Alliance transformation webinar
Transcript of Alliance transformation webinar
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Transforming
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1Copyright © 2012 by Vantage Partners, LLC. All rights reserved.
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2Copyright © 2012 by Vantage Partners, LLC. All rights reserved.
About Vantage Partners
� Expertise in building organizational negotiation and
relationship management capability
� Over twenty-five years of experience training and
consulting to Global 500 companies
� Recognized thought leaders
√ Three-year study on Alliance Management
√ Cross industry study of SRM best practices
√ Instructors at Harvard, Tuck and West Point
√ Authors of Getting to YES: Negotiating Agreement
Without Giving In & Difficult Conversations: How
to Discuss What Matters Most (New York Times
bestsellers)
√ Authors of articles in the Harvard Business Review and
Sloan Management Review
� Leaders in international dispute resolution through
CMG Conflict Management Group
√ New Constitution in South Africa
√ Arias Peace Accords in Central America
� Discuss together what transformation is, what triggers it, and
what Alliance Management’s role is
� Share some case studies illustrating best practices with respect to
alliance transformation
Today’s webinar
3Copyright © 2012 by Vantage Partners, LLC. All rights reserved.
� When you hear the term “Transformation” what do you think of?
(click all that apply)
� Putting in place new operating protocols on an alliance
� Re-structuring and / or re-staffing the governance structure
� Terminating an alliance
� The film Transformers – Robots in Disguise
Poll
4Copyright © 2012 by Vantage Partners, LLC. All rights reserved.
All of the above!
Correct answer?!
Copyright © 2012 by Vantage Partners, LLC. All rights reserved. 5
� Transformation: creating a new strategic and operational
context for an alliance
� May include:
� Changes to governance structure or membership
� New strategic direction for the alliance
� New or revising sets of operating protocols
� Alliance termination
� Effective transformations are efficient and collaborative, with a
focus on preserving the working relationship
What is transformation?
Copyright © 2012 by Vantage Partners, LLC. All rights reserved. 6
� Transition in the lifecycle of the alliance, e.g. from development
activities to commercialization
� Significant changes in personnel at either company
� A merger or acquisition impacts the structure and resourcing of
one partner
� Technical failure
� The business case is impacted by changes in the marketplace or
legal or regulatory rulings
� Alliance dysfunction sub-optimizes performance
� Poor health check results indicate a need for change
Why transform?
7Copyright © 2012 by Vantage Partners, LLC. All rights reserved.
� Anticipate or identify jointly with the alliance partner when
transformation might be necessary
� Facilitate discussion and a decision on how the alliance might
change
� Drive creation of an implementation plan that will adapt the
alliance appropriately
� Drive execution of that plan
� Check in on the status of the alliance post-transformation as
appropriate
Alliance Management’s role
Copyright © 2012 by Vantage Partners, LLC. All rights reserved. 8
For those anticipating some type of transformation on their
alliance, what do you think will cause the need to transform?
� Transition in the lifecycle of the alliance, e.g. from development activities
to commercialization
� Significant changes in personnel at either company
� A merger or acquisition will impact the structure and resourcing of one
partner
� Technical failure
� The business case will be impacted by changes in the marketplace or legal
or regulatory rulings
� Alliance dysfunction will sub-optimize performance / a recent health check
suggests a need for change
Poll
9Copyright © 2012 by Vantage Partners, LLC. All rights reserved.
Managing Transformation: Case Studies
� After settling a highly contentious litigation, the alliance was
left battered and with a new product to include going forward
� There was a deep lack of trust on the alliance at every level of
the governance structure
� Inclusion of a new product in the alliance created open
strategic issues as well as a need to develop and operationalize
new information-sharing agreements
Case Study 1:
Reviving an alliance post-litigation
Case
Study 1
Case
Study 2
Case
Study 3
Case
Study 4
Copyright © 2012 by Vantage Partners, LLC. All rights reserved. 11
Alliance was plagued by deeply held
partisan perceptions
Some at ACME believe MetCo…Some at ACME believe MetCo…
� Is greedy and risky
� Is unduly critical, without the expertise
and experience to back up their
assertions
� Over-inflated the value of certain
markets
� Received a disproportionate amount of
value in the settlement (i.e., that MetCo
“won” and ACME “lost”)
� Acts out of financial motivations and
not with the consumer’s best interests
in mind
� Lacks integrity
� Is greedy and risky
� Is unduly critical, without the expertise
and experience to back up their
assertions
� Over-inflated the value of certain
markets
� Received a disproportionate amount of
value in the settlement (i.e., that MetCo
“won” and ACME “lost”)
� Acts out of financial motivations and
not with the consumer’s best interests
in mind
� Lacks integrity
Some at MetCo believe ACME… Some at MetCo believe ACME…
� Is too bureaucratic and conservative
� Over-inflates its own internal expertise,
and is unwilling to listen to viewpoints
from MetCo
� Doesn’t appropriately prioritize the
alliance within its portfolio
� Deliberately hides information and puts
up hurdles to activities and decisions
that they do not support
� Wasn’t truthful about the development
of [Product]
� Lacks integrity
� Is too bureaucratic and conservative
� Over-inflates its own internal expertise,
and is unwilling to listen to viewpoints
from MetCo
� Doesn’t appropriately prioritize the
alliance within its portfolio
� Deliberately hides information and puts
up hurdles to activities and decisions
that they do not support
� Wasn’t truthful about the development
of [Product]
� Lacks integrity
Case
Study 1
Case
Study 2
Case
Study 3
Case
Study 4
Copyright © 2012 by Vantage Partners, LLC. All rights reserved. 12
Final
Report
Out
End of
June
Final
Report
Out
End of
June
Solution:
Re-launch alliance over a six month period
Core Re-Launch ActivitiesJan. - June
Within and Across Internal andJoint Committees and Teams
Key Short-Term Activities
� Operationalize governance structure� Kick off the partnership and
conduct contract briefing
� Re-form governance committees; conduct initial meetings
� Kick off data exchange working group
� Relationship diagnostic� Conduct broad and deep
interviews of individuals in both ACME and MetCo
� Define relationship needs and identify key challenges
� Develop recommendations
� Develop overarchingre-launch plan
Vision and GoalsVision and Goals
Monitor and OptimizeJuly – Dec
MetCo and ACME are well-equipped to:
� Resolve complex issues
� Find efficiencies
� Continue enhancing relationships and operations
� Assess progress and course-correct
Governance / Decision-MakingGovernance / Decision-Making
Joint Planning & ScorecardingJoint Planning & Scorecarding
Working Together Protocols and IncentivesWorking Together Protocols and Incentives
Internal AlignmentInternal Alignment
Relationship Issue Resolution /Skill DevelopmentRelationship Issue Resolution /Skill Development
Electronic Collaboration SpaceElectronic Collaboration Space
Case
Study 1
Case
Study 2
Case
Study 3
Case
Study 4
Copyright © 2012 by Vantage Partners, LLC. All rights reserved. 13
� It isn’t just about the people! Re-staffing the governance structure was a
critical first step, but not sufficient by itself. Essential to re-operationalizing
the alliance:
� Re-chartering committees
� Aligning on committee and team goals
� Implementing operating norms, was essential as well
� Alliances need leadership. Empowering governance committees to act as
true leaders on the alliance, and ensuring they provide clear expectations,
while even using informal incentives to inspire collaborative behavior, was
effective
� A re-launch isn’t just a meeting. The full re-launch needed to be viewed as
a process, with a defined period of time, a set of deliverables and activities,
and a group of people responsible for overseeing and owning the effort
Key takeaways
14Copyright © 2012 by Vantage Partners, LLC. All rights reserved.
Case
Study 1
Case
Study 2
Case
Study 3
Case
Study 4
� An alliance between a European-based pharmaceutical company and a US-
based biotech was approaching commercialization, but there was a sense
of malaise and some underlying frustrations. The Alliance Managers didn’t
feel a full-blown re-launch was necessary or warranted, but wanted to
understand why there was a lack of enthusiasm and a general sense of
frustration
� To better understand the lack of enthusiasm the team conducted a health
check. Results confirmed the feelings of detachment and, in addition,
brought to light additional challenges that had been creating frustration
� The health check survey results, combined with follow-up conversations
with key stakeholders, also allowed the Alliance Managers to develop a set
of specific recommendations going forward. These were presented at a
“Refresh Meeting”
Case Study 2:
Refreshing an alliance
Case
Study 1
Case
Study 2
Case
Study 3
Case
Study 4
Copyright © 2012 by Vantage Partners, LLC. All rights reserved. 15
Category
TotalAverages
CommitteeAverages
Working GroupAverages
ACME BigPharma ACME BigPharma ACME BigPharma
1. Strategic Value 4.87 3.93 4.67 4.15 5.06 4.21
2. Value Enhancement 4.34 4.04 4.22 4.25 4.12 3.35
3. Relationship Quality 4.32 3.88 4.50 4.30 4.14 3.22
4. Operational Effectiveness 4.18 3.88 4.11 3.86 4.17 3.18
Health check results and quotes
“Decisions seem to have been slow in coming
forward. This may be due to differences in
internal governance and structure. ”
“The committees seem to make decisions without all the right information – it’s the working group members that are the experts!”
“We need to build an understanding of the partner’s organization structure and how all the parts fit together.”
“It isn’t clear how we’re making decisions,
and sometimes it isn’t even clear what the
decision is!”
Case
Study 1
Case
Study 2
Case
Study 3
Case
Study 4
Copyright © 2012 by Vantage Partners, LLC. All rights reserved. 16
Some key challenges and
recommendations identified
Challenge Recommendation
Lack of clarity around how decisions are
made on the alliance
Clarify and determine decision-making roles for all
key decisions, and publicize the roles of different
committees and teams on the alliance SharePoint
site
Perception that BigPharma’s internal
organization is overly complex and
slows down work on the alliance
Provide an overview of each organization’s
governance structure, and clarify the extent to which
internal consultation needs to occur on alliance
decisions so that the time needed to do so can be
taken into account and planned for
Sense that committees make decisions
without fully leveraging subject matter
experts on the working teams
Provide a presentation on each organizations subject
matter expertise and develop a process for review of
all key deliverables and decisions so that expertise is
fully leveraged
Case
Study 1
Case
Study 2
Case
Study 3
Case
Study 4
Copyright © 2012 by Vantage Partners, LLC. All rights reserved. 17
� Yearly check-ups keep you healthy! Even though there were no
apparent, serious problems on the alliance, a health check helped
identify underlying issues that, if not addressed, may have
impacted execution going forward
� Don’t fix what isn’t broken. A full re-launch isn’t the only way to
help an underperforming alliance. In this case, identifying a few
acute issues and addressing them was all it took to make an
impact
� Simply getting the alliance team together, with the alliance
leadership, and having leadership emphasize the importance of
the work was enough to re-build excitement
Key takeaways
18Copyright © 2012 by Vantage Partners, LLC. All rights reserved.
Case
Study 1
Case
Study 2
Case
Study 3
Case
Study 4
� Following regulatory action, the strategic focus of a co-marketing
alliance changed to exclude one key product, leaving a product
for which the patent was to expire in 18 months
� The quality of the alliance relationship felt less critical (and
alliance had become significantly less valuable for one partner).
At the same time, there was still significant value to be extracted
from the relationship prior to termination
� A small task force was convened to review the latest health check
and make some moderate, easily implementable steps
� Scorecard with key operational goals
� Relationship protocols
Case Study 3:
Living in a terminal alliance
19Copyright © 2012 by Vantage Partners, LLC. All rights reserved.
Case
Study 1
Case
Study 2
Case
Study 3
Case
Study 4
Cross the finish line together!
Copyright © 2012 by Vantage Partners, LLC. All rights reserved. 20
� Give your partner something good to remember you by! Partners
were motivated to terminate on good terms out of interest in
possible future partnering opportunities
� Even when an alliance is at the end of its life, resources devoted
to enhancing the collaboration can make an impact — the
partners took a critical look at what was implementable given
limited resources, and this made a difference
� Don’t ignore your alliance when it’s most in need! Termination
activities themselves can create a need for close alignment and
joint conflict management approaches
Key takeaways
21Copyright © 2012 by Vantage Partners, LLC. All rights reserved.
Case
Study 1
Case
Study 3
Case
Study 2
Case
Study 4
� A large pharmaceutical company with over 90 alliances, both development
and commercial, regularly reviewed and reprioritized its portfolio of
alliances, often resulting in a need to terminate some alliances. The
company had no systematic way of actually transforming those alliances,
leading to drained resources and wasted time
� There was no consistent approach to making the determination to
transform and implementing the transformation
Case Study 4:
Building the capability to transform alliances
22
Case
Study 4
Case
Study 2
Case
Study 1
Case
Study 3
Dimension Category Metric Sub-metric Metric Value Target Trend Status
Strategic Value
Joint and Individual
strategy / objectives
Innovation
Strategic fit
Partner survey:
Strategic value
Financial Value
Value
Revenues
Costs
Partner survey:
Financial value
Partnership Capability
Governance
Partner survey:
Partnership Capability
Partner survey:
Partnering Image
Operational
Effectiveness
Timelines
Quality
Partner survey:
Operational
Effectiveness
Alliance Z scorecardDimension Category Metric Sub-metric Metric Value Target Trend Status
Strategic Value
Joint and Individual
strategy / objectives
Innovation
Strategic fit
Partner survey:
Strategic value
Financial Value
Value
Revenues
Costs
Partner survey:
Financial value
Partnership Capability
Governance
Partner survey:
Partnership Capability
Partner survey:
Partnering Image
Operational
Effectiveness
Timelines
Quality
Partner survey:
Operational
Effectiveness
Alliance Z scorecard
Dimension Category Metric Sub-metric Metric Value Target Trend Status
Strategic Value
Joint and Individual
strategy / objectives
Innovation
Strategic fit
Partner survey:
Strategic value
Financial Value
Value
Revenues
Costs
Partner survey:
Financial value
Partnership Capability
Governance
Partner survey:
Partnership Capability
Partner survey:
Partnering Image
Operational
Effectiveness
Timelines
Quality
Partner survey:
Operational
Effectiveness
Alliance Y scorecardDimension Category Metric Sub-metric Metric Value Target Trend Status
Strategic Value
Joint and Individual
strategy / objectives
Innovation
Strategic fit
Partner survey:
Strategic value
Financial Value
Value
Revenues
Costs
Partner survey:
Financial value
Partnership Capability
Governance
Partner survey:
Partnership Capability
Partner survey:
Partnering Image
Operational
Effectiveness
Timelines
Quality
Partner survey:
Operational
Effectiveness
Alliance Y scorecard
Dimension Category Metric Sub-metric Metric Value Target Trend Status
Strategic Value
Joint and Individual
strategy / objectives
Innovation
Strategic fit
Partner survey:
Strategic value
Financial Value
Value
Revenues
Costs
Partner survey:
Financial value
Partnership Capability
Governance
Partner survey:
Partnership Capability
Partner survey:
Partnering Image
Operational
Effectiveness
Timelines
Quality
Partner survey:
Operational
Effectiveness
Alliance X scorecardDimension Category Metric Sub-metric Metric Value Target Trend Status
Strategic Value
Joint and Individual
strategy / objectives
Innovation
Strategic fit
Partner survey:
Strategic value
Financial Value
Value
Revenues
Costs
Partner survey:
Financial value
Partnership Capability
Governance
Partner survey:
Partnership Capability
Partner survey:
Partnering Image
Operational
Effectiveness
Timelines
Quality
Partner survey:
Operational
Effectiveness
Alliance X scorecard
Dimension Category Metric Sub-metric Metric Value Target Trend Status
Strategic Value
Joint and Individual
strategy / objectives
Innovation
Strategic fit
Partner survey:
Strategic value
Financial Value
Value
Revenues
Costs
Partner survey:
Financial value
Partnership Capability
Governance
Partner survey:
Partnership Capability
Partner survey:
Partnering Image
Operational
Effectiveness
Timelines
Quality
Partner survey:
Operational
Effectiveness
Alliance Acme scorecardDimension Category Metric Sub-metric Metric Value Target Trend Status
Strategic Value
Joint and Individual
strategy / objectives
Innovation
Strategic fit
Partner survey:
Strategic value
Financial Value
Value
Revenues
Costs
Partner survey:
Financial value
Partnership Capability
Governance
Partner survey:
Partnership Capability
Partner survey:
Partnering Image
Operational
Effectiveness
Timelines
Quality
Partner survey:
Operational
Effectiveness
Alliance Acme scorecard
Alliance
Review Meeting
Copyright © 2012 by Vantage Partners, LLC. All rights reserved.
Developing a function-wide approach
23
Case
Study 4
Case
Study 2
Case
Study 1
Case
Study 3
Copyright © 2012 by Vantage Partners, LLC. All rights reserved.
Transform Guide:
Step by step guidance
24
Case
Study 4
Case
Study 2
Case
Study 1
Case
Study 3
Copyright © 2012 by Vantage Partners, LLC. All rights reserved.
Transform Guide example tool:
Guidelines for Terminating an Alliance Case
Study 4
Case
Study 2
Case
Study 1
Case
Study 3
Copyright © 2012 by Vantage Partners, LLC. All rights reserved. 25
� The Guidelines for Terminating
an Alliance provides guidance on
the key things to keep in mind
when terminating an alliance and
ensures that the alliance
management function across the
globe is able to leverage the key
lessons learned from past
experience
� The guide has multiple tools like
this, and each can be updated
over time to truly develop a best-
in-practice approach
� Avoid zombies! Approaching alliance transformations in a
systematic way allowed for identification of best practices and
the ability to perfect the process over time, while ensuring
alliances never became the living dead
� Enhance your brand. It was important for this company to be
viewed as a partner of choice, and making an explicit decision to
work to preserve the relationship, even when terminating
alliances, helped preserve its reputation
� Actively manage change. Many people are afraid of changes, but
putting place a diagnostic process allows you to have those
difficult conversations and be proactive about portfolio upkeep
Case Study 4:
Key takeaways
26Copyright © 2012 by Vantage Partners, LLC. All rights reserved.
Case
Study 4
Case
Study 2
Case
Study 1
Case
Study 3
Questions?
27Copyright © 2012 by Vantage Partners, LLC. All rights reserved.
28Copyright © 2012 by Vantage Partners, LLC. All rights reserved.
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Vantage Partners helps companies achieve
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