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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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ASAP Summit Spotlight Leadership Forum Highlights Exceptional Contributions: Part 2—Building Better Company Culture Through Collaboration

Posted By Cynthia B. Hanson, Wednesday, August 16, 2017
Updated: Tuesday, August 15, 2017

The following is a continuation from Part 1 of the Spotlight Leadership Forum Q&A Panel session, which took place last March at the 2017 ASAP Global Alliance Summit “Profit, Innovation, and Value for the Part­nering Enterprise,” held at the San Diego Marriott Mission Valley, San Diego, California. Highlighted on the podium for their exceptional company contributions were Celine Schillinger of Sanofi Pasteur; Chris Haskell of Bayer; Maria Olson of NetApp; and Kevin Hickey of BeyondTrust. The session was moderated by John W. DeWitt, CEO of JW DeWitt Business Communications and publisher and editor of ASAP Media and Strategic Alliance Magazine, who plied the panel in this with questions on how to build better company culture and frameworks through partnering.

Kevin, when did that [collaboration] light bulb go off for you, or did you always get it? And as an chief executive, how do you drive your company to be more collaborative and successful in partnering?

Kevin: BeyondTrust is made up of nine different businesses. When we came in [to manage the newly combined companies], they had their own system. Our objective was to build the culture on the values we have, and determine what the benefits of the values are and the outcomes. … We tried to get everyone singing out of the same hymnals. We needed structural change, but it really was about culture, and it worked its way down. When we went forward, it was not just a “rah-rah” kick off. It’s was all about communications and driving it throughout the organization.

Maria: The executive team sets the culture of the organization. When I started at HP, it was very collaborative and had a consensus orientation. When I fast forward to some other companies I’ve been to, and it was command and control. The top-level team does set the tone. “Selective collaborations” is what I call it.

You also talked a lot about sales, Kevin. In highly competitive sales environments, there are big challenges. How do you change thought there?

Kevin: You need open communications and clear expectations with everyone in the organization. I don’t care what position you are in the company, if you don’t know how your job affects the company, it needs to start there. You have to be very collaborative, but at some point in time you have to say, “The train is leaving.” Smart people want to get to a decision and move on. Smart people say, if we make a mistake, we will own up to it, adjust, and move forward.

Celine: It’s the paradoxical junction between collaboration and performance via the carrot and stick. We put people in boxes, and it’s crazy. At the same time, research shows people are motived by autonomy, mastery, and purpose. So how do we try to evolve our company’s performance management system? Because of this desire for control, it infiltrates every function other than HR. If we can’t change that, how can we inspire people? How can we cope with the way organizations manage people and also focus attention on something elsethe excitement, the journey, etcetera. It’s not black and white, it’s complicated.

What are some of the strategies you deal with in terms of the need for speed, the need to have deliberation, to not be reactive. How can you balance that today?

Kevin: Sometimes you have to go slower to go faster. You want process. I do find that as a company, you’ll see the people who are doing the rework all the time. To me, you have to guide people to slow down and think about what they are trying to accomplish. All the mistakes I made when I went into partnering in the channel alliance business, it was a quick fix. It really takes thoughtful collaborating up front with people who have done it to get 85 percent of a plan agreed to. It will save you a ton of time on the back end.

For Part 1 in this series, please go here: http://www.strategic-alliances.org/blogpost/1143942/282809/ASAP-Summit-Spotlight-Leadership-Forum-Highlights-Exceptional-Contributions-Part-1-Inspiring-a-Movement-for-Change-Within-Your-Company . ASAP Media’s coverage of the Spotlight Leadership Forum Q&A continues in Part 3.

Tags:  BeyondTrust  Celine Schillinger  collaborations  collaborative  communications  Kevin Hickey  Maria Olson  NetApp  Sanofi Pasteur  strategies 

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Tinker, Tailor, Soldier, Sailor—Effectively Employing the Breadth of People in Your Alliance

Posted By Cynthia B. Hanson, Wednesday, September 7, 2016
Updated: Tuesday, September 6, 2016

To maximize the value of an alliance, it’s important to effectively employ and appreciate the full mix of participantsfrom your sidekick partner to the trainer and sponsor in the background.  That was the focus of the session “People, Process, Culture: Building a Winning Alliance Program” at the 2016 ASAP Global Alliance Summit, “Partnering Everywhere: Expert Leadership for the Eco­system,” at the Gaylord National Resort & Convention Center, National Harbor, Maryland. The discussion was led by three individuals who built highly successful collaborative programs from scratch: Joe Havrilla, senior vice president and global head of business development & licensing, Bayer Pharmaceuticals; Gerry Dehkes, CSAP, global cyber ecosystem lead at Booz Allen Hamilton; David Erienborn, CSAP, director of strategic alliances at KPMG. During the session, they spent a considerable amount of time plying the question of how to create a thriving dynamic between your alliance team, partners, and even ex-partners. 

Joe: At the end of the day, the strategy is about people. Microsoft and KPMG are not going to do anything, since they do not exist other than in our heads they are not going to do anything. You only have the beginning of a strategy until you have taken your strategy from the company down to the people. People come into work not to execute a strategy; they come in with their own strategy. So how do I align their strategy to our best interests? In some cases, you also may need to work with the ex-partner.  If you understand ahead of time where you are in conflict with the other company, you can design a way of working together. 

Gerald: Here’s the approach we took, which is the secret sauce of this particular alliance program. Typically an alliance director will talk with partners and service leaders, and then bring in sales people. We realized the benefit of 10-20 alliance managerswith each trying to get to that sales forceand decided to take that part of the organization and organize it around the industry groups. Really position the alliance enablement person, and they would have only one person to go to. We found that to be very effective, those folks became part of the team. They decided strategies, winning alliance-based offers, they would always be there for that industry. That model helped us become successful. It’s that last piece that’s criticalgetting those alliances out to sales-facing people. 

David: It’s important that training people understand what they are trying to accomplish. If you can translate alliances at a company level down into the mind of the educators, and that this whole alliance is to get them to do something, they become aware of the importance of training to do something. It’s important for them to know this is the strategy. How do you set this up so they get visibility and appreciation? You need to make the training people a winner. 

Joe: You need to know the difference between sales and revenue, understand what margin is, and understand that finance people will be called on for estimates. If I include them from the beginning, I am a lot more likely to get their support when I need it. Another group that is important to your alliance are the sponsors. I’m an advocate and agent, but not the sponsor. They can bring resources to bear and spend time on building relationships. The alliance should be one of their top four priorities for their year. They have to be someone who can really step up. There aren’t any sponsor schools, they’ve never been trained to do it. We need to help sponsors understand what their job is, invest time in it, determine who can be a sponsor, and make sure they have the training to do it. 

Gerald: You need to define the elements of value that all the partners are looking for. It’s not a specific part of the agreement or financial transaction, yet it’s a strongly held expectation of the partner. If you don’t clarify that up front, you wind up being surprised. If there was an expectation that was discussed earlier, but you never codified the agreement or the people responsible for executing the agreement, then you have disconnect and conflict. It’s important that somebody is capturing the expectations. The other tool that is helpful upfront is to do a partner fit as part of due diligence. When you start with a rigorous checklist approach on partner resources, decision process, internal policies and procedures, you can mitigate conflicts down the road. 

David: Trust is predictability. I don’t trust my 15 year old to drive a car because I can’t predict. So we do a lot of trust building. As you get more of your people out there dealing with partners, you have to educate them and give them the boundary conditions, not to restrain them, but you want a consistent approach. You want enough leeway to solve problems. You don’t want to inhibit them from creativity, but you want predictability. 

Tags:  agreement  alignment  alliance team  Bayer Pharmaceuticals  CSAP  David Erienborn  Gerry Dehkes  Joe Havrilla  KPMG  sales  sponsors  strategies  strategy  Trust 

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