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Roche, PTC Examine the Small Biotech–Big Pharma Relationship at 2013 Global Summit

Posted By Administration, Friday, June 20, 2014
Originally posted on 3/11/2013

Where Manoj Bhatia, CA-AM, senior product marketing manager of go-to-market strategy for the midmarket at Cisco, covered “David-Goliath” partnerships as they relate to the tech industry, Pannie Trifillis, Ph.D., CA-AM, director of alliance management at PTC Therapeutics, and Christophe Sarry, CA-AM, global alliance director at F. Hoffman–La Roche, tackled the issue from the pharma perspective in one of the final sessions of last week’s 2013 ASAP Global Alliance Summit in their presentation “Does Size Matter?: Handled Skillfully, Alliances Between Small and Large Companies Can Reap Big Benefits for Both.”

PTC and Roche are currently working together on two major collaborations. A few years ago, they first engaged around GEMS (Gene Expression Modulation by Small Molecules) technology. They formed a second initiative—one of the 2013 Alliance Excellence Awards runner-ups in the Individual Alliance category—dubbed the Spinal Muscular Atrophy (SMA) alliance in which the two companies have teamed up with the Spinal Muscular Atrophy Foundation to find a cure to a devastating disease that takes the lives of thousands of infants each year.

The two companies make for an interesting contrast. In the wake of its acquisition of Genentech, Roche now essentially has two large R&D organizations to manage. Contrast that to PTC, which has fewer employees (125) than Roche has partners (more than 150).

As the session title might suggest, you got the sense from both Trifillis and Sarry that the answer to the posed question is that the relative sizes of a biotech and a Global 1,000 drug manufacturer end up dictating the roles each plays in an alliance primarily, not the power dynamics of the relationship. The two scientists fittingly opened with a nature analogy to describe a “symbiosis” between the two entities; in the depths of our natural bodies of water, the cleaner shrimp species gets its nourishment by cleaning parasites, insects, algaes, and other matter off of the moray eel—the latter is essentially pampered with a bath, while the former enjoys a free meal.

Similarly, large pharmaceutical players and small biotechs have common goals: to originate new therapies, obtain regulatory approval, garner support from payers, be first to market, and maximize drug sales, according to Trifillis and Sarry.

This is not to say differences don’t exist. Small pharmaceutical companies are flexible, focused, nimble, have direct oversight from the company’s most senior management, and tend to be highly innovative. They also are limited financially as compared with their bigger brethren. On the other hand, big pharma has a significant wealth of available resources, and can reach high economies of scale with its global operations. Its large alliance portfolio enables an exchange of information across alliances and a high degree of learning internally.

Of course, with size comes a little more complexity and red tape, as processes must be set up to streamline operations. And, yes, these processes do impact the speed of decision making for an alliance.

“We can’t work without [these processes] as a large company,” said Sarry, who added that one of the primary challenges faced by the bigger organization is aligning resources and ensuring that they go to the right projects.

Trifillis saw one major benefit to the sharply distinct corporate cultures—the differences justify alliance management.

“We have a job,” she quipped.

Harnessing these differences brings great benefits to both sides. Biotechs provide large pharmaceutical companies: 1) early drug discovery capability, 2) specialized expertise (e.g., orphan drugs), 3) flexibility and faster decision making, which can help advance a program far more quickly than a large pharmaceutical company ever could, and an 4) innovative and entrepreneurial atmosphere.

A company like Roche brings to PTC a high degree of cost- and risk-sharing. With its abundant resources, Roche can leverage technology for new therapeutic areas and maximize the smaller partner’s expertise (particularly in expensive areas like cardiology and oncology which might be out of the smaller entity’s reach). On the commercial end of the drug development cycle, the large pharmaceutical’s existing sales and marketing engines can help drive the biotech’s drug to success in the marketplace. If nothing else, a larger company’s involvement offers validation of the smaller organization’s research.

The keys to making these types of relationships work? It all comes down to respect and trust, said the presenters. Know what is important to the partner, define the needs of the alliance up front, establish criteria for success early, manage resources skillfully, and maintain transparency while keeping an eye on common goals along the way.

Sarry said that it is crucial to be proactive and detail the large company’s formal processes in the alliance’s start-up phase, long before the biotech is confronted with a situation that involves cutting through rolls of red tape. Trifillis agreed.

“If expectations are set up front that it will take this much time, we can live with it,” she said.

In the bigger picture, a strong relationship has many benefits, even if a compound never reaches the market. You never know when you may need that partner again down the road. Laws of karma are certainly at play, so both sides have plenty of incentive to play nice.

“Drugs die, but relationships last,” said Trifillis.

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Turning Snipers, Hostages, and Cheerleaders into Alliance Champions

Posted By Administration, Friday, June 20, 2014
Originally posted on 3/11/2013

Stepping in for Tom Halle, senior director of global alliances at Savvis, who was unfortunately down with the flu, Norma Watenpaugh, founding principal of Phoenix Consulting Group, began her talk at last week’s 2013 ASAP Global Alliance Summit by noting that according to her research, stakeholder alignment takes up a significant chunk of alliance managers’ time—anywhere from 50 to 70 percent, in fact. (Some in the audience jokingly ratcheted that number upward, to 150 percent or more.)

In this presentation, entitled "The Hardest Job: Managing Internal Alignment with the 'Apostle Loyalty' Model," Watenpaugh noted that the challenges associated with alignment include the fact that stakeholders can reside at all levels of buy-in (more on that later); they may be scattered across the enterprise; and they may have very different motivations and incentives. Given these conditions, she asked, "How can we get a grasp on the challenge in a way that gives insight into the solution?"

Enter the “Apostle Loyalty” model. This model looks at stakeholders based on their commitment and accountability to the alliance. Watenpaugh broke this down a little more simply: “Commitment means hearts and minds; accountability means necks and butts.”

The Apostle Loyalty model divides stakeholders into four categories or quadrants: Champions, Cheerleaders, Hostages, and Snipers. Champions are very evangelistic about the alliance; they believe in what they’re doing and can influence the organization accordingly. Naturally, alliance managers should be in that quadrant and, in the ideal world, everyone would be.

But of course, the real world often falls far short of ideal. The next category, Cheerleaders, is made up of “great supporters” who “don’t have skin in the game,” said Watenpaugh. They can be fickle if things start going south in an alliance, and they may bail on it when the going gets rough by saying, “I don’t want to be associated with this one!”

Hostages—or “oxygen thieves,” as one audience member labeled them—do the bare minimum to support the alliance and nothing more; “you’re not going to get much more out of them,” Watenpaugh acknowledged.

The final category, Snipers, are not supporters of the alliance at all; far from it. “They can be dangerous—they can really undermine you,” said Watenpaugh.

So how to get Cheerleaders, Hostages, and Snipers into the Champion category? Is it possible? Not 100 percent of the time, of course, but it can be done, Watenpaugh said. She used the example of a successful alliance between Savvis and SAP, which have partnered to provide SAP’s Hana memory-based database on a hosted model. SAP has the product, while Savvis excels in hosting and network capabilities and is a leader in the cloud, with a rich network of OEMs, VARs, and systems integrators.

To drive this alliance forward and ensure maximum alignment, stakeholders were identified, listed, and scored according to their commitment, accountability, and influence, and by role (i.e., sales, marketing, etc.). Important questions to ask include: Who do the influencers influence? What do they care about? What are they accountable for? How are their contributions measured and rewarded? What do they want out of the alliance?

The next step for SAP and Savvis involved leveraging the influence of a senior executive champion, developing a draft alliance marketing plan, and investing substantially in the alliance. This executive assigned sales quotas, gave salespeople new leads, and “made them money” while publicizing early wins, according to Watenpaugh. With the ever-difficult Snipers, a “bandwagon strategy” was employed—building on visible wins and continually inviting them in. But Watenpaugh cautioned: “Sometimes you can move [Snipers] over, sometimes you can’t; sometimes the only recourse is to move them out.”

As for the other categories, the strategy for Champions was to “keep them in the game, use their enthusiasm to influence others, engage them to break down barriers, and give them the data they needed to demonstrate value,” Watenpaugh explained. Cheerleaders were kept aligned by conferring more ownership of the alliance on them, getting them more involved by, for example, having them present in key meetings and other forums. For Hostages, the emphasis was on helping them understand the big picture, recognizing their contributions, and showing them how the alliance’s success was actually their success.

This strategy for alignment was directly responsible for the success of the alliance and the Hana product, said Watenpaugh. In fact Hana was recognized as revolutionizing the cloud platform market segment by Bloomberg, Reuters, CNBC, and other media outlets. It was good for both companies, and as an added benefit, it boosted their global alliances people so they got “a seat at the grown-up table.”

Finally, the success of this alliance and its stakeholder alignment strategy led to some “Aha! moments” noted by Watenpaugh, including these: Gaps in what you know about stakeholders are insights in and of themselves; sometimes just having the conversation about alignment can drive alignment; success breeds success—everyone wants to be aligned with a winning project (this is the bandwagon effect); and even when you think people are not listening or are not receptive, they actually are—“no” may mean “I heard you,” while “maybe” just could mean “help me say yes.”

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Levels of Engagement: Strategy, Sun Tzu, and Alliance Success

Posted By Administration, Friday, June 20, 2014
Originally posted on 3/10/2013

What do plastics, garbage, health care, and Sun Tzu have in common? All of these were components of a presentation given on the final day of the 2013 ASAP Global Alliance Summit, entitled “Laying a Solid Foundation: Building an Internal Support Structure for Alliance Success.” In it A. J. Novak, strategic business director for Waste Management, Inc., discussed a multiparty alliance in which his company was involved, augmented by strategic selling advice from LaVon Koerner, CEO of Revenue Storm.

Novak said that in moving from a “demand capture” to a “demand creation” strategy, Waste Management asked, What do customers need to be successful in their marketplace? Looking at health care, Waste Management saw an industry trying to become more green and eco-friendly. So the company contacted 10 suppliers to the health care industry and got them together for a meeting, trying to devise more sustainable plastics and better solutions for the environment. Many of those companies were competitors—which made for “some very cautious discussions in that room,” according to Novak.

At this point, Koerner interjected a quotation from the ancient Chinese writer Sun Tzu, author of The Art of War: “The key to victory is not defeating your enemy, but defeating his strategy; therein lies his vulnerability.” Koerner said that in the heady rush to go to market, partners sometimes neglect their sales strategy—a fatal error. “It contains the DNA or genetic blueprint on what we’re going to do day-to-day in the field,” he said. “That’s dictated by the strategy, so if you’re unclear on the strategy level, you’re going to be unclear on the behavior level.”

“We did not have a strategy early on,” Novak acknowledged. “We thought we did. It was difficult to measure the success of the team, because we weren’t aligned to a strategy, not only in sales but in marketing and elsewhere.”

Koerner outlined four options, or levels, of engagement which are key to understanding one’s own—and one’s competitors’—strategy. Level 1 is transactional—like going through the drive-up window at McDonald’s or Burger King. Level 2 has a process focus, usually oriented around some known need, such as selling integrated solutions. Level 3 is a business focus—such as a “business improvement value proposition.” Finally, level 4 is a partner focus—where what is being sold to the customer is actually a partnership. Although Koerner cautioned, “Just because you use the word ‘partner’ doesn’t mean you’re at this level 4.”

What does this look like in practice? “We created a level 3 value proposition around sustainability in plastics in the health care industry,” Novak explained. “By aligning to that strategy, [sales teams and partners] were aligning to a level 3 strategy. It allowed us to accomplish an awful lot in five months.”

Koerner noted that in researching the Web sites of various companies on the list of Global Summit attendees, he found that most of their messaging related to levels 1 and 2 selling, with very little pertaining to levels 3 and 4. Whatever the strategy is, the messaging needs to support it. Koerner also cautioned against incomplete alignment—just trying to align sales and marketing, for example. “Everyone has to be aligned to the strategy, then by default they’re aligned to each other,” he concluded.

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“Bond. James Bond. Alliance Manager”

Posted By Administration, Friday, June 20, 2014
Originally posted on 3/10/2013

Daniel Craig couldn’t make it, and John le Carré and Gary Oldman were also regrettably no-shows, but one of the final presentations at the 2013 ASAP Global Alliance Summit was nonetheless a very different way of looking at an increasingly common phenomenon: collaborations involving coopetition.

Using a number of stills from the recent James Bond movies to illustrate their points, as well as an engaging paper-airplane building, marketing, and buying activity to start things off, Helen Morin, global alliances director at SAS, and Scott Van Valkenburgh, senior director of global alliances at SAS, presented a number of concepts that should help alliance professionals more safely and successfully work their way through the often cloak-and-dagger world of coopetition alliances in their presentation, “Tinker, Tailor, Soldier, Spy: Coopetition Alliances in Business, History, and Today’s Global Marketplace.”

While this presentation might have been more Quantum of Strategy than Tinker, Tailor, it got off to a great interactive start with an exercise in which a number of tables were designated “manufacturers” and given the materials (in sealed manila envelopes) to build paper airplanes. Each table group then had five minutes to open their envelope, come up with a design, and then build as many airplanes as possible, before time was up and several designated “buyers” came around to inspect their products and see if they wanted to buy.

Our table, for example, made quite a number of what we thought were very serviceable, well-designed blue paper airplanes. However, it turned out that the buyers sent to our table had been given specs that didn’t match those of our planes: they needed pink aircraft with dots on them—available at the table next to ours. Our “sales rep” bravely tried to form an alliance with that next table, only to find she had been beaten to the punch; the pink-dot planes were themselves the product of an alliance between two nearby tables, and we were out of luck, stuck with an inventory the market didn’t want.

The lesson here? “You can’t do it all alone,” said Morin. “In some cases it’s the customer who’s telling us whom to partner with.”

Other lessons included: Engage executives—some things will happen at the grassroots level, but you can’t get traction in an alliance if you don’t get senior leadership involved; align goals and expectations so that compensation will drive behavior; lay out a strategy and align everyone around it; and perhaps most important in situations involving coopetition, segment the business—define where the “ring fence” is, and where are the barriers not to cross. As Morin put it, “Yes, we’re going to compete there, but we’re going to work together in these other areas.” She used the example of Netflix and Amazon, which vigorously compete in the movie streaming/rental business, but Netflix runs its entire operation on Amazon’s platform.

As in any collaboration, Van Valkenburgh urged those involved in coopetition alliances to resolve issues quickly, because “bad news does not get better with time. If you don’t resolve issues up front, a cancerous growth appears underneath, and it will undermine and collapse the growth of the partnership.” Diffusing emotion, and establishing strong governance grounded in “principle-based decision-making,” à la the character “M” in the Bond movies, will also help when having “those uncomfortable conversations,” he said.

Finally, Morin and Van Valkenburgh had just a couple more words of wisdom from the murky world of coopetition. “When you have transparency, trust builds,” Van Valkenburgh said. And: “If you spend your time fighting over the breadcrumbs instead of opening the bakery, you’re not going to have a lot to eat.”

As of this writing, we could neither confirm nor deny that the presenters’ next ASAP talk will be entitled “Skyfall: The Spy Who Allied with Me.”

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Dancing with the Alliance Stars

Posted By Administration, Friday, June 20, 2014
Originally posted on 3/9/2013

The 2013 ASAP Global Alliance Summit is over, but the impressions it left us with are many—from the Alliance Excellence Awards Dinner to the evening receptions to the breakfast roundtables to the many great speakers and presenters. Thursday, March 7, the last day of the Summit, saw some outstanding presentations, including “What Alliance Pros Can Learn from Dancing with the Stars: How Trust, Alignment, and Some Nimble Footwork Can Help Your Career Performance,” a novel multimedia extravaganza led by Robert Porter Lynch, CEO of The Warren Company and ASAP founding chairman, and Patricia Garcia, formerly associate director at Sanofi and a former competitive ballroom dancer.

Using clips from The King and I, Dancing with the Stars, ice dancing, and pro wrestling, Lynch and Garcia looked at the commonalities between alliances and various forms of dance: the concepts of synergy, synchronicity, and symphony—or as Lynch put it, referring back to those words’ Greek roots, “We’re going to tell you how to ‘syn.’”

It all comes down to alignment: alliance partners, like dance partners, must be in synch. And the creative potential inherent in alliances must be harnessed in some way, yoked to a series of agreed-on “steps” that keep the partners together in rhythm.

“Alliances can be a creative engagement,” Garcia explained. “But how do we access the creativity? Alliances reveal the heart and soul of a company. Dance reveals the heart and soul of civilizations; they’re measured by their art. When you come together with someone else who has their own culture, it gives you an opportunity. You have to have the desire to interact, but also the desire and the will to be acted upon. That is sometimes the tougher side of things, to have your heart and soul be entered by someone else.”

In order for that to happen, there has to be trust. Lynch demonstrated this idea graphically with his Ladder of Trust diagram, with the various trusting behaviors on top and a number of alliance-busting, distrusting behaviors lying “below the belt.” Without trust, on which Lynch has written extensively, the alliance’s foundation will break down, and what could have been a promising collaboration falls victim to “the tornado of distrust,” as Lynch termed it.

The clip from Dancing with the Stars, like the others used, was fascinating, and showed the transformation of the amateur of the pair, a female pro wrestler, from using her “assets” to attack and defend in the wrestling ring, to using her newly acquired abilities to collaborate and get into beautiful alignment with her professional male dancing partner.

This showed, said Garcia, that “depending on how you set the stage, you can drive people up the ladder [of trust] or down, bring out the worst or the best in people, in any human being.”

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