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Successful Transitions: ‘How to Optimize Value and Gracefully End Alliance Relationships’

Posted By John W. DeWitt, Tuesday, March 27, 2018

You’ve probably got a process for kicking off an alliance. What about when it’s time to end the alliance relationship? On Tuesday, March 27, at the 2018 ASAP Global Alliance Summit, two veteran partnering executives tackled the topic of “How to Optimize Value and Gracefully End Alliance Relationships.” This session combined the insights and perspectives of Ron McRae, CSAP, director of alliance management at Janssen Biotech, and Steve Twait, CSAP, vice president of alliance and integration management at AstraZeneca.

As it so happens, “AstraZeneca and J&J are working through a transition right now,” Twait noted. “While we didn’t turn it into a case study, we were able to pull in some learnings from that. And while the two of us coming together was serendipity for the conference, we actually have some history and current projects that our companies are working on together.”

Prior to the 2018 Summit, I asked the two of them: Why do you feel that the topic of graceful exits and transitions is important to delve into more deeply? What inspired the two of you to invest your time into sharing your case examples and insights?

“Alliance management professionals typically have toolkits with practices and tactics for kicking off an alliance. There is a lot of excitement and commitment to that phase of the alliance lifecycle. However, the same is not generally true when it is time to end the alliance relationship.  Alliances come and go, but successful management of an alliance transition requires both timely and effective planning as well as flexible problem-solving capabilities at all levels. It also may require a fair amount of persuasion to ensure commitment as colleagues want or need to move on to new responsibilities,” McRae noted.

If it’s over, why does the transition matter so much? “It is important to eliminate or minimize any customer disruption to preserve asset value and even reputations of the partners,” McRae responded. “In the biopharma industry, it can even have life or death consequences depending on the indications of the product and/or availability of other medical options.”

In these cases, “the connection to patients is something we need to think about,” Twait noted. “You’ve got patients relying on the product, as you transition it to the other company, so you need to make sure you keep the patient in mind and don’t interrupt what they need.”

Even when lives don’t hang in the balance, “we should also keep in mind that we want to make sure we manage these situations as effectively as possible, as we may have another ongoing or future alliance opportunity with the partner,” McRae added.

Twait and McRae emphasized that the toolkit for graceful exits is not entirely unfamiliar.

Many of the same governance structures and tools utilized during other phases of the alliance lifecycle can be used during transitions or terminations, but the emphasis of some may change and new ones may still be needed—for example, alliance transition agreements and their components,” McRae explained.

More to the point, because of their relationships and skillsets, alliance executives are the right people at the right time during a transition.

“Alliance management is uniquely positioned in most organizations to maintain that value as the asset shifts hands from one partner to the other, because of existing relationships externally and internally, as well as our persuasive mindset and commitment,” McRae said. “Having led several transitions, we have experienced a number of lessons learned that we are sharing with our alliance management colleagues to help them anticipate and navigate similar situations.”

To be clear, this is not about when “alliances go bad.” It’s about timely, well-managed, intentional transitions.

“Transitions are part of any alliance,” Twait said. “Up front, we say this isn’t talking about when an alliance fails for technical reasons, but more about taking a thoughtful approach to how you transition something that’s been unbelievably successful—you’ve had a longstanding partnership but eventually it made sense for one company to manage the asset. Our focus is more on key learnings when, because of any number of reasons, the time is right for you to transition.”

McRae and Twait provided a number of such examples.

“Some of Ron’s examples involve a very mature alliance transitioning into a different phase,” Twait explained. “Some of the examples I provided are transitions, even divestments, where AstraZeneca is transitioning a product to another company because we are, for whatever reason, focusing our efforts in other areas.” Getting the transition right makes a crucial difference because you’re “leveraging years of relationships if it’s happening after a long relationship,” he continued. “You have people who have invested years in a product, business, and patients.”  

Tags:  alliance executives  alliances  AstraZeneca  governance structures  Janssen Biotech  Ron McRae  Steve Twait  transition 

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Huawei’s Strategy for Partnering Success (Part Two): Focusing on Customer Challenges that ‘Only Innovative Partnering Solutions Can Solve’

Posted By Genevieve Fraser, Tuesday, March 6, 2018
Updated: Saturday, March 3, 2018

This is the second of a two-part blog post based on my recent interview with Greg Fox, CSAP, a longtime ASAP member who is currently vice president of strategic alliances at Huawei Technologies, headquartered in Shenzhen, Guangdong, China. For the past two years, Fox has lead Huawei’s efforts to build information and communications technologies (ICT) industry-leading alliance management competencies and global partnering capabilities.

 

Organizations that Huawei is most apt to forge alliances with are heavily driven and influenced by the needs of their business groups and associated business units, where Huawei products and solutions are incubated, produced, and delivered to the market.

 

According to Fox, during the early phases, he and his team were focused on traditional alliances in the IT space, including independent software vendors (ISVs), systems integrators (SIs), and key technology partners. As the business evolved and expanded beyond this core, it brought in a new era of partnering with non-traditional partners focused on specific industries.

 

“For example, we partner with GE Digital to push the industrial industry towards digitization and automation, with KUKA for smart factories to enable acceptance of the smart production applications in the manufacturing sector, and with the likes of Honeywell to bring to market smart building offerings that take advantage of the latest IoT [Internet of Things] technologies to help make buildings more sustainable, secure and energy efficient,” he said. “In our digital transformation platform effort, we are open to any mutually advantageous partnering arrangement, where we together can combine our capabilities and value to deliver customer success.”

 

Fox explained that some partners are global and cross-industry in nature, while others focus on specific industry business needs, where a relationship may just be tied to that industry. “We are finding that in this age of digital transformation and the desire for increased innovation, productivity, and growth, there are not absolute boundaries that exist. What we do today with a partner in one industry, as the business grows, and we prove things and show success, this may also lead to expanding that partnership to include another industry, and it can scale in breadth and scope, but also in depth.”

 

The most attractive areas of cooperation for Huawei today, and for the foreseeable future, are areas in which customers are experiencing their biggest business challenges that only innovative partnering solutions can solve. One of the central business challenges they face is how to foster innovation and achieve growth, and many are placing digital transformation at the center of their strategies through 2020. Yet, according to Forrester research, only 27% of businesses have a coherent digital transformation strategy in place for creating customer value. This is a major concern, and there is fear of becoming obsolete if this gap is not addressed.

 

Huawei’s goal is to be the digital transformation platform that connects intelligence, data, and devices, and that enables its customers to increase engagement with partners and develop applications that foster innovation. “The beauty of digital transformation is that its customer-centric marketing and business processes require the ability to work across business verticals and silos, which requires partners and ecosystems to achieve,” Fox said.

 

To learn more about Huawei’s partnering efforts, read part one of this blog as well as Genevieve Fraser’s Member Spotlight in the Q4 2017 issue of Strategic Alliance Magazine. Greg Fox also co-presented, with Andrew Yeomans, CSAP, of Merck Serono, the January 18, 2018 ASAP Netcast webinar “Building the Engines of Collaboration Inside and Beyond the Borders of Mainland China.”

Tags:  alliance management  cloud  digital transformation  GE Digital  global partnering capabilities  governance structures  Greg Fox  Honeywell  Huawei Technologies  ICT  independent software vendors (ISVs)  manage alliance relationship  partnerships  strategic alliances  systems integrators (SIs)  technology partners 

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Huawei’s Strategy for Partnering Success (Part One): Tapping into the ASAP Community’s Best Practices, Professional Development, and Tools

Posted By Genevieve Fraser, Monday, March 5, 2018
Updated: Saturday, March 3, 2018

Decades before Greg Fox, CSAP, assumed his current position as vice president of strategic alliances at Huawei Technologies, headquartered in Shenzhen, Guangdong, China, he held senior strategy, channels, sales, alliance management, marketing, product management, and business development positions at Citrix, Cisco, Novell, and HPE. For the past two years, Fox has lead Huawei’s efforts to build information and communications technologies (ICT) industry-leading alliance management competencies and global partnering capabilities. Today, Huawei Technologies is the largest telecommunications equipment manufacturer in the world.

 

“Having a strategic alliance background has provided a competitive edge with prospective partners. In fact, strategic alliances are quickly becoming a core part of the Huawei culture and an embedded part of our business strategy,” Fox stated.

 

“And with Huawei’s global market leadership in key markets involving carrier, consumer, enterprise and now cloud, many companies want to do business with us for mutual business advantage. It is a nice problem to have, but that makes it ever more important that we do partnerships the right way, and we set them up for the long-term,” he explained.

 

Given the magnitude and scope of their current level of partnerships, Huawei has developed a tier-one companywide process called Manage Alliance Relationship (MAR) that focuses exclusively on managing the alliance relationship process. This includes traditional 1:1 alliances, as well as managing one to many and many to many partnerships.

 

As Huawei has adopted many of ASAP’s best practices and tools for partner evaluation, recruitment, and on-boarding, the alliance management organization has created many templates within the MAR process. These templates and tools are actively used in every current or prospective strategic partnership and have afforded Huawei a competitive edge in cultivating its growing portfolio of partnerships.

 

“We have a straightforward approach outlined by a five-step process to executing mutually profitable partnerships and as we follow this, we feel that we can improve the odds of success and ensure that all parties profit,” Fox said.

 

“The first step involves partners agreeing on a common set of objectives and a strategy for achieving them and being clear on what all sides get from the alliance. Next, partners must write out a business plan, including determining who is our customer, why will they buy from us, and what is our expected ROI [return on investment]. Third, partners must install governance structures that assign key responsibilities, clarifying who is responsible for what, and which has an identified sponsor who is senior enough to mobilize resources and change course if things go off track,” he said.

 

“Step four involves creating proper incentives for both the direct sales force and indirect channel, with compensation designed to get all parties to make the alliance a priority. And finally, every partnership should be flexible, and alliances must be reviewed quarterly to help leaders respond to changing business conditions,” Fox explained.

 

The five steps are not performed once and then set aside. Instead they are done in an iterative loop, where processes are refined, and targets regularly adjusted as needed, based on every changing competitive environment.

 

To learn more about Huawei’s partnering efforts, see Part Two of this blog as well as Genevieve Fraser’s Member Spotlight in the Q4 2017 issue of Strategic Alliance Magazine. Greg Fox also co-presented, with Andrew Yeomans, CSAP, of Merck Serono, the January 18, 2018 ASAP Netcast webinar “Building the Engines of Collaboration Inside and Beyond the Borders of Mainland China.”

Tags:  alliance management  business development  channels  Cisco  Citrix  cloud  governance structures  Greg Fox  HPE  Huawei Technologies  manage alliance relationship  marketing  Novell  partnerships  product management  sales  strategic alliances  strategy 

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