerment of the Joint Steering Committee (JSC), overlapping membership on committees, or conflicting goals, to name but a few contributing factors and potential causes of stalemate. This insight is not apparent in the more limited healthcheck, which typically only tells you decisions aren’t getting made timely. You already know that! An effectiveness assessment helps you understand why that is happening.

Taking Action

When you have data pointing to cause, it is much easier to develop an action plan that has real impact. You can target a redesign of the collaboration model, take steps to control non-member attendance and participation in governance committee meetings so that discussions are more robust, and plan decisions to align with internal governance so that alliance governance is not overturned by internal governance.

The action plan is the key to moving the alliance forward. The XTANDI alliance has been diligent in building an alliance-wide action plan, endorsed by the JSC and overseen by the alliance directors to act upon the results of each assessment over the life of the alliance.

A tool that we use for gaining alignment amongst the JSC is a Collaborative Leadership Agenda. It uses the data from the VitalSigns Assessment to distill the principles the alliance should follow to achieve its objectives, together with the leadership behaviors teams should implement. The framework in Figure 2 is likely 80% of what any complex biopharma alliance considers goodness. The specifics will come from the assessment results, workshopping with the JSC, and then cascading to the other committees.

These principles and behaviors won’t be adopted on their own. Action plans must be developed, owners identified, and regular reporting and evaluation established to get to demonstrable improvement in the next assessment of alliance effectiveness.
A program of continuous improvement and a commitment to operational effectiveness is exactly what the XTANDI alliance has done since inception, producing meaningful benefit for patients and valuable outcomes for the partners.

Measuring what matters does indeed create winners in many ways.

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