Partner or Perish: Forging effective alliances

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Partner or Perish: Forging Effective Alliances MaRS Best Practices Series: Alliance Management

John Buckingham June 3, 2009

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  Growing your business: Build or partner?

Partner or Perish: Forging Effective Alliances Session Objectives

Address key questions:

  How does one build and maintain an effective alliance?

  What defines a competent partnering organization?

©Buckingham Alliance Partners 2009

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Partner or Perish: Forging Effective Alliances

Continuing Learning: The leading global professional association dedicated to the formation and practice of strategic alliances

www.strategic-alliances.org ASAP - Toronto Chapter

www.asaptoronto.com Event:

Joint ASAP-CHLA Meeting: Focus on Alliance Management September 16-18, 2009 Niagara-on-the-Lake, Ontario

www.chlassoc.org


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Professional Certification: Masters Certificate in Strategic Alliance Management Intensive 12-day program:

Nov. 15, 2009 - Jan. 29, 2010 www.mastersinalliances.com

Available through ASAP - Toronto Chapter


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What is an Alliance?

•  An alliance is a collaboration

•  Between independent organizations that retain strategic autonomy

•  While committing resources to joint activity

•  And run within an incomplete contract


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Major Alliance Types:

Operational alliances

•  One or more key functions of a company is performed solely or primarily by an alliance partner

Project alliances

•  Alliance partners collaborate on a specific project, typically with defined progress milestones and a defined termination point


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Alliance Business Model

Supplementary

Alliances for Supplementation/Load

Balancing

Complementary

Alliances for Complementary

Capabilities, Offerings and Skills

Core

Core Capabilities and Competencies


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Why would we want to do this?   Alliances (collaborations) increasingly used to attain

company goals: •  Access to expertise •  Flexible resources •  Increased speed (of development, to market, etc.) •  Reduced financial risk


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Why would we want to do this?   Alliances (collaborations) increasingly used to attain

company goals: •  Access to expertise •  Flexible resources •  Increased speed (of development, to market, etc.) •  Reduced financial risk

  Less than 40% of alliances meet their stated objectives •  Misalignment of partner goals •  Miscommunications •  Poor execution •  Changed financial prospects •  Technical failure


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Why establish an alliance competency?

  Increase the proportion of alliances that meet or exceed their goals (and management expectations)


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 Accelerate ìnstitutional learning’ of effective (and destructive) behaviors affecting collaborations: enhanced organizational awareness

 Build consistency in effective alliance design, integration and maintenance processes


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 Accelerate ìnstitutional learning’ of effective (and destructive) behaviors affecting collaborations: enhanced organizational awareness

 Build consistency in effective alliance design, integration and maintenance processes

 Enhance company reputation as a skilled, successful partnering organization (to secure more, and more capable, partners)


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Key Alliance Management Competencies:

1. Communicating Effectively 2. Leading by Influencing 3. Gaining Value from Diversity 4. Building and Maintaining Trust


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Alliance Management Principles*

• Clear Responsibilities and Expectations

• Robust Communication

• Senior Management Commitment

• Understanding one’s Partner

• Disciplined Improvement Approach

• Effective, Efficient Processes

• Broad-based Alliance Capability

* Adopted by ASAP from Èndo Alliance Management Principles’

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Internal Organization for Alliance Management

Key Elements:

Senior Management Sponsor

 Alliance must serve sponsor’s organizational goals

  Dedicated Alliance Leader

 ̀ Mindshare’ or formal designation


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Effective Senior Management Sponsorship of Alliances

Why is Effective Sponsorship critical?

  Alliance failure rate – key factors:

 Internal support for resourcing and decision-making

 Ensuring alignment on key issues across partner organizations

 Effective dispute resolution


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Alliance Leadership Alternatives

Integrated Leadership Shared Leadership

  Internal/external

  Product Objectives/ Relationship Objectives


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Alliance Integration

Alliance Maintenance

Alliance Transformation

Alliance Negotiation

Contract Negotiation

Collaboration Integration

Agreement Signing

Alliance Life Cycle

Monitoring

Alliance Change or Termination

Prevention Diagnosis Treatment

Problem Resolution

R&D Commercialization

Alliance Management


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Manage Re-evaluate:

Revise or Terminate

Sign Launch/ Integrate

Negotiate

Evaluate

Identify/ Recruit

Opportunities

BD AM

Establishing an Alliance Management Competency

Alliance Management: Business Development Interface

Deal-Making and Deal-Managing: An Integrated, Transparent Process


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Alliance Management Perspective: Adding Value During Deal Negotiations

Three Main Considerations:

•  Due diligence: partner candidate assessment

•  Effective relationship development

•  Designing the appropriate collaboration structure


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Integrating a New Alliance

Key Considerations: •  Appointing a qualified alliance leader and a senior management `sponsor’ •  Timely recruiting of alliance-facing staff


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Integrating a New Alliance

Key Considerations: •  Appointing a qualified alliance leader and a senior management `sponsor’ •  Timely recruiting of alliance-facing staff •  Joint communication of management expectations and contractual requirements to the alliance team and leader •  Joint alliance team formation and relationship-building •  Establish alliance team charter


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Alliance Team Charter Template Guidance Resource for Alliance Management

Purpose: Provides focus, alignment and operational guidance to each alliance relationship. Serves as an operational reference and guide through the alliance lifecycle as a companion to contractual agreements and project plans.

Allied Companies: Your and XYZ Company

Alliance History and Background

Alliance Focus (Mission, Spirit of Alliance, High-Level Objectives/Milestones)

Alliance Working Guidelines (Addressing the Alliance Essentials)

Performance Measurement (Measuring and Monitoring Performance)

Roles and Responsibilities (Company Roles and Key Individual Roles)

Key Sections: •  Alliance mission, objectives

and spirit •  Roles and responsibilities •  Working guidelines •  Metrics and performance

measurement


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Alliance Integration

Alliance Maintenance

Alliance Transformation

Alliance Negotiation

Contract Negotiation

Collaboration Integration

Agreement Signing

Alliance Life Cycle

Monitoring

Alliance Change or Termination

Prevention Diagnosis Treatment

Problem Resolution

R&D Commercialization

Alliance Management


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Alliance `Health Check’ Surveys Assessment Resources for Alliance Management

Alliance Health Check

Purpose: Primary measurement mechanism for Relationship Performance factors

Strongly Disagree Disagree Neutral Agree

Strongly Agree

1. Alliance Focus (Goals and Objectives) a. Sensor Question b. Sensor Question c. Sensor Question 2. Roles and Responsibilities a. Sensor Question b. Sensor Question c. Sensor Question

3. Decision Making a. Sensor Question b. Sensor Question

Key Features:   Provides regular checkpoint

on essential Alliance competencies

  2-3 “sensor” questions per Relationship factor

  Results discussed with partner, to identify and understand areas for improvement and reasons for successful outcomes

  Action plans developed and implemented through Alliance Team

3. Relationship Trust a. Sensor Question b. Sensor Question


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Effective Senior Management Sponsorship of Alliances

Typical Alliance Governance Framework


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Strategic Importance to Alliance Partner

Stra

tegi

c Im

port

ance

to Y

our C

ompa

ny

Low High

Low

High Imbalance Balance

Balance Imbalance

Establishing an Alliance Management Capability

Alliance Structure and Management Considerations

Vulnerable Enthusiast

Potential Bully

Dynamic Duo

Simple Pairing


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  Growing your business: Build or partner?

Partner or Perish: Forging Effective Alliances Session Objectives

Address key questions:

  How does one build and maintain an effective alliance?

  What defines a competent partnering organization?


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Questions?
