The Meaning of Alliance Success
Just outside of Kensington Gardens and just steps from the Kensington Palace in London, some of Europe’s leading alliance management thought leaders and practitioners—partnership royalty, if you will—gathered at the 2023 ASAP European Alliance Summit last month. To play the role of Bukayo Saka, three heads of alliance management kicked off the conference by sharing their perspectives on the evolution of the alliance chief’s position in the panel session “Alliance Management Leadership—Past, Present, and Future.”
Joining ASAP’s own leader, President and CEO Mike Leonetti, CSAP, were Nicole Colwell, executive vice president and chief alliance officer at Prasaga Foundation; Markus Kropf, vice president and head of global alliance management at Merck KGaA; and Fiona Ducotterd, CSAP, PhD, chief scientific officer at the Alzheimer’s Research UCL Drug Discovery Institute, who collectively brought decades of diverse, rich experiences.
The well-traveled Colwell, who has spent time at Unisys, Avaya, HPE, and Avanade, among other stops, had a large hand in building out GE Digital’s ecosystem, an initiative that at one point involved sifting through more than 4,000 inquiries from other organizations seeking to become a GE partner. Kropf has spent over two decades at “the original Merck,” where after stints in business development and finance earlier in his career he now oversees an alliance team that is responsible for 150-plus collaborations. Ducotterd started her career in the lab with several scientist and research gigs before evolving into an alliance manager over the last half of the previous decade. For nearly a year, she has combined her scientific and alliance backgrounds to set the direction for 32 researchers under her watch charged with executing a diverse array of spinouts, pharma company licensing agreements, and academic partnerships, including University College London’s (UCL) neuroscience collaboration with Oxford and Cambridge.
A Strong Relationship to Revenue
The panelists covered a Richmond Park’s worth of ground in 45 minutes, reiterating the importance of building trust internally and with partners, knowing the high-level details of contracts, and using the alliance manager’s superpower to influence without authority, a theme that has come up multiple times in recent ASAP events. Since the panelists have touched business development (BD) in their careers, they also shared tips on how to strengthen the relationship between the two divisions. Colwell observed that BD has come a long way from the days a decade or two ago when folks in the department were more interested in “protecting their own piece of the pie.” Back then, BD employees would look at Colwell quizzically when she asked why their company’s robust alliance resources weren’t represented in account plans.
“‘We need to add this into the playbook.’ They kind of looked at me like, ‘Why would we do that? We know we need to, but we have to call that out?’” said Colwell, recalling one conversation. However, today BD understands that relationships play a big part in hitting commissions and generating revenue. “Now it’s almost a no-brainer at most of the big tech companies that you’re going to have alliance partners in on your big deals, or any of your deals. You’re going to look at that pool of alliances and who do they know, how can we work together, and how can we share resources and connections?”
Consortiums are bringing new technical innovations in all areas of the tech space, and BD has taken notice.
“That’s an exciting thing that’s impacting business development. The leaders I’m talking to in BD are getting engaged with that,” Colwell noted.
Living with the Deal
For Kropf, who reminded the audience that he has “been on both sides of the fence,” the challenge is to get BD to understand the ramifications that decisions they make in the alliance formation process can have downstream.
“BD is very transactional. They are incentivized by closing and greed,” he said, whereas alliance management is “living with the deal” for many years. At Merck KGaA, alliance managers are brought in during contract negotiations to ensure that all parts of the contract, not just the revenue portions, are workable long-term.
“Can what’s written in wonderfully legalese work in practice?” Kropf asked.
Kropf also went into detail about the complexity of some pharmaceutical industry agreements, namely that these transactions are “more than just one deal”; they have licensing, manufacturing, and more and more often data privacy components, the latter of which is sometimes longer than the original contract.
“Typically, our friends at BD try to shortcut that part of those contracts because it’s very boring for them,” said Kropf.
Alliances Are the KPI
You can’t talk alliance leadership without a conversation about KPIs. Perhaps surprisingly to some, money isn’t necessarily the be-all-end-all in the context of these three alliance senior leaders’ current positions. For Ducotterd and Colwell, partnerships are the metric. Ducotterd’s 12-person advisory board is deeply invested in partner selection and management.
“They’re always looking at our portfolio at least once a year, giving us guidance on where to go. Our success is really [based] on the success of building collaborations that then deliver a transition to the next phase of research,” said Ducotterd.
In another part of the session, she reminded the audience of biopharma’s somewhat unique dynamic where the science can easily fail even in the most well-executed alliances. She said alliance managers can’t assume that senior management will understand this dichotomy and that they must clearly illustrate how alliance and scientific success aren’t necessarily tied to one another.
“When something ends, what you want people to walk away with in a biopharma partnership is, even if the science is really disappointing, it was a great team and you got to the right place,” said Ducotterd.
In an industry where the bottom line is the bottom line, the Prasaga Foundation, which is a nonprofit looking to build a community around open-source blockchain technology development, is more focused on growing its ecosystem—or “new logo acquisition,” as it is alternatively called in tech.
“It’s an interesting metric. I’m used to driving revenue,” said Colwell.
Beauty Is in the Eye of the Stakeholder
In Kropf’s experience, success has been and is still somewhat subjective, especially at the portfolio level where “it’s almost impossible to have a uniform KPI,” in his estimation. When it’s hard to measure progress, triumph is judged by your superior officers—or as Kropf put it, if beauty is in the eye of the beholder, then “success of alliances is in the eye of the stakeholder. If they think you’re doing a fantastic job, you’re doing a good job. If they think what you’re doing sucks, you’ve got a problem.”
Developing KPIs for individual alliances is a little easier. Kropf gave the example of a development alliance that is counting on a technology transfer to occur by a certain date. There’s a lot riding on this alliance manager’s ability to orchestrate the partners; if they don’t meet the deadline, the associated milestone payment won’t be realized.
“That is something that is measurable. That is the objective for the next three to six months,” said Kropf.