Summit Panel: Don’t Underestimate the Importance of Relationship Metrics!
Posted By Jon Lavietes, Wednesday, March 17, 2021
For years, many in the alliance community lamented over the perceived misunderstanding of the alliance practice and the lack of appreciation for the value it brings to the rest of an organization. Fortunately, that is changing, as our recent member survey results demonstrated, and this week a diverse panel of alliance veterans reported more signs of tremendous progress on this front during the 2021 ASAP Global Alliance Summit session titled “The Value of Alliances: The Alliance Management Journey.”
Longtime ASAP member Andy Eibling, CSAP, founder of Forty86 Consulting Group, moderated a lively discussion between executives from the biopharma, tax and accounting, and technology industries about how alliance practices have evolved at their companies, which alliance metrics cause management’s ears to perk up, and how to standardize best practices—and make them visible—in other divisions within the organization.
How to Flex Partnering Muscles for Non-Revenue-Generating Alliances
Equifax’s alliance division is now about a decade old, and while it is highly respected across the company today, it had somewhat of a rough start. In fact, the formal practice was originally born out of a rough patch with a large partner that ended up in litigation. This expensive legal battle led the company’s CEO to ask, “How fruitful is this constant conflict with this partner?” recalled Melinda McBride, senior vice president of global alliances and channel partners at Equifax. The lack of understanding around communicating with partners, governance models, and managing stakeholder expectations “compelled us to think differently about how we manage partnerships,” she added.
Today, Equifax’s “partnering muscle” is now a core part of the company’s business model—“out of something bad can come something really good,” said McBride. It utilizes alliances in a variety of contexts. While it is easy to demonstrate the value of transactional collaborations that generate revenue relatively quickly, such as data licensing agreements, other partnerships don’t come neatly wrapped in measurable dollar figures. For example, joint innovation partnerships “have a longer tail,” said McBride, before adding that in these types of joint ventures relationship metrics “are core and critical.” She stressed the importance of illuminating how alliance managers achieve the critical milestones in bringing these activities to fruition and how well they are advancing initiatives across the portfolio.
Alliance Success Stories Percolate Outside the Practice
Dean Sengstock, national alliance leader at RSM US, has had a similar experience. His firm’s 30-year-old alliance program has helped it expand its business across the United States and diversify its client offerings. Although “it goes without saying that financial metrics are probably important to an accounting and tax firm,” he also extolled the virtues of intangible measures that illustrate how the practice is boosting other parts of the organization. If RSM’s partners are helping internal stakeholders in audit, tax, and consulting solve client issues, “those stories start to percolate up,” he said. And if those stakeholders advocate on the alliance practice’s behalf, “it validates the program in and of itself.”
Let’s Do This Again Soon—Repeat Partners a Sign of Biopharma Alliance Success
Finding non-revenue-based metrics is a little easier in the biopharma world, which is used to waiting as long as a decade before a collaboration realizes real revenue. For fast-growing Vertex Pharmaceuticals, it is more important to look at the alliance portfolio as a whole to make sure alliance managers are advancing projects as smoothly as possible and executing on the things that are within their control. Since biotechs and pharmaceutical companies cannot dictate how their science will evolve, the work performed in a joint partnership “is as important as the outcome,” said Fiona Randall, CA-AM, PhD, senior director of BD and alliance management at Vertex Pharmaceuticals.
For a company like Vertex, partner satisfaction is one of the most important metrics of all. If at the conclusion of a joint venture, a partner says, “That was a great collaboration to be a part of, and we want to work with them again,” then Vertex Pharmaceuticals has done its job, according to Randall.
Train Stakeholders to See Things Through Alliance Eyes
Standardizing best practices also helps integrate relevant stakeholders outside of the alliance practice and get them to understand how partnerships fit into the company’s broader operation. For Vertex Pharmaceuticals, it is a tricky balance to implement processes that work for all of its unique alliances. However, the company has invested heavily in training personnel from other divisions, so that everyone working on an alliance is consistent in how they go about executing partnership agreements, yet the processes leave each alliance manager room “to manage each of those alliances in a bespoke way,” said Randall.
Likewise, Equifax has seen alliances “become embedded as part of our culture,” largely thanks to the hundreds of hours the company has invested in training around stakeholder management, stakeholder mapping, and conflict resolution, according to McBride. Over time, many alliance professionals have moved into roles in other parts of the organization, which has further developed an understanding of partnership principles outside of the practice. Equifax doesn’t have to reconcile internal conflict between direct and indirect sales channels because alliance skills and practices have been ingrained in employees all over the organization. In other words, it helps to have people outside of alliance management that can see things through an alliance manager’s eyes.
“It makes you think differently about customers and partners,” said McBride.
RSM is also expanding its efforts to share best partnering practices with its business managers. More and more people from outside the alliance management function are becoming curious about how the alliance division can help meet the needs of clients. With a little more training, other leaders in the organization will soon be able to call the partnering skill set a core competency.
“Being a subject matter expert, you should be willing to share your expertise,” said Sengstock.
“The Value of Alliances: The Alliance Management Journey” is a must for alliance managers looking for new ways to demonstrate their value within their organizations. The good news for Summit registrants is that this panel, and every other Summit session, will be on demand in the event portal until April 30.