My Profile   |   Print Page   |   Contact Us   |   Sign In   |   Register
ASAP Blog
Blog Home All Blogs
Welcome to ASAP Blog, the best place to stay current regarding upcoming events, member companies, the latest trends, and leaders in the industry. Blogs are posted at least once a week; members may subscribe to receive notifications when new blogs are posted by clicking the "Subscribe" link above.

 

Search all posts for:   

 

Top tags: alliance management  alliances  collaboration  partnering  alliance  partner  partners  partnerships  alliance managers  ecosystem  alliance manager  The Rhythm of Business  partnership  Jan Twombly  Vantage Partners  biopharma  Eli Lilly and Company  governance  strategy  Strategic Alliance Magazine  IBM  collaborations  IoT  strategic alliances  ASAP BioPharma Conference  cloud  innovation  Christine Carberry  Cisco  healthcare 

The “Absolutely Critical Thing”: Pharma Alliances Needed Now More Than Ever

Posted By Jon Lavietes, Friday, September 4, 2020

In this era of COVID-19, we often talk about the challenges that come with sheltering in place, remote work, and social distancing. It’s tougher to read a room on videoconference; new employees often can’t get the deep, hands-on training and onboarding they need without their mentors literally by their side; and many professionals simply hate not being able to have a coffee or a drink with their colleagues in person. 

The Alliance Manager’s Challenge

Meanwhile, alliance managers in the pharmaceutical industry have other unique obstacles to overcome as well.

“The inability to get into a room together has made complex transactions very, very hard, except the whole system requires people to do complex transactions, and requires people to have alliances and to be able to manage them,” said Ed Cox, executive vice president of strategic alliances and global head of digital medicine at EVERSANA.

However, where there are challenges, there are also opportunities. On that score, Cox wants alliance managers to embrace the moment and let the chance to put our economy, our lives, and our public health back together again galvanize them.

“You can go a lifetime and the things that you do [for a living] can never be one of the most critical things in a moment for your civilization, but that’s what is happening. Strategic alliances in pharma are this absolutely critical thing in keeping our civilization moving forward,” he said. “That’s exciting.”

That excitement and sense of mission are sentiments Cox hopes attendees of his upcoming ASAP 2020 BioPharma Conference keynote presentation, “Strategic Alliances Within Pharma: Why the World Needs Alliance Management More Than Ever,” will come away with.

No Question, Pharma Alliances Are Exponentially More Complex

And make no mistake, the initiatives at the center of biopharma alliances are usually more complex than those in other industries, and by orders of magnitude. Where the purchase of a basic commodity represents the simplest of transactions—no previous relationship with the seller or any intimate knowledge of the product is required—biopharma alliances by contrast lie on the opposite end of the spectrum.

“Life sciences products are more complex by factors. If you think about the due diligence of a licensing transaction for a pharmaceutical product, there are between 100 and 150 entire lines of questioning—not questions, lines of questioning—and the truth is there should be another 100 that the person doesn’t know to ask,” said Cox, who will outline a four-point scale illustrating the range of transaction complexity in his BioPharma Conference session.  

Given this complexity, trust, always an evergreen topic in ASAP circles, has never been more essential.

In Normal Times or Today’s “Radically More Dramatic” Turbulence, Trust in Alliances Is Essential

“In even the most normal circumstances, you need strategic alliances to hold very complex transactions together because the products and asset class are incredibly complex. If you do not believe or you do not know the person on the other side has yours and their relationship first and foremost in their mind, then it is impossible to do these types of transactions. That is in the normal era. In an era of COVID, it is radically more dramatic,” said Cox.

Cox, who is involved in dozens of alliances in all stages of the pharmaceutical product life cycle at EVERSANA, hopes his presentation will spark a lively Q&A and discussion during the latter half of his session. But, again, his real mission is to create impassioned alliance managers who are eager to use their skills and relationships to battle COVID-19. While he has the benefit of working for a company that fosters a strong alliance culture, Cox recognized that not every alliance manager is so fortunate.

“There have been times that alliance management doesn’t always feel as appreciated as they could. They don’t feel that it is viewed as it should be,” said Cox. “If ever there was a time for alliance management to be viewed as critical as it always was, it’s now.”

The first-ever virtual ASAP BioPharma Conference will take place Sept. 14–16. Cox will deliver “Strategic Alliances Within Pharma: Why the World Needs Alliance Management More Than Ever” on Wednesday, Sept. 16, at 1:00 p.m. Register for the BioPharma Conference today to catch this presentation and many other great sessions!

Tags:  alliance  alliance management  complex transactions  digital medicine  Ed Cox  EVERSANA  life cycle  pharmaceutical  strategic alliances  transaction 

Share |
PermalinkComments (0)
 

Keeping It Together: Summit Roundtable Examines How Acquiring Companies Integrate Alliance Portfolios

Posted By Jon Lavietes, Friday, September 4, 2020

M&A has been a hot topic recently, which is why a good portion of the 2020 ASAP Global Alliance Summit agenda was dedicated to it. One roundtable discussed broadly what alliance managers need to be aware of if they want to dip their toes in the M&A waters. Another took the conversation to a more granular level. In “Big Pharma M&A Alliance Portfolios,” Adam Kornetsky, consultant for Vantage Partners, moderated a discussion between senior alliance professionals employed by household names in the industry about what to do with alliance portfolios in the run-up to and immediate aftermath of an acquisition, both from the acquirer’s and the acquired company’s perspectives.   

Definition of Success: You Know It Don’t Come Easy

Before getting into the specifics, Kornetsky asked the panel to outline what a successful acquisition and integration looks like. Chris Urban, head of alliance and integration management at Amgen, asserted that success is defined differently with each transaction. Sometimes the principal goal is to drive top-line revenues; in other instances it’s for bottom-line savings that result from synergies between the acquirer and acquiree. In some cases, the motivation behind a transaction is to meet a specific safety, regulatory, compliance, or other type of functional requirement.

“It is the most critical thing to define the measures of success and it’s not as easy as it sounds. It may sound easy in the beginning, but you quickly find after the announcement that each of the functions starts to view their own vision of what’s important through their own lens,” he said. He gave the example of a top-line-growth-focused Amgen acquisition in which the company had to stress to the alliance team that “synergies weren’t a part of the deal.”

A more immediate measure of success is the seamless transition of activities to the appropriate business owners by the integration team. Jeff Hurley, CA-AM, global alliance management lead at Takeda, stressed the importance of introducing the alliance portfolio very early on in the acquisition discussions. The more complex the integration, the higher the risk of alliances veering off course. It is important to actively manage partner assets and capabilities so that the value of collaborations is preserved (i.e., they continue to produce intended outcomes) throughout the transition.

“Alliances aren’t necessarily the driver of one of these types of transactions, but they are a key consideration in terms of how well the integration goes,” he said.

Set Goals, Work the Phones, and Tie Up Loose Ends

What sorts of things should alliance managers working in the soon-to-be-acquired company prioritize prior to deal closing? First and foremost, according to Hurley, is to understand the acquiring company’s strategic rationale for the transaction. From there, alliance managers must prepare a wealth of information for incoming senior leadership from the buyer organization. They must provide a 30,000-foot overview of the portfolio and how it might sit within the new organization, as well as a detailed breakdown of the individual partnerships themselves. They should also address enterprise-, function-, and asset-level questions; proactively identify and manage risks specific to the acquisition; and calculate the effort it will take to transition the partnerships through the integration process and beyond.

Mark Coflin, CSAP, vice president and head of global alliance management at Takeda, counseled listeners to provide a two- to three-year outlook for each alliance and specify the goals and expected outcomes at the end of years 1, 2, and 3. In the short term, expect concerned, if not panicked, phone calls and emails from partners wanting to know what is going on. Contact direct alliance counterparts and senior leaders directly—by phone or videoconference rather than email or text, if possible—and communicate all shareable details. Second, tie up important loose ends that don’t require input from the new company.

“Internally, as best you can, think about what the key decisions are—any key, critical, stage-gate decisions that are required—and do your best to try and take care of those decisions, if you can, in advance of the close,” he said.

Cloudy Forecast Around the New Home?

Similarly, the acquiring company has plenty of work to do before close. It must review the contracts for each partnership, especially if a data room is involved, in order to identify antitrust and other legal risks and determine if there is flexibility to make changes to these collaborations if some are desired by the new company, according to Dana Hughes, vice president of integration management and alliance management at Pfizer. The new owner also has to figure out where each partnership fits within its organization, a trickier proposition for a large organization like Pfizer that counts 200 relationships in its portfolio. Will it fall under commercial, business development, regulatory, R&D, or another part of the company?

“Finding that right home is actually part of our deal model because that’s how we know we’re going to be effective in actually rolling out the changes we want to implement to create that full opportunity for patients,” said Hughes, who deals with commercial alliances at Pfizer.

Hughes also added that alliance managers should expect to rely on their experience working in a cloudy environment with scant available information.

“The lack of knowledge is kind of a normal condition for integration,” he warned.

Control what you can control by conducting as much research on the acquired asset’s partnerships and having extensive dialogue with counterpart alliance managers. Wherever possible, name the lead of each alliance team, prep those alliance heads, and build a team around them in advance, so that everyone can hit the ground running when the deal is finalized.  

Urban urged acquirers to tier concerns and address high-priority matters first, such as potential conflicts or antitrust considerations that might require firewalling certain parts of the organization from an alliance’s affairs. Second, identify critical upcoming milestones and address them with “hyper care”; treat these matters with urgency and spare them from the lengthy onboarding process. Lastly, the buyer must recognize which of the acquired entity’s partnerships will be resource-intensive and take measures to ensure that these alliances don’t impede existing collaborations.

A Steady Dossier of Information Keeps Things from Going Sideways

Once the acquisition is complete, there is no excuse for failing to maintain continuity.

“Being acquired and closing an acquisition does not mean that everything starts going sideways,” said Coflin.

Coflin advised alliance managers at acquired entities to determine which senior leaders and alliance personnel need to be briefed on partnership affairs in consultation with the new parent company. Prepare a package on all alliances in the portfolio and rate them on a high-medium-low risk scale based on the number of critical decisions that need to be made and the financial stakes of the collaboration.

Again, focus on immediate priorities and make upcoming decisions. Hurley exhorted alliance pros to do whatever is necessary to make immediate deliverables, and associated action items, visible to relevant executives from the company taking over. He also seconded the comprehensive dossier on each alliance espoused by Coflin.

“It’s more than just an onboarding document. ‘Here’s all the key information that you need to know in order to step into this right away,’” he said.

Special Handling: The Hyper-Care 20 Percent

Hurley added that an internal and external communications strategy should be a primary focus. In particular, someone has to determine who is going to say what to the partner and when.

Coflin said that there are limits to what can be shared with partners before the deal is consummated. However, alliance leads had better be ready to answer immediate postdeal questions.

“This is the way it was. What has changed? What can you expect over the first 90 to 100 days as a typical period of time? How are we going to move through things, say, 100 days into the future?” he said.

From the acquirer’s perspective, Urban suggested that the Pareto principle normally applies in most acquisitions—80 percent “falls very, very naturally into the engine you have built.” The other 20 percent calls for delicate handling. Urban gave a number of examples. A company founder who personally managed an alliance with Amgen’s acquired asset was granted more senior-leadership access than might otherwise have been considered appropriate. The aforementioned partnerships with critical milestones on the horizon and alliances that present antitrust concerns also fall into this fifth of the portfolio requiring “hyper care.” Urban strongly advised stakeholders to overcommunicate plans for these collaborations to incumbent partners because “the partnerships they have with the company we may be acquiring [could be] existential for them.”

But First: Do No Harm

Hughes touched on the human and practical elements of integrating acquired assets postdeal.

“It might be as simple as something like, ‘First, do no harm,’” he said.

Wherever possible, protect ongoing operations and keep disruptions to existing processes to a minimum, to the extent that is possible. Understand how relationships work within individual alliances before making changes, and be transparent about why a decision was made to radically restructure an alliance. Clarity around goals and a carefully crafted process around replacing existing personnel are paramount. Some HR and retention issues are unavoidable.

“We had a habit of making sure things run just as it is for a while so we can observe and learn before we start replacing the individuals who might be involved,” said Hughes, before adding that you always have to be respectful of the new colleagues and the relationships—and trust—that they have built with the partners throughout the process. “[Retention issues] are always present when it comes to an integration situation, both before close when people start bailing out or after close or after their lockup has ended a couple of months later.”

The panelists shared more great wisdom, including an invaluable framework for merging portfolios during the first two months following an acquisition, throughout the roundtable. Summit registrants were able to view the roundtable and hear each expert’s parting thoughts, and discover the comparison Urban was making when he invoked the famous Mike Tyson quote, “Everyone has a plan until they get punched.” (And in case you missed it, for even more on M&A alliance integration check out our article “A Process, Not an Afterthought,” in the Q2 2020 Strategic Alliance Quarterly.)

Tags:  Acquisition  Adam Kornetsky  alliance  alliance portfolio  Amgen  Chris Urban  collaborations  compliance  Dana Hughes  integration  Jeff Hurley  Mark  partner  partner asset  Pfizer  regulatory  Takeda  transaction  transition  Vantage Partners 

Share |
PermalinkComments (0)
 

Revamped Bayer Alliance Practice Relieves Partnering Headaches

Posted By Jon Lavietes, Saturday, August 29, 2020

Five years ago, Bayer’s R&D alliance management group knew it needed changes. Even though its core partners were happy in their collaborations with the 150-year-old pharmaceutical and over-the-counter medicine institution, the external perception in the broader pharma community landed in the lower tier, according to its internal research.

The R&D group embarked on changes to its alliance practice in order to improve its function and achieve three larger organizational objectives: 1) deepen the company’s understanding of the mechanisms of diseases that were getting increasingly complex; 2) broaden its drug portfolio into new modalities, technology, and external innovation; and 3) make its operating model more flexible, in general.

Bayer was contending with a variety of changes in its operating environment. First, the number of alliances—and the number of people from outside the organization working on Bayer initiatives—was growing fast. Moreover, the company was engaging in new types of collaborations, such as digital health partnerships, in which it found itself in the unfamiliar position of being the inexperienced party. Partners increasingly had their own alliance networks playing roles in Bayer collaborations, which added a new layer of complexity to the management of these collaborations.

Two Bayer executives shared the story of the company’s still-in-progress alliance management makeover in an on-demand 2020 ASAP Global Alliance Summit session, “Enabling Strategic Change—Cultural and Alliance Capability Development,” which took viewers through the internal and external changes that were made in order to modernize its alliance practice and improve its standing within the broader pharma partner community.

Bayer’s New Training Regimen Comes Up ACEs

The first step in upgrading Bayer’s organizational alliance capability was to overhaul alliance manager training. More specifically, the practice instituted highly tailored individual plans; executives were coming to alliance management from a variety of areas (e.g., marketing, R&D, business development, etc.) and each had different strengths, weaknesses, and bodies of knowledge.

Bayer complemented this individualized training with its Alliance Community Excellence (ACE) initiative, which brought in outside experts, sometimes from unusual places, to hold court on facets of alliance management. Michael Kennedy, PhD, director of strategic alliances in Bayer’s Business Development & Licensing group, spoke of one instance where a former FBI trainer taught alliance managers how to identify and neutralize lying and deceit. The ACE program also placed an intense focus on external networking, including deepening the alliance group’s interaction with the ASAP community. As part of the ACE program, the alliance management practice also set up a help line so that nobody in the organization felt like they were on an island. 

“Who are you going to call? It’s not Ghostbusters. It needs to be somebody within our broad alliance community that people can call, either as an alliance manager running into some challenging topics and wanting to discuss it or somebody on an alliance team. They can pick up the phone and call one of us alliance managers for help,” said Kennedy. 

Complementary Principles, Competencies Go Hand in Hand

Bayer structured its training into six core competency categories: 1) alliance know-how, 2) collaboration, 3) joint problem solving, 4) organizational agility, 5) flexibility, and 6) conflict management, and developed curriculum for executives of different levels (e.g., rank-and-file team members vs. alliance leaders). Each of these areas consisted of three to five individual skills. Kennedy explained that the organization sees synergy between these areas and that they can be broken down into three complementary pairs—organizational agility helps optimize alliance know-how, flexibility aids collaboration, and conflict management is an inevitable part of joint problem solving.

Kennedy walked the virtual audience through a set of foundational principles grouped into two broad categories—1) “Establish,” which dealt with structure and process, and 2) “Practice,” guidance around mindset and culture—that similarly went hand in hand with each other. Each alliance needs resources—namely, the right people, capacity, and investment—but they are useless if partners don’t have access to Bayer leaders. (Resources represent an “Establish” principle, while access comes from the “Practice” category.) Governance, another “Establish” principle, is nothing without alignment, which Kennedy defined in this context as “speaking with one voice.” Communication, both in terms of timing and consistency, to partners and the public at large is paramount, but problem-solving capabilities will eventually be necessary when it breaks down. For years, Bayer struggled to acknowledge partners’ differences, but in recent years the company has strived to safeguard the value joint initiatives are expected to bring to allies. Carry out all of these principles, and Bayer partnerships will generate execution and trust.

“[Execution and trust] really are the foundational pieces of our partnering principles,” said Kennedy.

A New Alliance Culture: Play to Win vs. Playing It Safe

Of course, principles and competencies only go so far if a corporate culture isn’t designed to optimize them. Bayer had a lot of work to do in this area, according to Christoph Huwe, CSAP, PhD, director of strategic alliance development for R&D Open Innovation & Digital Technologies at Bayer. First, the company had to stop operating in silos. To that end, it adopted the mantra “assets over function,” recounted Huwe in describing the new collaborative mindset that encouraged employees engaged in alliances to prioritize activities that were necessary to advance a drug candidate to a clinic or patient. Bayer relaxed its traditionally “top-down” command-and-control model, so that its employees had the freedom to execute accordingly without having to run every decision up the ladder within the company.

Bayer similarly loosened its risk-averse ways to enable the alliance practice to “play to win and learn over playing it safe”—according to Huwe, the organization was previously less inclined to make mistakes. From a strategic standpoint, Bayer’s mentality switched to one of “science over process.” That is, instead of trying to force a drug to work for a preplanned indication, it would follow the science and pursue another indication if initial research showed the asset was better suited for it.  

Cards on the Table: Alliance Game Players Learn Practice’s Four Pillars

Of course, culture starts at the top, so the alliance practice puts its senior leaders through rigorous team and individual training to lead by example and accept what Huwe characterized as “very candid feedback about inconsistencies” in what they preach and what they do vis-à-vis partner initiatives. Midlevel management retraining was also critical, according to Huwe, since the majority of people working on alliance engagements reported to executives at this level.

Since senior executives usually developed the company’s alliance strategy in advance, it was up to the alliance practice to rebrand itself and communicate the new vision to the rest of the organization through “game-ified” cross-functional team-based exercises. For example, the alliance practice created a board game that was divided into the four pillars of Bayer’s internal culture—collaboration, experimentation, customer focus, and trust. About a dozen players would break into smaller groups where they would be asked to discuss whether actions detailed on playing cards were “blockers or drivers” of these four cultural mainstays. The smaller groups would ultimately reconvene to share and discuss their findings in one large discussion.

Huwe said the alliance management team also instituted new “health-check–style surveys,” which measured “awareness, agreement, involvement, and impact,” to make sure the new culture was taking root. Huwe placed a special emphasis on the “agreement” piece.

“You have to have an understanding if the organization is really on board because if they aren’t you have to think of ways to get them there,” he said. “Senior leadership will be much ahead of the rest of the organization in their agreement to the process, so they need to understand that we’re not quite there yet, and they have to continue to work with the rest of the organization to get there.”

Out of Its Comfort Zone and into Global Pharma Networks

Bayer also embarked on several new measures to improve its reputation as a partner externally.

“We’re trying to leverage the partner’s strengths and capabilities and not trying to turn them into more like Bayer. This is causing us to get out of our comfort zone and expand the way that we think and the way that we work with partners,” said Kennedy.

Case in point, Bayer previously had a company policy limiting press releases to deal signings and phase 3 or later. However, the company has recently relaxed that internal standard to accommodate partners that were eager to issue announcements detailing successes in earlier stages of the drug development cycle. In addition, the normally process-driven company has taken steps to become more flexible. For example, it cut the number of steps in its governance process to approve a deal by more than half.

Bayer has in some cases chosen to collocate employees at partner sites, and it has also opened up business and innovation centers in regions around the world considered hotbeds of pharmaceutical activity, such as San Francisco, Boston, Osaka, Beijing, Singapore, and Berlin.

“We’re going to where the networks are already existing and not asking people to come to Bayer [headquarters],” said Kennedy, who added that the company can now take partners to these sites to give them an up-close look at Bayer’s affairs.

The company has established effective online platforms, hosted more partnering events, and increased its conference presence, even bringing actor Michael J. Fox to one show to speak about the company’s efforts around Parkinson’s disease. Today, half of the company’s top 10 products come from partner initiatives, accounting for more than half of Bayer’s revenues.

The opening slide of Kennedy’s roadshow presentation now says it all: “Bayer is a partnering company.”

Huwe and Kennedy had more to share about Bayer’s partnering transformation, so make sure to use your Summit registration information to catch the full presentation in the Summit portal. While you’re there, peruse more than 20 other insightful sessions from the first-ever virtual ASAP Global Alliance Summit.

Tags:  alliances  Bayer  Christoph Huwe  collaborations  Digital Technologies  Global Pharma Networks  Michael J. Fox  Michael Kennedy  Open Innovation  partnering  partners  strategic  transformation 

Share |
PermalinkComments (0)
 

Finding Opportunity in Disruption: Pivot your Partner Strategy

Posted By Norma Watenpaugh, CSAP | Phoenix Consulting Group, Saturday, August 29, 2020

Have you rethought your partner ecosystem strategy in terms of what new opportunities lie ahead? Are you prepared to find the opportunity in disruption? We can assume that business as usual is not going to work in today’s volatile business climate because business has become unusual. Yet, disruptive times are times of great opportunity for those who are alert in spotting them.

Shortly after the 2008 Great Recession, I dusted off a white paper written in the aftermath of the dot.com implosion in 2001. Based on discussions with the alliances leaders, I learned that Cisco had doubled down on their alliance strategy to buffer the impact. By continuing to invest in alliances and realigning their strategy, Cisco generated 12% growth in alliance revenue during a time of general economic contraction and while the rest of their business was struggling.

In 2008 it was the financial sector that went into meltdown.

A colleague of mine worked with partners specializing in the financial sector. I erroneously assumed that his business had cratered with the financial institutions. I was wrong. Business was booming. Financial institutions were facing mergers, acquisitions, and consolidation. They were addressing compliance and regulatory issues that had been overlooked, leading to the crises, and were planning for new regulations and compliance issues that they anticipated would be legislated. My colleague was in a unique position to help solve the big problems these businesses are facing.

In the Covid economic crises, ecosystems are again shifting to address new opportunities: work from home solutions, tele-medicine, contact tracing, collaboration on therapies and vaccines. How can you pivot your partner strategies to survive and take advantage of new opportunities?

Follow the shifts in buying behavior. Spending might be reduced in a recession, but it also shifts.  Buying behavior changes. Smart businesses realign their strategies to take advantage of those shifts. The sudden work from home mandates created enormous opportunities. Microsoft and Google started promoting their web-conferencing tools aggressively and created programs and incentives for their partners to take advantage of the trend.

Solve the big problems created by disruption. Logistics went through a major disruption as retail goods shifted from storefront to webfront buying. The transportation network was in a frenzy rescheduling planes, ships, and trucking to serve this enormous shift. This dynamic and sudden shift required companies that normally compete to collaborate more effectively. An example, a business that uses Mercury Gate for inbound freight but might use JDA for international ocean shipping. In order to get shipments from point A to point B, these two transportation platforms needed to be able to share information and communicate in real time.

Leverage the benefits of shared costs and shared rewards. Partners are the ultimate ‘do more with less’ strategic play. Partners combine forces to provide even stronger customer value proposition at lower costs. Half of the assets and expenses are on your partner’s books.

Partner marketing has always been a great cost share opportunity. A marketing colleague shifted all marketing spending to co-marketing with partners resulting in lead generation and shared costs. A bonus of this strategy was that cross marketing on partners’ house lists yielded much higher quality leads. He achieved a higher quality sales funnel at half the costs!

There are opportunities for those who can address the pain points created by disruption and provide solutions. How can you realign your partner ecosystem strategy to focus on where companies will be compelled to spend to stay viable? Disruption creates opportunity and those who recover successfully will be those who can pivot their strategy to take advantage of the changes.

Norma Watenpaugh , CSAP, is a founding partner at Phoenix Consulting Group, which specializes in helping companies find more value in their most important strategic business relationships. This blog was originally posted on August 25, 2020 in LinkedIn.

Tags:  acquisitions  alliance leaders  Cisco  co-marketing  compliance  consolidation  ecosystem  financial sector  mergers  Norma Watenpaugh  partner  partner marketing  partners  Phoenix Consulting Group  strategy 

Share |
PermalinkComments (0)
 

Pharma Alliance Veterans Examine the Increasingly Thin Line Between Alliances and Integrations

Posted By Jon Lavietes, Friday, August 21, 2020

In pharma, the lines between business development and alliance management are blurring in many respects. The “buy” and “partner” functions no longer reside in separate spheres. Alliance managers are increasingly being pulled into mergers, acquisitions, divestitures, and carve-outs. Both alliance agreements and M&A deals, and the larger programs they are a part of, are getting more complex. What alliance management skills serve these types of transactions well? What are the biggest differences between alliance and acquisition environments? Should alliance managers think about adding the M&A skill set? These are just some of the topics bandied about in the 2020 ASAP Global Alliance Summit on-demand roundtable “Navigating the Differences Between Alliances and Integrations—‘Snowboarding for Skiers.’”

Moderated by Nick Palmer, managing director at BTD Consulting, a pair of longtime pharma alliance leaders and ASAP community mainstays—Brooke Paige, CSAP, former vice president of alliance management at Pear Therapeutics and ASAP board chair, and Steven Twait, CSAP, vice president of alliance and integration management at AstraZeneca—joined Palmer’s colleague acquisitions expert Carlos Keener, managing partner at BTD Consulting, in a discussion about these two merging worlds in a two-part roundtable—the panelists convened before and after the live portion of the Summit.

“Secret Superheroes”: M&A Draws On Alliance Managers’ Clairvoyant Powers

Palmer began by asserting that senior management has recognized that alliance managers have valuable transferrable skills that apply to merger, acquisition, and divestiture activity.

Paige expanded on this notion by noting that seasoned alliance managers come with a solid understanding of contracts, lots of practice articulating strategy, and a track record of running high-level cross-functional teams. But most of all, alliance managers possess “a mind-reading superpower,” she said with a laugh.

“We are actually mitigating risks and taking care of issues before they’re even experienced by the companies themselves. We’re almost secret superheroes,” she explained.

Twait added that alliance management’s familiarity with governance structures is becoming invaluable in transaction negotiations. In addition, his team is being asked to play a role in executing transition services agreements (TSAs), services one company pays another for after a deal closes. TSAs can expand an alliance practitioner’s knowledge base as these agreements can potentially involve larger organizational initiatives in a variety of areas, including but not limited to regulatory, manufacturing, finance, and technology.

The Alliance Win-Win vs. “What Does This Mean for Me?”

Keenan felt that M&A groups have a lot to learn from alliance management culture.

“Alliance management brings a number of good practices that a lot of M&A deals should be thinking about, but aren’t,” he said. “‘I bought you, and therefore you are going to do it my way’ or ‘I’m bigger than you, and therefore you are going to do it my way.’ Obviously, in an alliance, you’re not allowed to make that kind of assumption,” he said, describing a common but, in his mind, foolish M&A mindset.

Culture cuts both ways, however. Some alliance norms aren’t common in investments and divestitures, which could lead to some awkward moments if alliance managers aren’t careful. For example, where the beginning of an alliance is often marked by optimism—companies are excited by what a partner can bring to the table—fear stalks the rank and file immediately after an acquisition.

“In alliances, we’re always looking for the win-win,” said Twait. “Not everyone will win when you’re integrating an entity… Not everyone sitting around the table may have a job after this acquisition fully closes. Alliance managers are well prepared to think about some of those human risks that could surface in an acquisition.”

“When team members learn about a new alliance, the question is usually, ‘What does this mean for my company?’ And when team members or employees learn about a new acquisition, the question becomes personal: ‘What does this mean for me? Will I have a job?’” explained Paige.

Paige later prescribed potential solutions for dealing with the human element. In the past, she has led teams that have utilized town halls, backgrounders, and slide decks to communicate why senior leadership made a deal and what the acquiring company was expecting from its new asset. Paige strongly recommended partnering with HR and conducting “listening tours” to address employees’ concerns.

“The elements of things we would do in an alliance launch or in a new team member onboarding can really add a lot of value and be applied in these integration efforts,” she said.

Accentuate the Positive, but Not at the Expense of Authenticity

The subject came up again later in the post-Summit discussion. Keenan had a word of advice for communicating to employees of acquired companies: “not trying to cover it up, not trying to be overpositive, not overpromising up front is so critical to an integration.”

Yes, it is important to put a positive spin on the transaction and how things will transpire in those first several months. However, it should never be at the expense of authenticity. He recalled one instance of an investor relations professional taking the wrong tack in post-transaction communication efforts.

“The view was, ‘We just have to wow the employees. We have to ignore the bad stuff. We have to overwhelm them with good news.’”

By contrast, Keenan juxtaposed that case with the story of the “best Day One” he had ever seen in a transaction. The head of the acquiring company was up front about why his organization bought the acquired entity, how much it paid, and what it was going to do to make that money back.

“The individual was very transparent,” he recalled. “He walked the message through shift by shift, group by group, answered every question. When there was an I-don’t-know, that was perfectly fine. It was, ‘I don’t know now. We’re not knee-jerking into a plan immediately because we want to take a little bit of time to work out what we’re going to do, but we will tell you by date x.”

In other words, Keenan concluded, “It’s not bad news that causes problems, it’s uncertainty.”

Time Lords, Short- and Long-Term

Another potential blind spot: the contrasting timelines of mergers and alliances. In pharma, alliances are expected to last more than a decade. Alliance managers will be more judicious in pushing back on their partner counterparts knowing that they will be working together for several years. M&A transitions, on the other hand, happen over the course of several months.

“A seasoned alliance manager could take too long-term of an approach to the project,” said Twait. “There will be tradeoffs you need to make. I don’t want to say that you don’t want to be as collaborative, but you just need to recognize that you may need to make short-term decisions that may not seem like it will be best in the long term, but there may not be a long-term relationship.”

Keenan pointed out that senior leadership usually fuels this short-term thinking. The process of integrating a new entity is fast-paced and often closely observed by investors with high expectations.

“You have senior management pressure to actually deliver on the business plan from a financial standpoint, to deliver on whatever promises were made in the announcement. There’s also a need to generate momentum from an emotional standpoint, to demonstrate success to retain staff performance, staff morale, talent retention, and so on.”

Later in the discussion he reiterated that integrations, in contrast to alliances, are an “event, not a process,” and asserted that the old saying about “perfect being the enemy of good” is an appropriate mantra for integrations because they normally require companies to find quick solutions.

“Let It Go”: Thick Skin Required for Integrations

All of the panelists agreed that alliance managers thinking about getting a flavor of the M&A world must get accustomed to a little sandpaper. Twait insisted that those on the front lines of mergers and acquisitions will need a “thick skin” because tumultuous conversations and events are par for the course in these types of transactions. He invoked the famous song from the movie Frozen in cautioning alliance managers that they will have to learn how to simply “let it go” if they want experience in this area.

Paige concurred. “If you have a systemic aversion to delivering bad news or disappointing news, that might be the rule-out criteria that this might not be the role for you.”

Keenan looked at the issue from the other side. “If your integration approach is to deliver everything on time and in budget, leaving bodies along the way, then you are likely not going to be a good alliance manager. But to be honest, you’re likely not going to be a good integration manager, either. Yet again, the skill sets are actually quite in common.”   

Flesh Wounds: The Meaning of Life in M&A

Later in the conversation, Palmer asked the panelists if alliance managers are guilty of living in Monty Python’s world—“always look on the bright side of life”—and not fully acknowledging the turbulent nature of integrations and divestitures.

Twait joked that “in an integration, you will have multiple flesh wounds. ‘I just cut your arm off!’ You say, ‘No you haven’t.’” Twait was making the point that alliance managers are often resilient in the face of change in the way “the Black Knight needed to be.”

“So we’re not yet dead,” quipped Paige.

“Navigating the Differences Between Alliances and Integrations—‘Snowboarding for Skiers’” isn’t dead yet, either, at least for Summit registrants, who can still use their registration credentials to watch this roundtable and gain numerous other insights shared by the panelists throughout the discussion.

Tags:  acquisitions  alliance agreements. M&A deals  Alliance managers  AstraZeneca  Brooke Paige  BTD Consulting  Carlos Keener  divestitures  mergers  Nick Palmer  Steven Twait 

Share |
PermalinkComments (0)
 
Page 3 of 93
1  |  2  |  3  |  4  |  5  |  6  |  7  |  8  >   >>   >| 
For more information email us at info@strategic-alliances.org or call +1-781-562-1630