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How Contract White Space Becomes the Gray Area of a Deal (Part Two)

Posted By Genevieve Fraser, Monday, October 30, 2017
Updated: Saturday, October 28, 2017

This picks up where ASAP Media left off in Part One of our coverage of “Reading Between the Lines: Living in Contract White Space” explored the “gray area” between contract signing and actual implementation on day two of the 2017 ASAP BioPharma Conference September 13-15 in Cambridge, Mass. USA. The presenters were Christine Carberry, CSAP, chief operating officer at Keryx Biopharmaceuticals, Andy Eibling, CSAP, vice president of alliance management at Covance, the drug development business of LabCorp, and Brian O'Shaughnessy, a partner at Dinsmore & Shohl and president and chair of the board of LES, the Licensing Executives Society (USA and Canada), which focuses on licensing and commercial transactions involving intellectual property (IP) rights.

All presenters agreed that in general no one talks about when things go wrong. People focus on success. But change agents happen. People need to think more about likely situations that arise, about what can change. According to Carberry, biopharma negotiations offer special problems when teams spend 80 percent on work related issues and 20 percent on the exit. The exit can be what’s tricky.

“How should you run an alliance?” Eibling asked, shifting the focus of the discussion. “There’s a boilerplate we’d like to follow vs. figuring out what happens when everything blows up. Think of audit provisions; once you pull the trigger, everyone shifts into distrust mode.”

He reminded them that governments impose transparency and accounting, a carefully defined system of disclosures so the process is established. But it’s your responsibility to address issues early on, before they become an issue. 

“Trust is everything in an alliance. Trust is key,” Eibling stated. “Some think controls run in the face of trust, but it’s the opposite. The process helps establish trust building. If you have trust, you can more easily get to benchmarks. My motto is ‘no deal without a meal.’ Sit down over lunch with your counterpart to build trust.”

 

Shifting focus once again, Eibling questioned what’s missing from agreements. “External communications need to be on-going. ‘What’s material and what’s missing’ is what’s needed when everything blows up. The question is, what can be done during the deal making process to improve success?”

O'Shaughnessy: “Licensing is a full contact sport and needs the full team—lawyers, tax experts, scientists, business folks. Speaking from a LES prospective, they don’t appreciate the growing field of alliance management, so there’s not an effort to bring alliance into the deal process. They need to understand that an alliance team can analyze the details to see problem areas.”

“I had no idea what went on after the deal was signed.”

“Too often, LES views alliance management as a hindrance, as the folks who throw up roadblocks. Alliance management needs to stay in the background and define simple defining principles: This is how we work—from cultural differences to operating principles. When in the grey space, the alliance team will make it work, will look to principles to get through the grey area.”

Eibling: The alliance will shepherd the process, but the alliance needs to remain in the background and let others negotiate. The alliance folks tell them to finish the deal and then we’ll focus on governance, commitments etc. Meanwhile, they need to remain vigilant to see what was contentious, to remain alert to problem areas.

This interaction continues in Part Three of ASAP Media’s coverage of the 2017 ASAP BioPharma Conference session, Reading between the Lines: Living in Contract White Space.”

Tags:  ”First patient  alliance management  alliances  Andy Eibling  Brian O'Shaughnessy  change agent  Christine Carberry  compromise  contract  Covance  Dinsmore & Shohl  due diligence  first visit”  governance  Implementation  Keryx Biopharmaceuticals  Licensing Executives Society 

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How Contract White Space Becomes the Gray Area of a Deal (Part One)

Posted By Genevieve Fraser, Friday, October 27, 2017
Updated: Thursday, October 26, 2017

There’s a place—a twilight zone— that exists between the high “expectations of a deal well struck and the hard reality of implementation. “Reading Between the Lines: Living in Contract White Space” explored that “gray area” on day two of the 2017 ASAP BioPharma Conference September 13-15 in Cambridge, Mass. USA. The presenters were Christine Carberry, CSAP, chief operating officer at Keryx Biopharmaceuticals, Andy Eibling, CSAP, vice president of alliance management at Covance, the drug development business of LabCorp, and Brian O'Shaughnessy, a partner at Dinsmore & Shohl and president and chair of the board of LES, the Licensing Executives Society (USA and Canada), which focuses on licensing and commercial transactions involving intellectual property (IP) rights.

O'Shaughnessy cut right to the chase. “Typically, the problem is that people negotiating the deal are talking the same lingo. You need to look at common deal terms that cause collaborations to falter. Too often short shrift is given to definitions, to defining terms. Spelling out definitions doesn’t seem important because you and the others know what you mean. But contracts need to be written so non-experts understand. Spend time writing definitions in plain, simple terms. For example, technology patent and patent applications are two different things.”

 

“Three months from the signing of the contract, you will not be living in the world you had envisioned,” Christine Carberry added. “When you are caught up in the excitement of creating the deal, it’s natural to avoid looking at inherent risks. The likelihood is that X drug may not move to blockbuster status. Then, how do you navigate? How do you avoid having the reality of the situation, the reality you must deal with, keep from pulling people apart?”

 

“There areas often missing that are not even gray space—with nothing there to give guidance,” Andy Eibling began, throwing it out to the audience. “Name some areas in a contract that cause issues. What are your pet peeves?” Responses included:

  • Milestones based on study initiation (When does a study really start?)
  • “First patient, first visit” doesn’t mean what most thinks it means.
  • Every single compromise is going to come back—because the people who work on the contract were not part of the compromise.
  • Implementation time is not realistic. The contract states six months, but WE KNOW it takes nine months.
  • There are definitions within definitions. Check to see if the contract is still in alignment.
  • Due diligence—Best efforts—Clear process is needed for dispute resolution. The idea that you will just specify “arbitration” doesn’t cut it. You need to set up a process.

 Carberry rattled off a few scenarios: You couldn’t come to agreement, so you punted. Even worse, you know going into a contract, tension exists, so you opt not to deal with it. And, it’s contentious because you know it’s likely to happen!

 

“You can come up with complicated solutions that sound great—but how to execute it is the issue. It’s important that alliance people are brought in early to assist with ironing out conflicts,” she emphasized.

 

Let LES, the Licensing Executives Society draft the front end and the company draft how it will work, O'Shaughnessy suggested. “How do we prevent this and that from becoming a problem—such as scheduling meetings? And there’s always a risk of shifting provisions. Business people like to say, ‘that’s all legal stuff. Let the lawyers figure it out.’ But what they figure out might not align with the business model. If I absorb more risk, I need more attention.”

Tags:  ”First patient  alliance management  alliances  Andy Eibling  Brian O'Shaughnessy  Christine Carberry  compromise  contract  Covance  Dinsmore & Shohl  due diligence  first visit”  Implementation  Keryx Biopharmaceuticals  Licensing Executives Society 

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Learning How to Choose the Best Options and Moves When Negotiating the Alliance Management Playing Field

Posted By Cynthia B. Hanson, Thursday, September 14, 2017

Assessing strategic options is at the heart of alliance management practice, especially in the negotiation processes. Game theory is the science of strategic decision-making, helping to streamline areas such as internal alignment meetings, steering committees, and alliance sub-committees. A new game theory workshop debuted front-and-center at the 2017 ASAP BioPharma Conference “Accelerating Life Science Collaborations: Better Partnering, Better Outcomes” at the Royal Sonesta Boston, Cambridge, Mass. on Sept. 13. “Strategic Decision Making & Negotiations: Learnings from Game Theory and AM Practice,” facilitated by Harm-Jan Borgeld, CSAP, and head of alliance management for Merck KGaA, and Stefanie Schubert, professor of economics at SRH University Heidelberg, guided participants through the playing field of game theory, providing insights on the speed and quality of decision-making practices. I spoke with the facilitators after the workshop about this fascinating topic and the practical applications for game theory.

 Stefanie: Game theory can be applied to any kind of situation. The basic idea of game theory is that you try to put yourself in someone else’s shoes and figure out what they will do before you make your own decision. It helps you find the optimal decision. It requires that you think about the player—the people who have to make a decision—possible strategies, and assess possible outcomes.

Harm-Jan: Game theory helps you understand how people think. In our workshop, we used game theory to enhance the decision-making, negotiating, and influencing skills of the alliance manager. It also teaches how to prepare for a negotiation and facilitates discussions on out-of-the-box thinking.

Stefanie: Influencing benefits from creativity. There are plenty of uncreative ways to influence, such as signing a contract or delegating. But why not be creative? The workshop uses lots of real-life cases, games, and exercises. For example, we use a simple negotiation game where two participants share a real cake. One player divides the cake; the other accepts or does not accept the division. If it’s a cake, it’s common to split it down the middle. But if it’s money, a company will not do it. Game theory takes the position that everyone loves the cake and wants the biggest piece, and it is strategic to offer only a small piece.  We use this game to discuss how to leverage negotiation power and discuss alternatives for optimal decisions.

Harm-Jan:  The workshop is practical and uses video clips and exercises as teaching tools.  We want participants to be able to use what they learn tomorrow. The cake actually is an analogy for dividing [assets]. It helps you understand how the other person makes decisions and prepares for disagreements. We also talked about how to build trust. There are certain ways to establish trust. One way is to always do what you say: Be predictable, engaged, and treat opponents as equals, and not engage senior management without agreeing beforehand. Most trust is created [and maintained] if not broken.

Stefanie:  When applying game theory, you need to simplify. It’s an analytical framework: If you have to make a decision, the outcome depends on the action of someone else. Central to game theory is the question: What is optimal for me to do if the outcome depends on the other party’s action? And it works in every culture or environment. 

Tags:  alliance management  alliance manager  alliance managers  decision-making  decision-making practices  engage  Game theory  Harm-Jan Borgeld  influencing skills  Merck KGaA  negotiating  outcomes  SRH University Heidelberg  Stefanie Schubert  strategies 

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NetApp’s Trackable System Garners Best Practice Accolades at ASAP Alliance Excellence Awards Ceremony: A Q&A with Ron Long, CSAP

Posted By Cynthia B. Hanson, Monday, April 3, 2017
Updated: Friday, March 31, 2017

Finding new ways to implement alliance management tools and processes is valuable for the entire ASAP community because it sets a new standard for best practiceswhether in the area of measurement, communications, conflict resolution, training, or other applications. This year the Innovative Best Alliance Practice Award was presented to NetApp at the 2017 ASAP Global Alliance Summit, “Profit, Innovation, and Value for the Part­nering Enterprise,” Feb. 28–March 2, at the San Diego Marriott Mission Valley, San Diego, California. This award highlights how NetApp has strived for exemplary partnering tools and practices. While many companies still try to manage partnering processes through spreadsheets, NetApp invested in technology and governance with stringent trackable processes that produce measurable results for its alliance co-selling program. The program assists NetApp and partner representatives proactively involved in account mapping, account planning, and pipeline management in the most difficult aspects of go-to-market alliances. The system also provides detailed reports on joint co-selling activities. I spoke with Ron Long, alliance director, who explained the progressive change undertaken that now acts as a valuable model for other companies tracking multi-alliance details.

What challenge were you problem-solving?
We were problem-solving the lack of ability to effectively manage and measure multi-alliance sales engagements. The challenge had to do with multiple partners pursing the same sale and having an impact when closing the deal.  The question was, “How does a system that is originated toward single-product sales measure revenue across several different companies?” We also wanted to improve the ability of teams to collaborate across multiple companies.

Describe some of the benefits of the new trackable system?
We were able to track investments and results, and that resulted in executive alliance growth. We also were able to track results for paying out commissions to salespeople. It was the impetus for growth and investment. When we could track those alliance partners, we had tangible data we could take to management and ask for investments for growth. Revenues have clearly improved through measurement and collaboration. We also use the system to set up sales pursuits to get partners to collaborate. This type of a problem is across multiple alliances, not just technology. Because it’s a problem that exists across multiple industries, it’s applicable outside the tech industry.

How did the new system evolve?
Two years ago, we started with some self-design, but we modified the sales tracking systems already in place with cloud technology, such as Salesforce.com. It’s adaptable because it’s a cloud-based service, and you can link in different information sources in the cloud. It’s easier to link that in than to do an in-house modification system. For governance, we do quarterly APRs, and each of the alliance leads added tracking of their progress, pipeline, revenue, investments, and training to ensure that what we’re doing plan-wise meets with results.

What ASAP tools and practices were useful when designing the system?
The greatest benefit came from ASAP Summit sessions that had to do with the overall management of multi-alliances. Also, we used several ASAP best practices as guideposts.

Tags:  alliance management  Alliance Managers  collaboration  governance  innovation  Innovative Best Alliance Practice Award  multi-alliances  multiple alliances  NetApp  partners  Ron Long 

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One Is Silver and the Other’s Gold: ASAP Summit Session Emphasizes Expansion Opportunities through Customer Renewal

Posted By Cynthia B. Hanson, Thursday, March 2, 2017

New customers can hold great opportunity, but don’t neglect the old accounts because they hold hidden gold that can maximize revenue through expansion. That seemed to be the main message Jeff Newton, CSAP, global strategic alliance manager at Cisco Systems, and his colleague, Manoj Bhatia, CSAP, worldwide sales and business development manager at Cisco, conveyed to the audience during their session “Accelerate Partner Sales through a Customer Success Methodology.” Then they explained how to do it. The talk took place at the recent 2017 ASAP Global Alliance Summit, “Profit, Innovation, and Value for the Part­nering Enterprise,” Feb. 28–March 2, at the San Diego Marriott Mission Valley, San Diego, California. Newton shared some thoughts from the session during an interview about his customer sales methodology.


How is the partner ecosystem changing/expanding to address new buying patterns?

From Cisco’s perspective, we are moving into lines of business where finance and marketing teams are making a lot of the decisions. It takes an ecosystem to deliver the right solution to the right customer. We need to ask how the changing ecosystem is impacting partners. We need to partner with the right people with the right technology. It’s really hard for one company to deliver the entire outcome.

Different people are making the decisions now. In the past, we would go into the IT department, find out the budget, and see how much product could be delivered. We have evolved to understanding what their pains are. To understand customers better, how can technology solve that problem? So it’s not really about selling product, it’s about selling solutions to business problems that the people in lines of business are having.

What is the role of alliance management in managing the customer?

It is good to understand what the customer is after. Ask yourself, what business problems are we solving? From an alliance management perspective, we need to put together the right ecosystem for the problem and solve the specific problem for each industry and vertical.

Please sum up your “customer success” methodology to drive an alliance to land, adopt, expand, and renew opportunities.

It’s about what the cost is to acquire a new customer. Companies spend a lot of time landing the new customer. Businesses forget to go back to that customer and find news ways to generate revenue with that customer. If you are adopting technology, you will be a lot more open. If you are helping a client build a data center, you may want to get into different lines of business to expand your sale. Also, we often don’t pay attention to sales teams, don’t focus enough on new opportunities, and we need to change our alliances to not only go after new business, but also expand together within the customer arena.

How can we measure our progress with customers?

There are some very different types of metrics we can look at. One thing I look at is the renewal rate for our support services. The industry average is about 90 percent, so if you go below 90 percent, you have an opportunity. It’s a compelling event to expand. The technology you have in your partner ecosystem will also help expand the sales and grow your footprint inside of a customer.

What are the best ways for alliance teams to lead this business transition and implement a customer success approach?

First, you really need to understand this methodology. Start looking at customers together in the same fashion. Ask how can we educate our sales teams on the ability to expand the opportunity and prepare for the renewal of the opportunity? How do we get our sales teams to think differently to engage with the customer? Look at the customer journey. Explore what they want to buy, and then evaluate it through a demonstration or something else, then the purchase, renewal opportunity, and then they can become your advocate inside the company. 

Tags:  alliance  alliance management  Cisco Systems  customer engagement  ecosystem  Jeff Newton  Manoj Bhatia  methodology  Partner Sales  technology 

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