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Revamped Bayer Alliance Practice Relieves Partnering Headaches

Posted By Jon Lavietes, Saturday, August 29, 2020

Five years ago, Bayer’s R&D alliance management group knew it needed changes. Even though its core partners were happy in their collaborations with the 150-year-old pharmaceutical and over-the-counter medicine institution, the external perception in the broader pharma community landed in the lower tier, according to its internal research.

The R&D group embarked on changes to its alliance practice in order to improve its function and achieve three larger organizational objectives: 1) deepen the company’s understanding of the mechanisms of diseases that were getting increasingly complex; 2) broaden its drug portfolio into new modalities, technology, and external innovation; and 3) make its operating model more flexible, in general.

Bayer was contending with a variety of changes in its operating environment. First, the number of alliances—and the number of people from outside the organization working on Bayer initiatives—was growing fast. Moreover, the company was engaging in new types of collaborations, such as digital health partnerships, in which it found itself in the unfamiliar position of being the inexperienced party. Partners increasingly had their own alliance networks playing roles in Bayer collaborations, which added a new layer of complexity to the management of these collaborations.

Two Bayer executives shared the story of the company’s still-in-progress alliance management makeover in an on-demand 2020 ASAP Global Alliance Summit session, “Enabling Strategic Change—Cultural and Alliance Capability Development,” which took viewers through the internal and external changes that were made in order to modernize its alliance practice and improve its standing within the broader pharma partner community.

Bayer’s New Training Regimen Comes Up ACEs

The first step in upgrading Bayer’s organizational alliance capability was to overhaul alliance manager training. More specifically, the practice instituted highly tailored individual plans; executives were coming to alliance management from a variety of areas (e.g., marketing, R&D, business development, etc.) and each had different strengths, weaknesses, and bodies of knowledge.

Bayer complemented this individualized training with its Alliance Community Excellence (ACE) initiative, which brought in outside experts, sometimes from unusual places, to hold court on facets of alliance management. Michael Kennedy, PhD, director of strategic alliances in Bayer’s Business Development & Licensing group, spoke of one instance where a former FBI trainer taught alliance managers how to identify and neutralize lying and deceit. The ACE program also placed an intense focus on external networking, including deepening the alliance group’s interaction with the ASAP community. As part of the ACE program, the alliance management practice also set up a help line so that nobody in the organization felt like they were on an island. 

“Who are you going to call? It’s not Ghostbusters. It needs to be somebody within our broad alliance community that people can call, either as an alliance manager running into some challenging topics and wanting to discuss it or somebody on an alliance team. They can pick up the phone and call one of us alliance managers for help,” said Kennedy. 

Complementary Principles, Competencies Go Hand in Hand

Bayer structured its training into six core competency categories: 1) alliance know-how, 2) collaboration, 3) joint problem solving, 4) organizational agility, 5) flexibility, and 6) conflict management, and developed curriculum for executives of different levels (e.g., rank-and-file team members vs. alliance leaders). Each of these areas consisted of three to five individual skills. Kennedy explained that the organization sees synergy between these areas and that they can be broken down into three complementary pairs—organizational agility helps optimize alliance know-how, flexibility aids collaboration, and conflict management is an inevitable part of joint problem solving.

Kennedy walked the virtual audience through a set of foundational principles grouped into two broad categories—1) “Establish,” which dealt with structure and process, and 2) “Practice,” guidance around mindset and culture—that similarly went hand in hand with each other. Each alliance needs resources—namely, the right people, capacity, and investment—but they are useless if partners don’t have access to Bayer leaders. (Resources represent an “Establish” principle, while access comes from the “Practice” category.) Governance, another “Establish” principle, is nothing without alignment, which Kennedy defined in this context as “speaking with one voice.” Communication, both in terms of timing and consistency, to partners and the public at large is paramount, but problem-solving capabilities will eventually be necessary when it breaks down. For years, Bayer struggled to acknowledge partners’ differences, but in recent years the company has strived to safeguard the value joint initiatives are expected to bring to allies. Carry out all of these principles, and Bayer partnerships will generate execution and trust.

“[Execution and trust] really are the foundational pieces of our partnering principles,” said Kennedy.

A New Alliance Culture: Play to Win vs. Playing It Safe

Of course, principles and competencies only go so far if a corporate culture isn’t designed to optimize them. Bayer had a lot of work to do in this area, according to Christoph Huwe, CSAP, PhD, director of strategic alliance development for R&D Open Innovation & Digital Technologies at Bayer. First, the company had to stop operating in silos. To that end, it adopted the mantra “assets over function,” recounted Huwe in describing the new collaborative mindset that encouraged employees engaged in alliances to prioritize activities that were necessary to advance a drug candidate to a clinic or patient. Bayer relaxed its traditionally “top-down” command-and-control model, so that its employees had the freedom to execute accordingly without having to run every decision up the ladder within the company.

Bayer similarly loosened its risk-averse ways to enable the alliance practice to “play to win and learn over playing it safe”—according to Huwe, the organization was previously less inclined to make mistakes. From a strategic standpoint, Bayer’s mentality switched to one of “science over process.” That is, instead of trying to force a drug to work for a preplanned indication, it would follow the science and pursue another indication if initial research showed the asset was better suited for it.  

Cards on the Table: Alliance Game Players Learn Practice’s Four Pillars

Of course, culture starts at the top, so the alliance practice puts its senior leaders through rigorous team and individual training to lead by example and accept what Huwe characterized as “very candid feedback about inconsistencies” in what they preach and what they do vis-à-vis partner initiatives. Midlevel management retraining was also critical, according to Huwe, since the majority of people working on alliance engagements reported to executives at this level.

Since senior executives usually developed the company’s alliance strategy in advance, it was up to the alliance practice to rebrand itself and communicate the new vision to the rest of the organization through “game-ified” cross-functional team-based exercises. For example, the alliance practice created a board game that was divided into the four pillars of Bayer’s internal culture—collaboration, experimentation, customer focus, and trust. About a dozen players would break into smaller groups where they would be asked to discuss whether actions detailed on playing cards were “blockers or drivers” of these four cultural mainstays. The smaller groups would ultimately reconvene to share and discuss their findings in one large discussion.

Huwe said the alliance management team also instituted new “health-check–style surveys,” which measured “awareness, agreement, involvement, and impact,” to make sure the new culture was taking root. Huwe placed a special emphasis on the “agreement” piece.

“You have to have an understanding if the organization is really on board because if they aren’t you have to think of ways to get them there,” he said. “Senior leadership will be much ahead of the rest of the organization in their agreement to the process, so they need to understand that we’re not quite there yet, and they have to continue to work with the rest of the organization to get there.”

Out of Its Comfort Zone and into Global Pharma Networks

Bayer also embarked on several new measures to improve its reputation as a partner externally.

“We’re trying to leverage the partner’s strengths and capabilities and not trying to turn them into more like Bayer. This is causing us to get out of our comfort zone and expand the way that we think and the way that we work with partners,” said Kennedy.

Case in point, Bayer previously had a company policy limiting press releases to deal signings and phase 3 or later. However, the company has recently relaxed that internal standard to accommodate partners that were eager to issue announcements detailing successes in earlier stages of the drug development cycle. In addition, the normally process-driven company has taken steps to become more flexible. For example, it cut the number of steps in its governance process to approve a deal by more than half.

Bayer has in some cases chosen to collocate employees at partner sites, and it has also opened up business and innovation centers in regions around the world considered hotbeds of pharmaceutical activity, such as San Francisco, Boston, Osaka, Beijing, Singapore, and Berlin.

“We’re going to where the networks are already existing and not asking people to come to Bayer [headquarters],” said Kennedy, who added that the company can now take partners to these sites to give them an up-close look at Bayer’s affairs.

The company has established effective online platforms, hosted more partnering events, and increased its conference presence, even bringing actor Michael J. Fox to one show to speak about the company’s efforts around Parkinson’s disease. Today, half of the company’s top 10 products come from partner initiatives, accounting for more than half of Bayer’s revenues.

The opening slide of Kennedy’s roadshow presentation now says it all: “Bayer is a partnering company.”

Huwe and Kennedy had more to share about Bayer’s partnering transformation, so make sure to use your Summit registration information to catch the full presentation in the Summit portal. While you’re there, peruse more than 20 other insightful sessions from the first-ever virtual ASAP Global Alliance Summit.

Tags:  alliances  Bayer  Christoph Huwe  collaborations  Digital Technologies  Global Pharma Networks  Michael J. Fox  Michael Kennedy  Open Innovation  partnering  partners  strategic  transformation 

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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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Vanguard Ecosystem Leadership: The Highly Successful Evolution of Salesforce’s Partnering Practices

Posted By Cynthia B. Hanson, Wednesday, October 17, 2018

Salesforce’s vanguard leadership has been exemplary when building strong partnering ecosystems. As a rainmaker in the API economy, the company designed the largest technology ecosystem and most active cloud marketplace. Leslie Tom, senior vice president of AppExchange marketing and programs, has played a significant role in that transformation. In her session “API Economy: Salesforce AppExchange Partner Ecosystem” 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, she plans to share strategy and insight on how to build and benefit from a strong partnering ecosystem, and the invaluable role alliance managers play in fostering a healthy ecosystem.

“Our alliance managers at Salesforce are different than at other tech companies,” Tom began the interview. “They are involved throughout the entire process of recruiting partners to build solutions, onboarding partners, and working with partners on their go-to-market for business growth. They are building customer success from day one. Our alliance managers are critical to the success of the partners, [and we are] all focused on the joint success of our customers. When partners come into our ecosystem, the sole focus really is on partner and customer success. We have a saying at Salesforce to our partners: ‘When you succeed, we succeed.’”

In late 2005, Tom joined Salesforce and started recruiting partners for the AppExchange. The AppExchange was launched in 2006. From the beginning, Salesforce had “partner account managers” that acted like alliance managers, she explained. During the past 12 years, the company developed a much larger team that is now “100 percent focused on partners, their success and joint customer success.” Salesforce’s alliance managers work with one to many partners, depending on the company size and revenue opportunity. One of the company’s newest partners, Nokia, underwent a transformation similar to what many larger Fortune 500 companies are now trying to create—new revenue channels through partnerships, she continued. The former phone maker transformed to serve communications service providers, governments, and consumers.  Nokia created Nokia Intelligent Care Assistant solution on the AppExchange to provide holistic view of the customer to drive fast solutions to customer care issues.

The AppExchange—the #1 enterprise cloud marketplace—also goes by another name: AppExchange, the Salesforce Store. “We refer to AppExchange as the Salesforce Store because it offers much more than apps,” she said. “In today’s customer-driven world, we have apps, components, bots, data sets, and more. In 2006, we were more of an app directory where customers could find Salesforce extensions. Today, the AppExchange offers intelligent recommendations, personalized engagement and guided learning paths to help our customers find the right solutions faster. We have more than 5,000 solutions and more than 6,000,000 installs on the AppExchange.”

Other app marketplaces offer a one-to-one exchange, such as if you download an app for your phone, she explained about the difference. “On the AppExchange, one solution can be deployed to thousands of users; it’s not a one-to-one exchange. In fact, 88 percent of all of our customers are using AppExchange solutions and 89 percent of the Fortune 100 use AppExchange solutions. What is also unique about the AppExchange is that we think about it like Amazon in terms of customer reviews and ratings. If you go to AppExchange.com, there are over 80,000 customer reviews with star ratings, so our customers can look at multiple solutions, evaluate on peer reviews, and find the right fit for their business challenges.”

She then returned to the central theme of the session and reiterated the most important point: building a strong partner ecosystem focused on the success of your customers. “If your focus is on customer success, your partners and your company will be successful together. That is how we work with our alliance managers—to ensure that our partners are focused on customer success.”

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 about the 2018 ASAP Tech Partner Forum at http://asaptechforum.org

Tags:  alliance managers  Amazon  API Economy  AppExchange  ASAP Tech Partner Forum  customers  ecosystem  Leslie Tom  partners  Salesforce  solution  transformation 

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