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The Next Wave in Collaboration? Lessons from Platform Ecosystems, Part 1: From Alliance Lifecycle Phases to ‘Minimum Viable Partnerships’

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

In my recent 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. These platform-based ecosystems provide a glimpse into the future of alliance management. In fact, the future may already be here—and not just in information technology. At the November 8-9, 2018 ASAP European Alliance Summit, I heard about some fascinating examples of pharma companies that build platforms, use artificial intelligence, and connect an increasing variety of ecosystem partners. Other cases are easy to find: John Deere, not exactly a Silicon Valley start-up, and Signify (previously Philips Lighting) are examples of long-established companies that discovered that the mix of platforms and ecosystems holds great promise. What inspiration can we draw from the way these companies manage their ecosystems?

To answer that question, I focus on three characteristics of platform ecosystems.

  • First, the high speed of developments around platforms. As a consequence of that speed, partnerships need to be set up rapidly and must be easy to dissolve.
  • Second, increased unpredictability of new developments, because of the high diversity of technologies and business models that are introduced into the market.
  • Third, an increase in the number of partners, including many partnerships that are not traditional alliances.

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 some of the classic tenets of alliance management. I will discuss four of them.

The Alliance Lifecycle: From Phases to “Minimum Viable Partnerships”

The alliance lifecycle has been one of the foundations of alliance management for more than twenty years. The lifecycle divides the process of alliance management into distinct steps:

  • setting the alliance-specific strategy
  • partner selection
  • negotiation
  • planning
  • structuring and governance
  • launching and managing
  • transformation

This structured process has proved to be very effective. It gives managers an alliance-building framework that ensures relevant issues are dealt with in the right order.

It has one huge drawback, though, in an ecosystem world: it is slow. It may take over a year before all the steps are covered. A second problem is that following all these steps in a strict order makes it difficult to adjust an alliance to changing circumstances. The alliance lifecycle assumes an alliance can be relatively stable for a longer time period and requires episodic instead of continuous change. In an ecosystem world, however, alliances may be in a continuous state of transformation.

Instead of using the alliance lifecycle, alliances may be seen as start-ups that evolve continuously and rapidly. Hence proposals begin to emerge to use the lean start-up methodology for alliances. At the 2018 ASAP European Alliance Summit, Jan Twombly, CSAP, president of The Rhythm of Business, showed how to adapt the firm’s “rhythm of business” methodology—in essence, how to use lean start-up methods—to create “minimum viable partnerships” that do not go at length through all the elements of the alliance lifecycle. This allows for fast partnering and continuous adaptation, and provides an alternative for the alliance lifecycle.

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. Part Two of this three-part blog series discusses how traditional alliance diagnostics make way for real-time monitoring of partner (or ecosystem) health.

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 Rugged Biopharma/Tech Topography—What Alliance Managers Need to Know (Part 2)

Posted By Cynthia B. Hanson, Wednesday, October 24, 2018
Updated: Tuesday, October 23, 2018

This extremely well-organized session, “Non-traditional Partnerships:  The Changing BioPharma Alliance Landscape and the Implications for the Alliance Professional and Alliance Management Community” held by Stu Kliman and Ben Siddall of Cambridge-based Vantage Partners, started off by outlining the multiple challenges the biopharma industry faces today, many of which are financial. One major solution to those challenges lies in building more relationships across the lifecycle, specifically with tech, the pair pointed out. They described the complex ecosystem of partnerships that are emerging today and how to determine if it’s right for your company to jump into the trend and/or continue to engage in multi-partner collaborations. Also on the docket was a discussion on effective partnering, which requires the capability to make good choices and the ability to execute.

All major biopharma companies are following the route of building a greater partnering base, they explained. Some of the deals are very large—in the hundreds of millions. Some involve very big players that are exploring and investing in the digital health tech space, such as Apple and IBM. Some are much smaller, or combine large and small companies. No matter the size of the companies involved, when entering the field, “You need to be purposeful and execute quickly,” explained Siddall.

And you need to consider “What makes relationships work—what are the leverage points?” added Kliman.  “As we think about this new landscape of partnering, we are already seeing our clients making mistakes.”

One of the really important areas where companies are struggling in this ecosystem is the process of thinking through whether they should be partnering at all. “Should we just have a vendor relationship? What does partnership mean? Through what process are we making that decision? Where does partnering make sense?” said Kliman, ticking off the kinds of questions that naturally emerge.

“To achieve maximum value, biopharmas must select the right partners to address specific needs and manage these relationships in a way that acknowledges these differences,” Kliman emphasizes. It’s very important in the process to consider the differences between pharma and tech, he said, while flashing a slide.

The pharma cycle has:

  • High levels of regulation
  • Very long (five-plus years) “product” development
  • Management and investors familiar with longer development
  • Purposeful and predictable innovation and co-creation
  • Strong functional stakeholders (medical, legal, compliance, finance)
  • Contractual, asset-based alliances with fixed lengths
  • Well-defined commercial negotiation models with “customers” with significant regulation

The tech cycle has:

  • Variability—many markets are not regulated
  • Short to moderate (1-3 years) “product” development
  • Management/investors who tend to expect quick ROI and steady growth
  • Rapid and agile innovation and co-creation
  • Moderate or weak functional stakeholders (legal, compliance, finance)
  • A blend of formal/informal alliances, often with no fixed length
  • Flexible, market-driven customer engagement processes

Also of great importance is the process of thinking through the best possible partner choices and evaluating them according to the meta-criteria of capabilities. Both presenters recommend considering the marketplace and size of the deals and evaluating potential partners from multiple dimensions that go beyond just the financial impact. Vantage recommends doing this with a four-quadrant methodology that analyzes strategic, financial, operational, and relational fits.

“On the back end, we have challenges during execution to consider,” Kliman added. “Pharma and IT are significantly different. If your core expertise is to identify and manage alliance models that manage different partners, that needs to be brought into upstream activities as well.”

“If you are going to enter into this new world, you want to make sure the relationship is purposeful,” Kliman added. A purposeful relationship contains the following criteria, he said. It should be:

  • Purposeful (focused on a well-defined market; meets patient, partner, and company needs)
  • Choiceful (partnership is worth the effort; has the right answer, among other things)
  •  Designed and developed collaboratively (based on a shared vision; focused on joint gain, among other things)
  • Actively managed (with joint oversight; systems reviews; robust metrics)
  • Building over time
  • Assessed

See part one of this session coverage blog and stay tuned for more ASAP Media team coverage from the 2018 ASAP BioPharma Conference. 

Tags:  alliance  Ben Siddall  healthcare landscape  licensing-type alliance groups  partnering  pharma  Stu Kliman  tech  Vantage Partners 

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Rethinking Trust, Reshaping Industries: The Alliance Implications of Blockchain Technology as Seen Through the Eyes of IBM and ChromaWay

Posted By Cynthia B. Hanson , Tuesday, October 16, 2018

IBM’s blockchain ledger solution has been gaining ground over the past year through extensive partnering. Much like a team sport, “the only way blockchain works is by participants in an ecosystem working together,” says Janine Grasso, vice president, blockchain strategy and ecosystem development, IBM Industry Platforms. Grasso was interviewed early in the year about blockchain technology for the Q1 2018 Strategic Alliance Magazine in the article “’An Exponential Adoption Curve’: The Changing Face of Data Security in Partnering”. When the article was first published, IBM had 40 to 50 active blockchain networks. That number has increased to 75 live networks solving industry-wide blockchain problems. Grasso will be discussing the implications of blockchain technology with co-speaker Todd Miller, CA-AM, vice president, US business development, ChromaWay, in the session “Rethinking Trust on the Blockchain: Partnering and Alliance Implications” at the 2018 ASAP Tech Partner Forum, “Reimaging Part­nering in a Disruptive World,” on October 17, at the Four Points by Sheraton, San Jose Airport, San Jose, California. In a recent interview, I asked Grasso about the core of the upcoming session.

ASAP Media: You are presenting with Todd Miller. What do the two of you plan to focus on?

Janine Grasso: We come from two very different perspectives. But we agree on how much blockchain will change all industriesand not just the ones most talked about, such as finance and supply chain. We’re both asking: “What role can we play to help partners do that?” We’re both trying to equip alliance managers and partners. This session is not just about reselling technology. It’s about applying tech across all industries; bringing together players that traditionally compete. We will go through our different backgrounds and points of view. We’ll discuss the problems around this new era and the world as it is today with blockchainthe same old problems that are slowing [the progress of] blockchain down, such as lack of trust, data disruption, and business disruption. And competitorsone start-up, like Über, can completely change the game in an industry.

Being able to leverage this new tech to reshape your industry is the punch line. We’ll go into what blockchain does and the capabilities of blockchain. We will round off the conversation with real-life examples and a discussion on how, exactly, companies across many different industries are applying the technology. How they also are breaking down the barriers that have existed for hundreds of years. And we’ll discuss music and royalty rights, talk about identity, food safety and the IBM Food Trust solution, and then go into the role of the alliance manager and how they can facilitate blockchain options.

So there are strong alliance implications with blockchain?

The true design of blockchain is the industry players or ecosystem coming together and bringing it to life. Blockchain is not singular. The only way it works is with participants in an ecosystem working together, so it’s very much a team sport.

The session description states you will cover technologies that “facilitate decentralized data sharing and secure transactions [that] will accelerate new business models beyond even Über, Spotify, and Airbnb.” Can your provide an example of a new business model?

Blockchain ingrains the trust in every transaction along its journey. In the case of a farmer and a distributor, it becomes transparent exactly where the food item came from: the genesis, authenticity of that product, and exposure to any contamination. The data explosion will continue and remain because of your digital ecosystem, and everything has that digital footprint now. You can encrypt information by attaching it in a blockchain. You only have to take elements that are necessary. That alleviates concerns around datait gives the security and data protection required and only uses crucial data in the blockchain. One example of a new business model is with Everledger, which uses blockchain in the diamond industry. There is traditionally a lack of trust and authenticity about where diamonds come from. Blockchain can now provide that information and verify its authenticity.

What is the No. 1 question you expect to hear in the Q&A session?

How do I get started? How can IBM help small and large companies convene a network because of its large ecosystem and client base? How do I participate? I suspect we will hear a lot of question about alliance management.  

Stay tuned for more of the ASAP Media team’s coverage of the 2018 ASAP Tech Partner Forum on the ASAP Blog at www.strategic-alliances.org. Learn more and register for the 2018 ASAP Tech Partner Forum at http://asaptechforum.org

Tags:  Alliance  alliance management  Blockchain  ChromaWay  data protection  Data Security  ecosystem  encrypt information  IBM  Janine Grasso  Partnering  Todd Miller 

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The Rugged Biopharma/Tech Topography: What Alliance Managers Need to Know (Part 1)

Posted By Cynthia B. Hanson, Wednesday, September 26, 2018

Business partnering today requires know-how to negotiate nontraditional collaborations for purposes that are different from those of classical business development and licensing (BD&L) alliances. The partnering landscape for biopharma firms is evolving to include a variety of these new kinds of collaborations, according to the session “Non-traditional Partnerships:  The Changing BioPharma Alliance Landscape and the Implications for the Alliance Professional and Alliance Management Community,” led by Stuart Kliman, CA-AM, and Ben Siddall, both of whom are partners at Cambridge, Massachusetts-based Vantage Partners. The two took to the floor at the 2018 ASAP BioPharma Conference to provide key insights on the value and challenges these partnerships bring, especially in the area of biopharma/tech collaborations, which are resulting in very different business models. I had the opportunity to talk with Stu Kliman before the session. Here are some of the insights he provided on this hot topic.

ASAP Media: What is the impetus for your session?

Stuart Kliman: This session is about this ongoing theme of new types of collaborations happening in the healthcare ecosystem. It’s really all about how biopharma and tech are doing more and more together—so new and different kinds of relationships. Those relationships have different purposes. They might differentiate the value proposition of a product or a drug or support outcomes-based deals within the healthcare system. Or they might provide real world evidence and value-based pricing models. This session is about some of the differences between pharma and tech and the different kinds of challenges that organizations need to deal with. About the upstream, how do you start to think about creating these kinds of relationships and the key success factors for doing so? This also raises the question about if and how classic business development and licensing-type alliance groups need to evolve to deal with the changed environment.

We can see from the lineup at this year’s ASAP BioPharma Conference that the biopharma/tech partnering relationship is a very hot topic. How pervasive is the interest on the tech side?

Every tech company that’s out there is trying to figure out how to get into healthcare. It’s this world of FitBit. It’s this whole world of software, hardware, and device companies exploring the healthcare world.

This session is an extension of some of the topics you’ve been discussing and advising on for some time.  What’s different in this session?

There is a lot of focus on understanding the healthcare landscape, defining the problems that the healthcare landscape is creating.  For example, there might be things related to better data, trial efficiency, or the context of a specific therapy, or the need to track value. The first thing you need to do is make sure you have thought through what the different problems are, what capabilities you need to partner with, consider different kinds of players that are out there, and be thinking about the right kind of business model to work with them, and how to design overall relationship around that shared vision.  We will spend more time talking about this notion of problem definition and think through tentative problem types. Does that lead to something that feels like an innovative alliance relationship or a more traditional one?

Stay tuned for more of the ASAP Media team’s coverage of this and other sessions at the 2018 ASAP BioPharma Conference. 

Tags:  alliance  Ben Siddall  healthcare landscape  licensing-type alliance groups  partnering  pharma  Stu Kliman  tech  Vantage Partners 

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How Merck and Pfizer Build Alignment and Navigate Complexity: A Transformative Alliance on a Journey of Oncological Discovery

Posted By Genevieve Fraser, Friday, September 21, 2018
Updated: Monday, September 17, 2018

There were some cultural differences to overcome when in 2014 pharmaceutical company Pfizer joined forces with biopharma company Merck, selling its sharing rights to develop an experimental immunotherapy drug to accelerate progress against some of the most difficult-to-treat cancers. The alliance paired an American behemoth, Pfizer, founded in 1849 in Brooklyn, New York, with Merck, a German-based multinational corporation, founded in 1668 (no typo).

 

 To drive alignment in their complex partnership, Pfizer and Merck utilize a “divide-and-conquer” approach, as explained by two of the companies’ alliance leaders during a session at the March 2018 ASAP Global Alliance Summit in Fort Lauderdale, Florida, USA. Discussing their experiences “Navigating and Effectively Managing Complex Alliances between Large Biotech/Pharma Organizations,” Judy Baselice, Pfizer’s director alliance management, and Brian N. Stewart, CA-AM, director alliance management at Merck KGaA, Darmstadt, Germany, described how the Merck-Pfizer partnership uses five main tools for keeping the alliance on the same page.

  • Divide and conquer – Six alliance managers with divide and conquer responsibilities with different alliance committees, working groups, and other activities.
  • Distribute monthly dashboards – Capture everything from development and commercial activities to changes in manufacturing, medical affairs, and a snapshot of competitors; distributed to everyone from senior leadership to project management, so everyone knows what’s going on.
  • Invest in coordination and jointly chair meetings – What are the issues and activities and what’s coming up next? Discuss what was agreed to coming out of the gate.
  • Use available technologies – Exchange information from a review of clinical development to the use of federated calendars (meaning you type in a name and availability shows up).
  • Refer to guidance included in the contract – these are your guidelines for final decisions.

The matrix of what the alliance looks like includes co-administrated studies, co-promotion and co-commercialization agreements, a dedicated alliance management team, reports and global marketing with the alliance general manager, as well as target goals for external partnering. Management tools include a SharePoint site, calendars with a pull-out archive section, and regional groups, all of which added to the complexity of the alliance. Of course, what they needed when they launched was to recruit patients, to get the study readouts, and to receive notifications when there were significant changes.

 

External alliances that were outside of the core alliance involved collaboration agreements. Each involved incremental complexity—three- to four-way agreements, extended research and collaboration agreements within the compound, as well as assets that the teams did due diligence on. There were also alliance and third-party signed agreements to move forward, along with standalone agreements not part of other overall agreements.

 

“These separate agreements add additional layers of complexity with each deal we do,” Baselice stated. “Not every one of these partnerships will look alike. We also declined opportunities and had to determine which molecules were not ready based on a need for additional data.”

 

“We co-funded funded fifty percent of each trial as well as each organization’s legal team review of IP clauses. It can take six to 12 months per project,” Stewart added. “Also, we needed to educate both companies on what to do and what’s at risk which involved the future of our alliance in some respects. Effectively managing the alliance matrix is a matter of life or death for some.”

 

“The important thing is to keep everyone updated,” Baselice said. “It was important to be consistent and to avoid confusion. We needed teams to feel there was no need to horde data. We stressed openness and transparency. We have nothing to hide and the goal is to move it forward, share info and foster the attitude that everyone is there for the project. Of course, there are some things Pfizer can do that Merck can’t and vice versa. For example, Merck can go into countries Pfizer can’t, like Iran.”

 

Read more about the Merck-Pfizer partnership and insights into how the two companies’ partnering leaders manage their complex alliance in the August 2018 issue of eSAM Plus.  

Tags:  agreements  alliance  Brian N. Stewart  co-commercialization agreements  collaboration agreements  Complex Alliances  dashboards  due dillegence  External alliances  Judy Baselice  Large Biotech/Pharma Organizations  Merck KGaA  Pfizer  third-party signed agreements 

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