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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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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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