When collaboration is central to strategy, alliance management must be an organizational capability. Part of that evolution is expanding focus from individual alliances to alliance portfolios. A portfolio is simply a grouping of items that share a similar characteristic. In the case of alliance portfolios, that similarity is the strategy the alliances and other business collaborations are intended to achieve.
As such, a portfolio should be based on its strategic anchor, the specific strategic intent – also known as its North Star – of all types of strategic partners envisioned in the strategy whether they are one-to-one collaborations or include multiple partners. For example, a portfolio might be based on the strategy of an individual therapeutic area or it might be leveraging a modality such as gene therapy across multiple therapeutic areas.
Think of this expanded focus for alliance management as zooming out to the portfolio and zooming in on individual alliances (or relevant groupings of partners). When zooming out, your perspective is on realizing the overall value the strategy needs from partners. You’re able to classify and organize the individual partnerships in the portfolio and develop baseline management strategies for each classification. Scarce alliance management resources can be smartly allocated and systemic issues identified. A portfolio perspective is essential to evolving alliance management into the organizational capability required today.
Zooming in assesses whether or not a specific collaboration is producing intended value. It identifies potential opportunities to create value with individual collaborators in many ways. It might come from identifying new opportunities, ensuring executives have all the information they need to make value-creating decisions, or focusing in on specific causes of complexity and risk. The alliance professional can then take targeted actions.
This paper is an update to our Value/Complexity Partner Portfolio Management methodology introduced in 2012 and included in Part 3 of the 2014 ASAP Handbook of Alliance Management: A Practitioner’s Guide, as an emerging practice. Over the intervening years, we’ve implemented the methodology with numerous companies and updated it to reflect not just our learning, but also how the business of managing alliances and other business collaborations has evolved.
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