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The Modeling and Management of Alliances: Workshop Takes Deep Dive into Three Models for Collaborative Business

Posted By Noel B. Richards, Tuesday, March 12, 2019

A preconference workshop delving into three different alliance models caught the attention of over a dozen pre-conference attendees at the 2019 ASAP Global Alliance Summit in Fort Lauderdale, Florida. Co-facilitators Ard-Pieter de Man, CSAP, PhD, Vrije Universiteit Amsterdam, and Dave Luvison, CSAP, PhD, Loyola University Maryland, instructed on the horizontal “sharing” model, the diagonal “specialization” model, and the vertical “allocation” model in the session “Building Your Collaborative Business Model.”

The two discussed how the sharing model is an alliance focused on sharing customers and information in order to generate more revenue for each partner, typically with a 50-50 split of this revenue. The specialization model is more about leveraging certain strengths or unique skills of each partner so that each can gain something they did not have before, resulting in the ability to increase revenue with new or improved products. Lastly, the allocation model works to reduce risk by delegating tasks that are a weakness for one company to a partner that expresses excellence in that specific area.

Once the co-facilitators established a baseline understanding of these alliance models, best management practices for each model and the hybridizations between them became apparent. “The bigger question is how you should manage these models, as not every model should be managed the same way,” Luvison pointed out.

The workshop co-facilitators also instructed on how to determine which specific framework is right for your alliance, based on the goals and purpose. The specific models are incredibly fluidconstantly moving, changing, and molding to specific needs, they said. Luvison and De Man then brought up the three things that need management across the boardincentives, relationships, and accountability. Additionally, they shared the idea that 70 percent to 80 percent of the problem in alliances is convincing people internal to the company rather than the partner.

After examining various methods of managing each type of alliance model, they encouraged the audience to split into groups and discuss best management practices. Though these practices may differ across alliance types, all group participants agreed upon the importance of consistent, fluid, and open communication among partner.

Also central to the discussion: as models adjust and change over the lifespan of the alliance, it is critically important that the alliance ensure that the partners are aligned and “on the same page.” Recognizing the scope and scale of each partnership and communicating about the alliance with the appropriate groups of people, notably the C-suite, is also fundamental to success. If one partner sees the alliance following a sharing model while the other recognizes it more as an allocation model, problems will arise. Ensuring and maintaining a mutual understanding of what model the alliance takes is vitally important.

“You’re half the battle. Getting your own organization on board with the alliance is quite important, so do this first, then get the partner on board,” said Luvison.

Once there is a clear mutual understanding of the model the alliance is founded upon, partners must turn inward and ensure consistency understanding within the company. This helps empower teams to deal with issues as they arise, they concluded. Though there are additional complexities in managing each model an alliance assumes, if self-awareness and open communication is pursued, the alliance and the companies involved will benefit across the board.

Noel B. Richards is a staff writer for ASAP Media. Stay tuned for more of the ASAP Media team’s comprehensive on-site coverage of 2019 ASAP Global Alliance Summit sessions on this blog, and in the weekly, monthly, and quarterly Strategic Alliance publications. 

Tags:  alliance  alliance model  allocation model  Ard-Pieter de Man  Dave Luvison  Loyola University Maryland  partner  sharing model  specialization  Vrije Universiteit Amsterdam 

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Building ‘Leadership Muscle’: Get Your Organization Ready for the ‘Partnering Marathon’

Posted By John M. DeWitt and John W. DeWitt, Thursday, March 7, 2019
Updated: Wednesday, March 6, 2019

Welcome to the new partnering race—where everyone is running as fast as they can, frantically trying to catch up to the customer.

Nina Harding, channel chief at Google Cloud, asked an important question at the October 2018 ASAP Tech Partner Forum in San Jose, California: “So how do you work with your partners when the customers are ahead of the ecosystems?” This is indeed an important question, given that “every single thing we do is new,” according to Pear Therapeutics Founder and CEO Corey McCann. He added, in a keynote at the September 2018 ASAP BioPharma Conference, that risks associated with new ventures “conspire to make partnerships not successful.” Stuart Kliman, CA-AM, partner at Vantage Partners, characterized the current playing field as “one of significant and ongoing change, which is driving new forms of collaboration, new kinds of alliances.”

Being successful on such a competitive playing field requires alliance practitioners to build their “leadership muscle,” the focus of the Q4 2018 Strategic Alliance Quarterly cover story, “Building ‘Leadership Muscle’: Are You and Your Alliance Management Organization Ready to Run the ‘Partnering Marathon’?” Building leadership muscle means giving your leaders the strength, flexibility, and endurance to withstand the breakneck pace of modern collaboration.

Why do you need this muscle? No matter your industry, regardless of the specific drivers, it’s almost certain that:

  1. Your company is “remixing” its build-buy-partner strategies;
  2. Partnering activity, especially nontraditional partnering, is exploding for your company;
  3. Your alliance organization faces an overwhelming workload;
  4. Your partnering strategy and execution require new thinking, skillsets, and tools.

If your company and its partners are evolving to catch the customer, then you should (or already will) be rethinking, reorganizing, and relearning:

  • Rethinking. Alliance leaders must continuously rethink partnering strategy and models in the context of disruption and new competitive threats, which are all-but-continuous now.
  • Reorganizing. If you aren’t thinking proactively about how you are organized and aligned to overall company strategy, you can be sure someone else is—and soon you will be thinking about it too, only reactively.
  • Relearning. Alliance executives require new skills and cross-industry knowledge for the new partners and ecosystems they interact with. Many alliance processes and practices require radical rethinking and streamlining if they are to remain useful for managing at the accelerating pace and exploding scope of partnering activities today.

“When all these things are changing around you, you can’t keep doing business as usual,” said Brandeis professor, consultant, and author Ben Gomes-Casseres, CSAP, PhD. “This means very often a change in company strategy [and] if the organization’s strategy is changing, then the alliance organization should change with that. That is fundamental.”

See the Q4 2018 issue of Strategic Alliance Quarterly to learn more about how alliance leaders are rethinking, reorganizing, and relearning while they build “leadership muscle.” John M. DeWitt is copy editor and contributing writer and John W. DeWitt is editor and publisher for ASAP Media and Strategic Alliance publications.

Tags:  alliance  Ben Gomes-Casseres  channel  collaborative  Corey McCann  cross-industry  Google Cloud  leadership  Nina Harding  partnerships  Pear Therapeutics  Stuart Kliman  Vantage Partners 

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Leaders ‘in a Time of Rapid Growth and Change’: Finalists for Announced for 2019 ASAP Alliance Excellence Awards

Posted By Noel B. Richards, Friday, February 15, 2019

Finalists Include Alcon Laboratories, Science Applications International Corporation, Keryx Biopharmaceuticals (subsidiary of Akebia Therapeutics), Thermo Fisher Scientific, Merck & Co., Merck KGaA, Darmstadt, Germany, Bristol-Myers Squibb, Cambridge Assessment English, Novartis, Incyte, Sanofi Pasteur, and Red Hat 

ASAP will honor companies and organizations, practices, and programs that exemplify exceptional performance in alliance management during the ASAP Alliance Excellence Awards ceremony at the 2019 ASAP Global Alliance Summit, which runs March 11-13 at the Westin Fort Lauderdale Beach Resort in Fort Lauderdale, Florida. This month, ASAP announced the companies that are 2019 Alliance Excellence Awards finalists: Alcon Laboratories, Science Applications International Corporation (SAIC), Keryx Biopharmaceuticals (now a subsidiary of Akebia Therapeutics), Thermo Fisher Scientific, Merck & Co., Merck KGaA, Darmstadt, Germany, Bristol-Myers Squibb, Cambridge Assessment English, Novartis, Incyte, Sanofi Pasteur, and Red Hat. See the official press release issued via PRWeb.

“This remarkable group of companies has demonstrated significant leadership in alliance management during a time of rapid growth and change for business—and for the partnering profession,” said Michael Leonetti, president & CEO of ASAP. “Our awards committee reviewed a number of outstanding nominees from diverse industries this year, and we’re pleased to recognize these exceptional partners and programs whose success stories and practices can serve as models for the alliance management community.”

Alcon Laboratories’ alliance program contains a complete set of fully documented best practices supported by information technology tools. With a small alliance group, they manage many partners through consistency applying these practices and tools.

 

Science Applications International Corporation (SAIC) has developed an alliance program covers not only the “hard” alliance elements, but also pays attention to the “softer” rules of the game, resulting in substantial contribution to revenues as well as recognition from partners. Partner tiering is consistently worked out across the strategic, financial, and relational elements of business.

 

Keryx Biopharmaceuticals (now a subsidiary of Akebia Therapeutics) and Thermo Fisher Scientific collaborated to resolve supply constraints to ensure that patients were able to access Keryx’s proprietary drug through agility and excellent teamwork at all levels of operation.

 

Merck KGaA, Darmstadt, Germany–Bristol-Myers Squibb’s alliance has operated with financial transparency and consistent best practices since its formation in China in the 1990s, a time when the Chinese market was much less accessible.

 

Novartis–Incyte’s decade-long collaboration covers the co-marketing and co-development of an oncology drug in split geographical areas. The alliance has applied best practices across the alliance lifecycle, and led the way for a foundation for a broader alliance mindset in the respective organizations.


Merck & Co. and Sanofi Pasteur built a joint venture for a new drug utilizing a governance model inspired by small, nimble biotech companies to ensure speed and flexibility. The commercialization phase of the new drug so far is very successful.

 

Red Hat completely revamped an alliance training program for its alliance and channel managers, providing a clear learning path for everyone with several checkpoints and feedback options that support managers in their learning. The alliance program has leveraged e-learning and digitization, supported by well-designed management processes.

Cambridge Assessment English teamed up with Future Learn and Crisis Classroom to deliver an online training program for volunteers who help refugees meet refugee needs by focusing on language support. Volunteers (8,000 thus far have signed up) are able to exchange their experience in addition to accessing formal learning modules.

 

Merck KGaA, Darmstadt, Germany developed its Joint Committee Self-Assessment tool after alliance surveys showed that decision-making in the organization’s alliances were too slow. This easily implemented tool helps committees improve their decision making has become standard in the Merck alliance toolkit.

Read the complete press release on PRWeb at http://www.prweb.com/releases/finalists_for_announced_for_2019_asap_alliance_excellence_awards/prweb16099885.htm. Stay tuned for much more coverage of the 2019 finalists and the stories behind their successes on this blog and in Strategic Alliance Quarterly and Monthly magazines.

Tags:  Akebia  Alcon  alliance  ASAP Alliance Excellence Awards  best practices  Bristol-Myers Squibb  Cambridge Assessment English  governance  Incyte  Keryx Biopharmaceuticals  Merck & Co.  Merck KGaA  Novartis  Red Hat  Sanofi Pasteur  Science Applications International Corporation  Thermo Fisher Scientific  toolkit 

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The Next Wave in Collaboration? Lessons from Platform Ecosystems, Part 3: From Governance Committees to Governing Principles

Posted By Contributed by Ard-Pieter de Man, CSAP, PhD, Friday, January 11, 2019
Updated: Wednesday, January 9, 2019

In my Q4 2018 Strategic Alliance Quarterly article about the emerging profession of the ecosystem manager, I mentioned that the most extreme examples of ecosystem management were found around platform organizations such as Facebook and Apple. What inspiration can we draw from the way these manage companies their ecosystems? New best practices are emerging that require us to rethink at least four of the tenets of alliance management. In the third and final article in this series on the topic, I discuss the evolution of governance practice and other ways in which ecosystem management is, could, or should influence the evolution of alliance management practices.

Governance: From Committees to Principles

Traditional governance structures contain committees and teams, each with their own tasks and accountability. Such governance structures have been proven effective in building bridges between organizations. Governance structures also had some downsides. With typically three layers of committees in alliances, decision-making could be slow. Moreover, they require much managerial attention, particularly from middle management. With an increasing number of partners, the risk of overloading managers with alliance work becomes real. Further slowing down of decision-making may result. The growth in the number of partners is limited by the capacity of managers to take them on.

Platform based ecosystems coordinate at least a subset of their partners based on principles and standardized governance processes. This increases their capacity to manage a higher number of partners. The developments around smart contracts also may help here in the future: agreed upon rules may be programmed into smart contracts, lessening the burden of governance. Smart contracts may at least partly replace work done by governance committees. An interesting question is whether this will lead to more or less standardization in alliance models.

What does all this mean?

Much of the partnering activity around platforms diverges from traditional definitions of alliance management. It involves new forms of collaboration that may not fit with how ASAP defines alliances. That does not mean it is not relevant for alliance management. First of all, alliances may evolve into or be replaced by these new forms of partnering. Second, companies will increasingly focus on optimizing the entire ecosystem around their platform including clients, suppliers, complementors, app builders, content parties and, of course, alliances. Defining alliances has always been difficult because there are many gray areas. With the rise of new forms of collaboration it is increasingly important for companies to understand all the shades of gray. Third, even though such new forms may be different from traditional alliances, opportunities for learning from them exist. Just like client supplier relationships and public-private partnerships learned from alliances, alliances may learn from platform based ecosystems.

These are reasons to look at collaboration more broadly rather than focusing exclusively on strategic alliances. This does not mean that all best practice developed since ASAP’s inception become irrelevant. It does mean we need to have a better understanding about when they work and when they do not work. Where they do not work we need to develop new best practices that help us ride the next wave of collaboration.

Ard-Pieter de Man, CSAP, PhD, is professor of management studies at the School of Business and Economics of the Vrije Universiteit Amsterdam. A longtime ASAP member, he also is a consultant to companies and not-for-profits.

ASAP Media encourages diversity of thought and opinion as partnering practice and the profession of alliance management continually expand and evolve. To contribute your voice to the conversation, on this or other seminal topics relating to business collaboration, please contact John W. DeWitt, editor and publisher of ASAP Media and Strategic Alliance magazines, at 646-232-6620 or jdewitt@asapmedia.org.

Tags:  alliance  alliance-specific strategy  Ard-Pieter de Man  ASAP European Alliance Summit  ASAP Strategic Alliance Quarterly  governance  John Deere  launching  managing  negotiation  partner selection  Philips Light  planning  structuring  traditional alliance diagnostics  transformation  Vrije Universiteit Amsterdam 

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The Next Wave in Collaboration? Lessons from Platform Ecosystems, Part 2: From Diagnostics to Data Monitoring

Posted By Contributed by Ard-Pieter de Man, CSAP, PhD, Thursday, January 10, 2019
Updated: Wednesday, January 9, 2019

In my Q4 2018 Strategic Alliance Quarterly article about the emerging profession of the ecosystem manager, I mentioned that the most extreme examples of ecosystem management were found around platform organizations like Facebook and Apple. What inspiration can we draw from the way these companies manage their ecosystems? Many existing alliance best practices do not fit well with these characteristics of ecosystems. To deal with them, new best practices are emerging that require us to rethink at least four of the tenets of alliance management. In my first article, I address the shift in the alliance lifecycle from phases to “minimum viable partnerships” or MVPs, as Jan Twombly, CSAP, president of The Rhythm of Business, described in her presentation at November 8-9, 2018 ASAP European Alliance Summit. In the second of three blogs on this topic, I examine how monitoring and partner selection are evolving in ecosystems.

Monitoring: From Diagnostics to Data

The standard way of diagnosing alliances is to send surveys to people involved in the alliance and ask them to rate, on a scale, to what extent various success factors are in place. Measures may relate to goals, trust, governance, operational effectiveness, and the like. By creating spider web diagrams, alliance diagnostics visualize where the strong and weak points of an alliance lie. In 2007, my own research into the effectiveness of different alliance tools showed that companies using such diagnostics are more successful than companies that don’t.

Recent technology developments enable us to monitor and diagnose alliances differently. At the ASAP European Alliance Summit, Laurent Valroff, worldwide global alliance lead at Dassault Systèmes, presented a software system developed in-house that ties into the CRM systems of alliance partners to ensure that both sides work on the basis of common information. At the same Summit I also ran into an executive from WorkSpan, a software maker that actually scales such a system in such a way that all ecosystem partners of a company can easily share and get access to relevant alliance information. (To learn more, see the Member Spotlight on WorkSpan in the Q4 issue of Strategic Alliance Quarterly.) From this it will not be a big step to turn the diagnosis and monitoring of alliances into a real-time system.

By following how often partners log in to the system, where they spend the most time, and where they do not spend time at all, a picture emerges of how these relationship are doing. In the future, adding a few diagnostic questions may give results similar to traditional survey based tools, only faster and at lower cost. Whether such systems will be complements or substitutes for traditional diagnostics will remain to be seen, but it is clear that companies are already building the foundations for a new way of monitoring and diagnosing alliances: online and real-time.

Partnering: From Partner Selection to Partner Seduction

Another interesting feature of many ecosystems is the absence of partner selection. Instead, partners are seduced to join platforms by the promise of access to an interesting market. Standard rules apply that each partner must follow. If a partner does not adhere to the rules, that partner will be barred from the ecosystem. In place of partner selection, ecosystems rely on partner seduction followed by partner curation.

This is especially interesting because partner selection is such a key aspect of traditional alliance management. Traditionally, partner selection requires the study of strategic, cultural, and operational fit between partners, because fit predicts whether it will be possible to establish a strong relationship. Ecosystems turn things upside down: “Let’s start working together and find out whether there is a fit.” Again, this speeds up the process and it enables platform organizations to engage in many more partnerships than the traditional method.

In the third and final blog in this series, Ard-Pieter de Man, CSAP, PhD, examines how, in managing ecosystems, the governance process shifts from committees to principles, and then considers what the rise of ecosystems means for the evolving practice of alliance management. De Man is professor of management studies at the School of Business and Economics of the Vrije Universiteit Amsterdam. A longtime ASAP member, he also is a consultant to companies and not-for-profits.

ASAP Media encourages diversity of thought and opinion as partnering practice and the profession of alliance management continually expand and evolve. To contribute your voice to the conversation, on this or other seminal topics relating to business collaboration, please contact John W. DeWitt, editor and publisher of ASAP Media and Strategic Alliance magazines, at 646-232-6620 or jdewitt@asapmedia.org.

Tags:  alliance  alliance-specific strategy  Ard-Pieter de Man  ASAP European Alliance Summit  ASAP Strategic Alliance Quarterly  governance  John Deere  launching  managing  negotiation  partner selection  Philips Light  planning  structuring  traditional alliance diagnostics  transformation  Vrije Universiteit Amsterdam 

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