partner or perish: forging effective alliances - mars best practices

Buckingham Alliance Partners1

Partner or Perish:

Forging Effective Alliances

MaRS Best Practices Series:Alliance Management

John BuckinghamSeptember 9, 2011


Growing your business: Build or partner?

Partner or Perish: Forging Effective AlliancesSession Objectives

Address key questions:

How does one build and maintain an effective alliance?

What defines a competent partnering organization?


Partner or Perish: Forging Effective Alliances

Continuing Learning:

The leading global professional association dedicated to the formation and practice of strategic alliances

www.strategic-alliances.org

ASAP - Toronto Chapter

www.asaptoronto.com



Professional Certification:

Available through ASAP - Toronto Chapter


What is an Alliance?

• An alliance is a collaboration

• Between independent organizations that retain strategic autonomy

• While committing resources to joint activity

• And run within an incomplete contract


Major Alliance Types:

Operational alliances

• One or more key functions of a company is performed solely or primarily by an alliance partner

Project alliances

• Alliance partners collaborate on a specific project, typically with defined progress milestones and a defined termination point


Alliance Business Model

Supplementary

Alliances for Supplementation/Load

Balancing

Complementary

Alliances for Complementary

Capabilities, Offerings and Skills

Core

Core Capabilities and Competencies



Why would we want to do this?

Alliances (collaborations) increasingly used to attain company goals:• Access to expertise• Flexible resources• Increased speed (of development, to market, etc.)• Reduced financial risk



Why would we want to do this?

Alliances (collaborations) increasingly used to attain company goals:• Access to expertise• Flexible resources• Increased speed (of development, to market, etc.)• Reduced financial risk

Less than 40% of alliances meet their stated objectives• Misalignment of partner goals• Miscommunications• Poor execution• Changed financial prospects• Technical failure



Why establish an alliance competency?

Increase the proportion of alliances that meet or exceed their goals (and management expectations)





Accelerate `institutional learning’ of effective (and destructive) behaviors affecting collaborations: enhanced organizational awareness

Build consistency in effective alliance design, integration and maintenance processes





Accelerate `institutional learning’ of effective (and destructive) behaviors affecting collaborations: enhanced organizational awareness

Build consistency in effective alliance design, integration and maintenance processes

Enhance company reputation as a skilled, successful partnering organization (to secure more, and more capable, partners)



Key Alliance Management Competencies:

4.Communicating Effectively5.Leading by Influencing6.Gaining Value from Diversity7.Building and Maintaining Trust


Alliance Management Principles*

•Clear Responsibilities and Expectations

•Robust Communication

•Senior Management Commitment

•Understanding one’s Partner

•Disciplined Improvement Approach

•Effective, Efficient Processes

•Broad-based Alliance Capability

* Adopted by ASAP from `Endo Alliance Management Principles’


Internal Organization for Alliance Management

Key Elements:

Senior Management Sponsor

Alliance must serve sponsor’s organizational goals

Dedicated Alliance Leader

`Mindshare’ or formal designation


Effective Senior ManagementSponsorship of Alliances

Why is Effective Sponsorship critical?

Alliance failure rate – key factors:

Internal support for resourcing and decision-making

Ensuring alignment on key issues across partner organizations

Effective dispute resolution


Alliance Leadership Alternatives

Integrated LeadershipShared Leadership

Internal/external

Product Objectives/ Relationship Objectives


Alliance Integration

Alliance Maintenance

Alliance Transformation

AllianceNegotiation

ContractNegotiation

CollaborationIntegration

AgreementSigning

Alliance Life Cycle

Monitoring

AllianceChange or Termination

Prevention Diagnosis Treatment

ProblemResolution

R&D Commercialization

AllianceManagement


ManageRe-evaluate:

Revise or Terminate

Sign Launch/ Integrate

Negotiate

Evaluate

Identify/ Recruit Opportunities

BD

AM

Establishing an Alliance Management Competency

Alliance Management: Business Development Interface

Deal-Making and Deal-Managing:An Integrated, Transparent Process


Alliance Management Perspective: Adding Value During Deal Negotiations

Three Main Considerations:

• Due diligence: partner candidate assessment • Effective relationship development

• Designing the appropriate collaboration structure


Integrating a New Alliance

Key Considerations:• Appointing a qualified alliance leader and a senior management `sponsor’• Timely recruiting of alliance-facing staff


Integrating a New Alliance

Key Considerations:• Appointing a qualified alliance leader and a senior management `sponsor’• Timely recruiting of alliance-facing staff• Joint communication of management expectations and contractual requirements to the alliance team and leader• Joint alliance team formation and relationship-building• Establish alliance team charter


Alliance Team Charter TemplateGuidance Resource for Alliance Management

Purpose: Provides focus, alignment and operational guidance to each alliance relationship. Serves as an operational reference and guide through the alliance lifecycle as a companion to contractual agreements and project plans.

Allied Companies: Your and XYZ Company

Alliance History and Background

Alliance Focus (Mission, Spirit of Alliance, High-Level Objectives/Milestones)

Alliance Working Guidelines(Addressing the Alliance Essentials)

Performance Measurement (Measuring and Monitoring Performance)

Roles and Responsibilities (Company Roles and Key Individual Roles)

Key Sections:• Alliance mission, objectives

and spirit• Roles and responsibilities• Working guidelines• Metrics and performance

measurement


Alliance Integration

Alliance Maintenance

Alliance Transformation

AllianceNegotiation

ContractNegotiation

CollaborationIntegration

AgreementSigning

Alliance Life Cycle

Monitoring

AllianceChange or Termination

Prevention Diagnosis Treatment

ProblemResolution

R&D Commercialization

AllianceManagement


Alliance `Health Check’ SurveysAssessment Resources for Alliance Management

Alliance Health Check

Purpose: Primary measurement mechanism for Relationship Performance factors

Strongly Disagree

Disagree

Neutral

Agree

StronglyAgree

1. Alliance Focus (Goals and Objectives) a. Sensor Question b. Sensor Question c. Sensor Question

2. Roles and Responsibilities a. Sensor Question b. Sensor Question c. Sensor Question

3. Decision Making

a. Sensor Question

b. Sensor Question

Key Features: Provides regular checkpoint

on essential Alliance competencies

2-3 “sensor” questions per Relationship factor

Results discussed with partner, to identify and understand areas for improvement and reasons for successful outcomes

Action plans developed and implemented through Alliance Team

3. Relationship Trust

a. Sensor Question

b. Sensor Question


Effective Senior ManagementSponsorship of Alliances

Typical Alliance Governance Framework


Strategic Importance to Alliance Partner

Str

ateg

ic Im

port

ance

to

You

r C

ompa

ny

Low High

Low

High Imbalance Balance

Balance Imbalance

Establishing an Alliance Management Capability

Alliance Structure and Management Considerations

Vulnerable Enthusiast

Potential Bully

Dynamic Duo

Simple Pairing


Growing your business: Build or partner?

Partner or Perish: Forging Effective AlliancesSession Objectives

Address key questions:

How does one build and maintain an effective alliance?

What defines a competent partnering organization?



Questions?

partner or perish: forging effective alliances - mars best practices

Business

buckingham alliance

alliance competency

effective alliance design

major alliance types

alliances collaborations

proportion of alliances

alliance life cycle

ry alliances