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Lilly, Covance Ilustrate How They Outlined Their Partnership’s “Strategic Future”

Posted By Administration, Friday, June 20, 2014
Originally posted on 11/21/2013

How does a long-term biopharma partnership maintain strategic, operational, and cultural alignment when the rapid pace of change in the industry often necessitates changes in strategy for the respective partners? That’s a question the 2013 ASAP BioPharma Conference opening plenary session “Smooth Sailing in Stormy Seas: Maintaining Long-Term Alignment in the Midst of Change”—a profile of the alliance between pharmaceutical giant Eli Lilly and Company and contract research organization (CRO) Covance, Inc.—sought to answer.

In 2012, the key stakeholders in this five-year-old alliance decided to reevaluate what had up until that point had been a highly successful relationship. Kenneth Carlson, CA-AM, manager of clinical pharmacology study delivery solutions at Eli Lilly and Company, began the presentation by providing a brief overview of the partnership’s history.

Covance wanted to validate its partnering model and perfect its long-term partnership creation model, all the while growing its discovery capabilities. Lilly wanted to transform its R&D model (reduce infrastructure, focus on core activities), grow opportunities in Greenfield and the state of Indiana as a whole, and drive key initiatives, such as shorter timelines to obtaining patents, and enrolling clinical trial patients earlier and faster.

The alliance was harmonious and successful its first four years, hitting its key performance indicators (KPIs). However, dynamics related to the alliance’s portfolio were changing—in a nutshell, conducting clinical trials was coming with more and more complexities as time grew on.

Steven Twait, CSAP, senior director of alliance management and M&A integration at Eli Lilly and Company, talked about an alliance tool that helped the two companies reevaluate their partnership: the “Strategic Futures” Exercise. Twait set the scene by mentioning that two of what Lilly calls the “five C’s”— 1) common purpose, 2) clear purpose, 3) complementary roles, 4) compatible processes, and 5) collaborative relations—were slipping a bit in the partnership, specifically the common and clear purpose elements.

As part of the Strategic Futures process, Twait asked the members of the alliance’s “ClinPharm” (Clinical Pharmacology) Committee to provide their view of the alliance’s three- to five-year objectives, and the obstacles and barriers to achieving those objectives. Carlson and Andrew Eibling, CSAP, global vice president of alliance management at Covance, Inc., spent six weeks synthesizing the answers provided by committee members. The committee dedicated the next one of its quarterly full-day meetings to create a dialogue about these objectives and barriers with the goal of leaving with alignment for a three-year vision, key priorities, and a few guiding principles, which in this case turned out to be flexibility, transparency, not making assumptions, and putting an immediate halt to activities that were not creating value.

Eibling then spoke about the key lessons gleaned from the exercise:
  • Choose the right executive level to work through your issues – In this case, the ClinPharm Steering Committee was the right place to address the growing misalignment in the Lilly-Covance partnership, but Eibling noted that it may be appropriate to implement Strategic Futures higher or lower in the chain when applying it to other alliances.
  • Manage perceptions up front – In this partnership, the perceptions were almost too positive; the two organizations worked together so well it was hard to discern who was from Lilly and who represented Covance, according to Eibling. There is always a need to step back and prepare for the future—even when things are going well.
  • Candid feedback – Setting up a forum that allows individuals working on the alliance to provide unvarnished opinions on topics such as the perceptions of the partner, the alliance, and how the current operational principles could hinder the alliance in the future was essential in the reevaluation process.
  • Get people out of the “day-to-day” and focus on strategy – Set aside a day to focus on the long-term—you can “talk about deliverables tomorrow,” said Eibling.
  • Consideration of progress needs a “steward” – Carlson was appointed the owner of the recommended actions that resulted from the governance committee meeting and making sure there was appropriate follow-up.
  • Not a one-time exercise – This process has to be iterative and must be conducted periodically.

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