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Page 1: ASAP Magazine Q2 2011
Page 2: ASAP Magazine Q2 2011

Choose the Consulting Partner of Choice for Alliance Partners of Choice. When the challenges of complexity threaten the success of alliance portfolios, alliance leaders turn to The Rhythm of Business for clarity amidst complexity. At The Rhythm of Business, we serve as thinking partners and guides providing cost-effective strategies, frameworks, and tools that:+ Increase alliance performance and effectiveness+ Drive financial results and other measurable value+ Reduce complexity (and risk) in your alliance portfolio

Tap into Our Broad Experience and Deep Industry Expertise. The Rhythm of Business cross-fertilizes ideas gleaned from diverse industries and across sectors while applying our deep expertise in alliance-savvy industries such as biopharmaceuticals, financial services, and consumer packaged goods.Advance Your Collaborative Capabilities. Partner with The Rhythm of Business for: + Partnering program design+ Alliance organization, staffing, and process design+ Guidebooks, toolkits, and metrics+ Alliance start-ups, strategic planning, assessments, and interventions+ Customized education for alliance managers, teams, and executives+ Alliance portfolio analysis and planning+ Internal marketing and communications programs

Partner with the Collaborative Business Specialists. Our consulting, education, and research services focus on driving innovation and growth through alliances and other collaborative relationships. We’re passionate about advancing the discipline of alliance management in all sectors, throughout industries, and across the globe. Visit our website www.rhythmofbusiness.com to access our extensive library of publications and presentations.

Confronting Complex Alliance Challenges?

Make the Simple Choice:The Rhythm of Business

“It is a pleasure to work with The Rhythm of Business! They have

been our partners in establishing alliance management within Astellas, growing the collaborative ability of our

organization, and supporting us in expanding our influence. They are always

there for us, no matter the challenge.”Mary Jo Struttmann, CA-AM, Sr. Director,

Alliance Management, Astellas

Don’t Let Complexity Undermine the Success

of Your Alliances. Contact The Rhythm of Business today at

+1 617 965 4777 or [email protected]

for the clarity to solve your toughest alliance

management challenges.

Page 3: ASAP Magazine Q2 2011

3Quarter 2. 2011

Growing Up – Just In Time

I’VE BEEN STRUCK BY A RECURRING thought over the past several months as I’ve worked with our editorial staff to transform ASAP’s vision of Strategic Alliance Magazine into the professional publication you hold in your hands now. Th e alliance profession truly is growing up—just in time to tackle some of the grandest and grittiest challenges in the business world.

As Our Profession Comes of Age, Alliance Management Will Depend on Mature Media to Support Its

Essential Role in BusinessBy Art Canter

We’ve reached a tipping point in our glob-ally interconnected and continually chang-ing economy. Strategic alliances and other forms of collaboration are attaining critical mass; in industry aft er industry, research, development, production, marketing, and sales have been transformed from largely internal functions into opera-tional processes that must be skillfully and professionally managed across partnering companies. As one ASAP member puts it, the Chief Alliance Offi cer is emerging as “the best job short of being CEO.”

In this context, alliance managers and collaborative business professionals become the critical players who help their companies and their partners navigate the challenges and complexities inherent in the collaborative business environ-ment. Just as signifi cantly, those who are not alliance managers can no longer ignore the alliance management function; their functions inevitably intersect with alliances, therefore they also must better understand, utilize, and be guided by the expertise, tools, and metrics of the alliance management profession.

Th at, truly, is the “meta story” that over-arches every story in this, our inaugural issue of Strategic Alliance Magazine: the alliance profession matters—a whole lot

now. In the pages that follow, see how:– Alliances were instrumental in the

decade-long makeover of France’s family-owned Ipsen into a publicly held, global biopharmaceutical player.

– A sophisticated alliance management program reinvigorated the longstanding go-to-market partnership between tech giants SAP and IBM.

– Another soft ware leader engages stakeholders across the company in a rigorous process designed to maximize the potential of its most promising col-laborative ventures; so-called “Path to Market” initiatives now drive in excess of 50 percent of partner revenues with SAS Institute’s largest alliance partners, including Teradata, Accenture, and IBM.

– Alliances also are a critical factor—for success or failure—in an increasing number of mergers and acquisitions, so smart companies now deeply engage alliance professionals before, during, and especially aft er business consolidations.

Because alliance management matters—because this profession is growing up—ASAP has recognized your need for dedicated, professional media that support and inform the daily work of the professional alliance manager. Led by our fl agship Strategic Alliance Magazine,

our ASAP Media program is unveiling a robust array of media off erings, ranging from digital newsletters and ASAP TV to our leadership-oriented “Challenges in Alliance Management” web seminar series. As with ASAP’s Global Alliance Summits and this quarter’s BioPharma Conferences, our commitment is to deliver content and programming that are as relevant as you are.

Please help us in this endeavor. Individu-ally, you can give us feedback and story ideas, become a benefactor (i.e., a paid subscriber), and encourage all of your colleagues to do so as well; on a company level, your organization can step up as a paying sponsor of the magazine and other ASAP Media. You will be rewarded on many levels for your contribution. And,

I think, helping out is one of those responsibilities that comes along with growing up—as a person, and as a profession.

Art Canter, president and CEO of ASAP, is executive publisher of Strategic Alliance Magazine.

up front

Page 4: ASAP Magazine Q2 2011

in this issue8 n COVER STORY

Getting Alliances Right from the StartBuilding a Solid Foundation for Alliance Success Pays Dividends Later By Michael BurkeWhat distinguishes successful alliances from those that fail? Putting effective processes, plans, and people in place from the outset. Good planning, coordinated communications, and realistic, fact-finding dialogue between alliance partners can pave the way for a smoother alliance path.

13 n ALLIANCE IN PRACTICE

Coping with the Aftermath of Those “Sweet” Licensing DealsWise Use of Flexibility Can Close the Deal—But Licensing Professionals Must Involve Alliance Managers to Manage the Risks | By Jan Twombly and Jeff ShumanThe aggressive pursuit of new sources of innovation and growth through alliances and other forms of collaboration has magnified competition for deals in industry after industry.

25 n ASAP CHAPTER AWARDS

Recognizing Individual Chapters’ Contributions to Increasing Membership and Raising Awareness of Our Profession

20 n SUCCESS STORIES

Alliance Excellence Awards Honor Most Compelling Alliances of 2010Honorees Bring Creativity and Innovation to Get Results from Alliance Management | By Jon Lavietes IBM’s SmartCamps Connect Start-ups with Vital Resources; HP Finds RIPE Improvement in Measurement of Its Alliances; IBM and SAP Revitalize Longstanding Partnership; Ipsen and Inspiration Create Hemophilia Drug Franchise

Quarter 2, 2011

The magazine of the Association of Strategic Alliance Professionals

AN ASAP MEDIA PUBLICATION www.ASAPmedia.org

www.strategic-alliances.org

EDITORIAL TEAM Art Canter,

Executive Publisher 781-562-1630 ext. 201

[email protected]

John W. DeWitt, Publisher

646-232-6620 [email protected]

Jon Lavietes, Editorial Director

415-572-4408 [email protected]

Michael Burke, Editor-in-Chief 413-345-1624

[email protected]

Greg Caulton, Creative Director

413-461-7096 [email protected]

ASAP STAFF Art Canter,

President and CEO 781-562-1630 ext. 201

[email protected]

Pam Goodell, Director of Operations 781-562-1630 ext. 202

[email protected]

Lori Gold, Manager of Member Services

781-562-1630 ext. 203 [email protected]

Michele Shannon, Program Event Coordinator

781-562-1630 ext. 204 [email protected]

Brendan Ward, Administrative Support 781-562-1630 ext. 200

[email protected]

Diane Lemkin Accounting Manager 781-562-1630 Ext 206

[email protected]

ASAP BOARD & MARKETING COMMITTEE CHAIRS

Russ Buchanan, CA-AM ASAP Chairman of the Board

Vice President, Worldwide Alliances Xerox Corp.

Jan Twombly, CSAP Chairman, ASAP Marketing Committee Member, ASAP Executive Committee President, The Rhythm of Business, Inc.

© Copyright 2011 Association of Strategic Alliance Professionals. All Rights Reserved.

4

Page 5: ASAP Magazine Q2 2011

32 n SPECIAL FOCUS: BIOPHARMA

Uncommon WisdomExpanded, Formalized Alliance Management Practice Helps Ipsen Keep Pace with Increasing Number, Complexity of Alliances By Jon LavietesIn 2008, Ipsen moved away from an ad hoc approach to its individual alliances and instituted its new alliance management practice overseen by its Corporate Business Development department. Strong commitment from executive leadership and validated alliance management best practices have driven its alliance success and helped a relatively small company compete in the biopharma marketplace.

3 n UP FRONT | By Art CanterAlliance Management Will Depend on

Mature Media to Support Its Essential Role in Business

12 n FEEDBACKComments, kudos, corrections, and other brief

thoughts from ASAP members and other readers of Strategic Alliance Magazine.

5

Regular Features:

Quarter 2, 2011

16 n COLLABORATIVE BUZZAlliance News Briefs | People in the News | ASAP Calendar of Events | ASAP Chapter Updates

41 n SOLUTIONS MARKETPLACEProducts and services for and from strategic alliance professionals.

27 n ALLIANCE ADVOCACY

Alliances 101: SAS Institute Paves a Path to MarketA Portfolio Approach Can Unleash the Full Potential of Partner Initiatives—Again and Again | By John W. DeWitt and Jon LavietesBeginning in 2006, analytics software giant SAS Institute created a formal performance management process to align specific partner initiatives— co-developed products, collaborative solutions, and other joint go-to-market offerings—with overall SAS business objectives. Replacing ad hoc efforts, this Path-to-Market “portfolio approach” has increased the likelihood that partner initiatives reach their intended scale and revenue impact. Today, PTM initiatives drive more than 50% of revenues in the largest SAS alliances.

Page 6: ASAP Magazine Q2 2011

Quarter 2, 2011

The magazine of the Association of Strategic Alliance Professionals

Strategic Alliance Magazine is published quarterly. Publisher is The Association of Strategic Alliance Pro-fessionals, 960 Turnpike Street, Canton, MA 02021, 781-562-1630. Subscriptions are $99 for one year, $189 for two years. Canadian subscriptions are $149 per year. All other international subscriptions are $199 (using air mail). Subscription inquiries: +1 781-562-1630. Peri-odicals postage is paid in Chicopee, MA, and additional mailing offi ces. Postmaster: Send address changes to STRATEGIC ALLIANCE MAGAZINE, 960 Turnpike Street, Canton, MA 02021. Copyright 2011, The Association of Strategic Alliance Professionals. No part of this publica-tion may be reproduced, stored in any retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher. For reprints, please contact The Association of Strategic Alliance Professionals, 781-562-1630.

Strategic Alliance Magazine

in this issue

38 n SPECIAL FOCUS: BIOPHARMA

Survey: Alliance Teams’ Infl uence Depends on Success in Handling Increasing ResponsibilitiesNew Study Reveals Alliance Management Teams Reach a Crossroads as Portfolios Grow | By Jon LavietesAs alliance portfolios grow, alliance management teams do not. Consequently, many alliance management responsibilities get pushed to non–alliance manage-ment personnel. Realigning resources and ensuring a smooth transition when integrating alliance management teams with other parts of the company are critical to the success of alliance portfolios.

36 n ALLIANCE IN PRACTICE

Guiding Alliances Through Biopharma ConsolidationsMergers and Acquisitions Pose Critical Challenges—But Good Alliance Programs Already Have the Skills and Processes Needed to Cope with Change | By John DeWitt and Jon Lavietes

When companies acquire or merge, it inevitably impacts alliances on both sides of the transaction. Moreover, the quiet period between announcement and consummation of public deals

can trigger concern and restlessness, leaving alliance personnel on all sides feeling in limbo. Th e solution: involve alliance managers early, communicate proactively with partners—and know your partnership agreements thoroughly so you’re prepared for inevitable change.

42 n POINTS OF VIEW

The Human Factor: A Key Determinant of Alliance SuccessTh e Neglected Role of Behavioral DynamicsBy Curtis R. SprouseWhile companies concentrate on alliances’ contract structure, governance, confl ict resolution, and general business processes, they are neglecting the most critical determining factor of an alliance’s success: behavioral dynamics. Guest contributor Curtis Sprouse says poor behaviors and dysfunctional relationships are the root cause of most failed alliances.

100%

80%

60%

40%

20%

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corporate strategyImportant tactical

team membersLess than 3 years 3 to 5 years More than 5 years

Don’t knowwho AM is

Expendable function

CEOs’ Perceptions of Alliance Management

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ents

6

Page 7: ASAP Magazine Q2 2011

Develop Your Alliance Strategy▶ Defi ne (or refi ne) an alliance strategy that

meets overall corporate strategy and business unit objectives

Benchmark Your Alliance Management Capability ▶ Benchmark your alliance management capabilities

relative to competitors

Design and Implement Your Alliance Management Program ▶ Create an alliance program blueprint and imple-

ment a framework for improved alliance success rates and better business results

Launch Your New Alliances ▶ We facilitate a carefully designed set of activities

between partners

Remediate and Relaunch Relationships▶ We conduct comprehensive assessments of alliance

performance and help revitalize faltering partnerships

Alliance Management Training Solutions▶ Designing and Implementing Comprehensive Alliance

Training Curriculum

▶ Designing and Implementing Alliance-Specifi c Team Training

▶ Training Alliance Management Groups

About Vantage PartnersVantage Partners, a spin-off of the Harvard Negotiation Project, is a management consulting fi rm that specializes in helping companies achieve breakthrough business results by transforming the way they negotiate, and manage relationships with, key business partners.

To learn more about Vantage Partners, visit www.vantagepartners.com, call +1 617 354 6090, or e-mail [email protected].

Conventional advice about alliances has not reduced their dismal failure rate. By working with Vantage,companies maximize the performance of individual alliances, put under-performing alliances back on track, and ensure coordination and optimization of their entire alliance portfolio.

Success requires shifting your focus to a complementary set of principles. To help companies address and fi nd solutions to their specifi c alliance challenges, Vantage Partners offers a broad range of services:

Make Your Alliances Work

Let Vantage Partners Help Your Company Negotiate and Manage Critical Relationships

Check Out Our New Alliance CompendiumReceive “Making Alliances Work,” our new collection of complimentary Vantage Partners Alliance Management publications—including some of Vantage’s most requested HBR articles, white papers and research fi ndings on the topics of alliances, negotiation, relationship management, and change management. To request your copy of “Making Alliances Work,” visit www.vantagepartners.com/ASAPAllianceCompendium.aspx

Check Out Our New Alliance CompendiumReceive “Making Alliances Work,” our new collection of complimentary Vantage Partners Alliance Management publications—including some of Vantage’s most requested HBR articles,

Helping Companies Negotiate and Manage Critical Relationships

Page 8: ASAP Magazine Q2 2011

Getting Alliances Right

8 Strategic Alliance Magazine

Page 9: ASAP Magazine Q2 2011

9

Building a Solid Foundation for Alliance Success Pays

Dividends LaterBy Michael Burke

MOST ALLIANCE MANAGERS AND OTHERS experienced in work-

ing with partners have war stories—even horror stories—about alliances

that went sour, perhaps “good alliances gone bad.” But what distinguishes

successful alliances from those that fail? If there is one single factor, it may be

that alliances that succeed do so by getting it right from the start.

Getting Alliances Right

Quarter 2, 2011

from the Start

Failure to Launch? A partnership’s early phases can make or break the entire alliance; it’s where either the foundation for success is laid down or, to mix metaphors, the seeds of its destruction are planted. “Th ere are so many things that can go wrong up front,” said Jef-frey Jewell, CA-AM, director of alliance manage-ment at the biopharma company Nycomed. “In-ternally, if there is not full alignment going into the discussions with the partner, pushing the pro-cess forward is problematic in many respects.”

Early on, in the negotiations phase, for example, “people may say ‘we’ve got to hit the market in three months,’ and everyone goes wild,” Jewell said. “Communications are not done in a coordi-nated fashion, and activities begin before there is planning among the partners. Th ey’re initializing the process without planning. More problems oc-cur in that initiation phase when communications go wild with people—they feel they’ve got to get everything done within their department, and they don’t take time to plan the operationalization of the alliance appropriately with the partner.”

Good planning, coordinated communications, and a good-faith joint eff ort between the partners can

counteract these sometimes market-driven pressures and pave the way for a smoother alliance path.

“What I have done most recently is initiate a lock-down on communications until we meet with the partner,” Jewell explained. “Th e alliance management group can meet and decide what communications are essential immediately, and which ones can wait until the whole process unfolds. Within our organiza-tion we have a 100-day plan, which is implemented toward the end of negotiations and contract signing and is designed to guide us through the initial setup of the alliance, establishment of agreed-upon processes, alliance health monitoring, and ultimately alliance termination. It’s a standard process we follow.”

Standard Operating Procedure for AlliancesOther organizations follow similar procedures, of-ten including a 100-day plan or timeline. In fact, according to alliance managers and consultants familiar with the alliance process, successful al-liances tend to have certain key features in place from the start. Th ese include:

A Negotiation/Evaluation phase, in which nego-tiations occur, and alliance managers and other

Page 10: ASAP Magazine Q2 2011

Strategic Alliance Magazine10

relevant personnel identify risks to both partners, set up a governance committee, and distribute authority, assigning roles and responsibilities to people in both organizations.

During this period, a risk assessment evaluates:– The two partners’ possibly different strategies or

“strategic intent” (i.e., what they hope to gain from the alliance, which might be different for each)

– Each company’s experience with partnering– The impact of any competitive products on the

alliance– The capabilities and resources each partner brings

to the table– The business ethics and operating philosophy of

each partner

In terms of governance, consultants and alliance man-agers say, the key elements are:– Composition of governance committees: who is

involved?– Decision-making authority: who is responsible?– Escalation of conflicts: how are differences and

other issues and problems to be communicated and rectified?

– Understanding of contract terms: alliance manag-ers need to have a thorough understanding of the contract; other relevant personnel may need just a summary of its key terms

– Determination and definition of milestones and timeline for their execution

– Mutual understanding of any intellectual property involved

Next, in the Planning and Launch phase, the impor-tant features include:

– Initiating relevant teams and establishing a sched-ule of regular meetings among them and between the alliance managers

– Communication: coordinated, scheduled, mutual– Common understanding of priorities, especially in

the short term– Kickoff/launch meeting – An alliance management plan

Culture ShockDifferences in corporate cultures between two part-ners are a common reality that can be factored into the alliance start-up via planning and communication—or can derail the potential success of an alliance if not dealt with from the start of the process. These compa-ny differences can take various forms, and if not faced openly and explicitly from the beginning can cause “culture shock” that impedes the forward momentum of an alliance, or even brings it to a skidding halt.

“Often one company tries to be the ‘alpha company,’ even though it’s not in everyone’s interest,” said Jewell. For example, “you’ve got pharma companies that are basically marketing companies—they just end-license [products], they don’t do any development. They find a product, grab the product, take it and say to the part-ner, ‘Thank you, have a nice day.’ That company just wants to run, and may do a marketing campaign that’s contrary to yours in the rest of the world.”

Corporate culture shock and mixed messages can arise if communications are not transparent or coordinated properly, Jewell said. High-level executives thus need to talk early to establish each company’s goals and anticipate issues that could potentially be contentious down the road.

Staffedalliance team

Defined governancestructure

Business culturalassessment

Guiding principles

Working togetherprotocols

Skill building plan

Charters forcommittees and teamsAligned decision-makingrights and responsibilities

Joint escalationmethodology

Joint negotiationdebrief Alliance vision

Functional &Integrated project

plans

Joint alliancescorecard

Process for evaluatingand adjusting the

alliance

Commitmenttracking mechanism

ITinfrastructure

Internal negotiationdebrief

PR/Communicationplans

Communicationguide

Resourceinternal team

and prepare for launch

Build jointunderstanding of

the alliance missionand contract

Create individual/functional and

integrated project plans

Define thealliance

evaluation process

Operationalizegovernance

structures and processes

Identify and plan for

how to deal withdifferences

Transition from negotiation Document detailed joint business plans Build a resilient relationship

ACTI

VITI

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ELIV

ERAB

LES

A 100 DAY PLAN TO ORGANIZE AND PRIORITIZE EFFORTS

Source: Mark Wingertzahn, CA-AM | April 2011

Page 11: ASAP Magazine Q2 2011

11

…these interactions with the new partner— the “getting to know you” phase—are crucial. It’s important that both corporations have a clear understanding of each other’s philosophy and approach to business.

Quarter 2, 2011

“[Sometimes higher-level executives] do not want to have what they consider ‘trivial’ conversations like that—but they are critical to alliance success,” said Jewell. “[When you have] VPs sitting around a table, and they don’t want to talk about vision, mission, dif-ferences or how to resolve them—that is a recipe for problems down the line.”

Getting to Know You— Early and OftenOrganizations also differ in how early in the process al-liance managers get involved—some sit in on actual ne-gotiations, whereas others enter the process only at the end of negotiations or afterward. Many in the alliance management profession believe it is a best practice for them to be present and participate in negotiations. One of those is Mary Jo Struttmann, CA-AM, senior direc-tor of alliance management at Astellas US.

“I’m fortunate enough, here at Astellas, that my team is involved in negotiations,” said Struttmann. “Alli-ance management’s early interactions with potential partners focus on understanding their corporate cul-ture. How do they approach decision making, what’s their level of commitment towards effective partner-ing, what’s their tolerance for risk? What’s their busi-ness philosophy? Is it similar to Astellas’? ”

In fact, these interactions with the new partner—the “getting to know you” phase—are crucial, according to Struttmann.

“It’s important that both corporations have a clear un-derstanding of each other’s philosophy and approach to business,” she said. “Especially, what is each company’s level of risk? Within different corporations the tolerance for risk varies. As you begin to work together, you gain a better understanding of each other’s philosophies. [Ac-knowledging the] different corporate cultures—that re-ally drives your whole approach.”

Learning from your partners and optimizing the core strengths you brought them in for is rewarding—but can be challenging. And the issues that may cause frustration or misunderstanding to arise are not con-fined to biopharma companies, according to Jewell.

“Alliances are alliances,” he said. “I don’t see a huge difference between biopharma alliances and others. Controlling the flow of information up front—every-one has that issue. We may think from a biopharma standpoint that our alliances are peculiar or different because they’re research or development based, but I don’t see how that differs from a copier company that

develops something different, a new copier—one is a drug and one is a device.”

Pitching to the C-Suite and Wearing Two HatsAnother important aspect of the alliance start-up pro-cess is getting buy-in from senior executives within one’s own company. “You’re only as effective as upper management will allow you to be,” Jewell said. “If up-per management doesn’t buy into the alliance and see the value of the alliance management function, you are pretty much hand-tied to follow a natural progres-sion of chaos.”

However, beware of those internally that put their own immediate needs ahead of the alliances.

“You cannot represent your own interests when you have a stake in that interest,” Jewell said. “A project manager heads up a project—you can’t be objective in an alliance management discussion. You have your interest, the project, uppermost in your mind. When a problem occurs, [the project manager] can’t nego-tiate their way out of it, they have self-interest, they can’t remove themselves from it. They can’t even see the partner’s perspective. A true alliance manager should represent the partner, be the best ally of the partner’s interest in their organization.”

Struttmann of Astellas agreed. “I’m always telling our executives, about our partners, ‘Put yourselves in their shoes. How can we mutually come together with the

Page 12: ASAP Magazine Q2 2011

Strategic Alliance Magazine12

interests of both parties in mind, and fi nd a mutually agreeable solution that moves things forward?’ We’re doing a lot of internal alignment within Astellas. When you talk to alliance directors, you spend a lot more time trying to align internally, especially when you’re in a global alliance.”

Two Pillars: Communication and PlanningMost experts in the fi eld of alliance management con-cur that the two most critical elements in ensuring al-liance success from the start are communication and planning. Or as one consultancy’s alliance guidebook put it, to establish a “collaborative foundation,” organi-zations and teams must:– Coordinate activities– Communicate information– Leverage resources– Build trust

“Communication is key, but more [important] than communication is a clear understanding of roles and responsibilities. Th at’s where you can run into a lot of problems, when people don’t understand their role and what are they responsible for,” said Struttmann.

To get every stakeholder on the same page, Astellas reviews the alliance agreement and tailors pertinent information to each engaged functional area and in-ternal committee.

“It’s really [about] communicating eff ectively, coor-dinating your activities, leveraging your resources, letting the corporation with expertise in a particular area take the lead, understanding the governance and decision-making process,” said Struttmann. “[Th en] you have to have transparency, and hopefully your trust will fl ow from that.” n

Dear Readers,This is the space where, in future issues, we’ll print what in the magazine and newspaper business are still quaintly referred to as “letters to the editor”—comments, kudos, corrections, cheers and boos, and other brief thoughts from you, ASAP members, and all our readers. In this inaugural issue of Strategic Alliance Magazine, however, we naturally don’t have that kind of feedback yet.

So I thought I’d use this space for now, in my role as Strategic Alliance Magazine’s editor in chief, to encourage you, our readers, to talk back to us: tell us what you like, what you don’t like, what you’d like to see more of, whom you’d like to see profi led, and any and all thoughts, comments, queries, sug-gestions, story ideas, and so on.

A magazine, or any publication, is only as good as the relationship it establishes with its readership, and especially in these much more interactive days of electronic publications, social networking, and the like, it’s even more critical that we fi nd ways to communicate with one another. Our objective with Strategic Alliance Magazine is to create a vehicle for an ongoing conversation about the profession of alliance management—best prac-tices, war stories, anecdotes, studies, lessons from the fi eld, and everyday problems involving alliances and other collaborations in the business world. And the only way to have a real conversation about these topics is for Strategic Alliance Magazine in eff ect to facilitate a multiway discus-sion among our writers, editors, and most of all, our readers.

So please, as you look through this fi rst-ever issue of Strategic Alliance Magazine, be thinking of ways you can help us improve your publica-tion and make it work better for you with each issue that comes out.

We appreciate your thoughts and your feedback on all that you see in these pages, and we’ll use it to make a better magazine that’s for you and about you and the work you do every day.

To get in touch with us, e-mail us at [email protected], call us at 781-562-1630, or write to:960 Turnpike St, CantonMA 02021 USA

And thanks!

Michael BurkeEditor in Chief

feed back

Page 13: ASAP Magazine Q2 2011

13Quarter 2, 2011

New Alliances:Coping with the

Aftermath of Those “Sweet”Licensing Deals Wise Use of Flexibility Can

Close the Deal—But Licensing Professionals Must Involve Alliance Managers

to Manage the Risks By Jan Twombly, CSAP

and Jeff Shuman, CSAP, PhD

To make their companies more desirable than other con-testants, licensing and business development executives increasingly are willing to do deals they previously would have passed up, offering flexible, innovative terms and signing agreements that share more revenues, responsibili-ties, decision making, and risks.

Not surprisingly, using flexibility to close deals has worked well—often too well. Deals get done and the licensing and business development professionals who are rewarded based on deal flow are quite happy. Unfortunately, the flexibility offered by those companies pursuing a deal can significantly increase risk due to the complexity of actually managing the alliance once launched. Risk and complexity are the enemies of value. Certainly, deals should be inno-vative and flexible; however, innovation and flexibility in a deal should not create such operational risk and complexity that it becomes impossible to realize the value intended.

Flexibility vs. the Cost of Time Our research study of over 50 potential biopharma part-ners, conducted for a major pharmaceutical company, found that, for licensors, the most important criterion is

the licensee’s commitment to expeditiously develop their asset and get it to market. The second most desirable char-acteristic is the licensor’s willingness to cede participation and decision making rights, usually described as “being

THE AGGRESSIVE PURSUIT OF NEW sources of innovation and growth through alliances and other forms of collaboration has magnified competition for deals in industry after industry, resulting in a beauty contest atmosphere in which company after company positions itself as “The Partner of Choice.”

Governance committees need the actual authority to make the decisions embodied in their role as envisioned in the agreement. If committee members regularly have to “get back to you” after consulting superiors and other stakeholders, the partner may begin to think that decisions are made behind closed doors and not collaboratively. It also likely adds to the number of times that decisions are reconsidered for no apparent reason.

Page 14: ASAP Magazine Q2 2011

For too long, we’ve done the most important job nobody knows about. Despite playing an increasingly critical role in industry after industry, alliance professionals have remained off the radar screens of most business media. So the story of ASAP and strategic alliances has rarely been heard by general business audiences – or even within our own profession.

Now that’s changing, thanks to the launch of ASAP Media and its flagship, Strategic Alliance Magazine. Self-publishing helps other professional associations – such as the American Marketing Association and the project Management Institute – to share best practices, educate external audiences, and create pride in their profession. Now Strategic Alliance Magazine and ASAP Media will do the same for ASAP and the alliance profession as a whole. But we still need your help – as an ASAP Benefactor. Please consider supporting Strategic Alliance Magazine, at one of the following levels:n Silver Benefactor: $50n Gold Benefactor: $100n Platinum Benefactor: $150n Titanium Benefactor: $500

All individual benefactors will be named – along with their company and ASAP chapter if desired – on a special page of the magazine. As a benefactor of Strategic Alliance Magazine, you support the media that support you.

Don’t miss this one-time chance to help launch your profession’s new media. Visit www.strategic-alliances.org today!

960 Turnpike St, Canton MA 02021 USA

Tel: 781-562-1630strategic-alliances.org

[email protected]

We didn’t like the news, so we went out and made our own.Now You, Too, Can Support the Media That Support Your Profession!

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Quarter 2, 2011 15

collaborative.” Meeting these requirements is tough. Too little flexibility and the competition wins the deal. Too much flexibility and the deal eventually backfires because operating and gov-ernance complexity leads to squabbles that delay development.

The value of flexibility can be eroded by the cost of time.

We’ve seen situations where one party would be economically disadvantaged by moving forward on a certain development path, but that party has final say over the development decision. Guess what—no decision made. The dispute delayed development for over a year. Or con-sider the case of a company that inadvertently gave their partner the leadership over the com-mercial team—despite the fact the partner didn’t have to opt into co-promotion until the product launched. Differences of opinion led to many unnecessary stalemates and delays. Ambiguity in what is meant by requiring input and advice when the risk and responsibility is on the other partner has resulted in costly litigation. In all of these situations, one can be sure that the licensors no longer felt they were working with a “partner of choice.”

Additionally, alliance governance must be aligned with corporate decision making. Governance committees need the actual authority to make the decisions embod-ied in their role as envisioned in the agreement. If com-mittee members regularly have to “get back to you” after consulting superiors and other stakeholders, the part-ner may begin to think that decisions are made behind closed doors and not collaboratively. It also likely adds to the number of times that decisions are reconsidered for no apparent reason.

Alliance Managers Manage Complexity, Mitigate RiskStrong alliance management capability can take out some of the complexity, charting a course to mitigate the risks caused by the “flexible” operating and gov-ernance terms of alliance agreements. When licens-ing professionals and alliance managers partner with one another to evaluate and negotiate with potential partners, they can be sure that the risks that exist due to having viewed flexibility as a currency are identi-fied, planned for, and managed. Additionally, alliance managers bring their experiences in implementing and living with alliance agreements and can provide

specific examples of how well-intentioned provisions have caused operational chaos.

In some companies, there is recognition of this need for internal partnering to smooth the transition from deal execution to deal implementation. Our 2010 study, Practice of Alliance Management in the Biopharmaceu-tical Industries, found that 67 percent of the alliance managers who participated (representing 47 companies from around the world) have a reporting relationship into business development. Additionally, 40 percent of respondents said that alliance managers in their com-pany actively participate in the evaluation of potential partners and the structuring of the deal agreement.

Getting the deal is important, but it’s not the end game. Rather, it marks the starting point for the real work of the alliance. Flexibility is a valuable currency, but unless the management risks it creates are properly identified, planned for, and managed, flexibility can become the Achilles’ heel of an alliance-centric strategy. n

Jan Twombly, CSAP and Jeff Shuman, CSAP, PhD, are principals of The Rhythm of Business, Inc.(www.rhythmofbusiness.com) in Newton, Mass. Twombly is a member of ASAP’s Executive Com-mittee and Shuman, a professor of management at Bentley University, is co-chairperson of ASAP’s Collaborative Innovation Council. An earlier version of this article appeared in the January 2011 issue of Effective Executive.

MANAGE RISK TO REALIZE VALUE

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16 Strategic Alliance Magazine

THIS YEAR’S DISCUSSION focused on strengthening the alliance manage-ment “muscle” and defining the initia-tives underway to build the influence of their group, attract talented people, and increase the impact of alliance manage-ment. With a diverse group of people participating, representing some of the

most influential companies in biophar-maceuticals, consumer goods, financial services, high-tech manufacturing, and information technology, the conversa-tion quickly proved to be enlightening.As the economy recovers, many com-panies are focused on growth and are looking to their alliances as a source of innovation. In some instances this implies engaging with partners in are-nas they might not have considered previously. The alliance management function is becoming more strategic, too, with several participants citing a reporting relationship with the cor-porate strategy group, regular updates

to the senior executive team, and involvement in M&A work.As alliances and other collaborations take on a greater role in the growth strategies of companies, it isn’t surpris-ing that alliance management groups are spreading their wings a bit, too. For some this means initiatives to ensure that they are known throughout the enterprise as the source of knowledge and expertise about working in alliances and other collaborations. Often, alliance management begins in a particular business or geography. It becomes well established in that business but it isn’t al-ways so easy to spread beyond the home base and build an enterprise capability. Several participants are working on using ASAP certification as the means to develop a common baseline of under-standing throughout their companies.Finding the right people to serve as alliance managers is a perennial topic of discussion at the CAO Roundtable. Vision and foresight were among the most frequently mentioned desired abilities in an alliance manager. Thus, some CAOs look for people who are entrepreneurial—who can see a vision a few years out and bring others on board to achieve it. Being able to negotiate in-ternally and influence the organization to achieve that vision is essential.

CAOs have differing views as to the career path of an alliance manager. One perspective is that an alliance manager should be on the path to becoming a gen-eral manager of a business unit. Another is that he or she should be pretty senior to begin with and plan on staying in alli-ance management for awhile. However, some companies are experimenting with developing job descriptions within alli-ance management that allow for career progression, to get people started early in their career, perhaps as early as recent college grads. Regardless of the approach taken, the CAOs agreed with one partici-pant’s comment: “It is the best job short of being CEO!”

ASAP NewsNew Staff MemberASAP is pleased to welcome Lori Gold as manager of member services. Most recently Lori was the director of member relations and sales at the Jewish Community Centers of Greater Boston, where she was responsible for directing and implementing plans and programs designed to enhance the acquisition, retention, and satisfaction of all members. Previously Lori was the director of membership and busi-ness development at the Massachu-setts Biotech Council, and was senior

Leaders Look to Strengthen Alliance Management Muscle at 2011

Chief Alliance Officer RoundtableBy Art Canter

One of the highlights of ASAP’s annual Global Alliance Summit is the Chief Alliance Officer (CAO) Roundtable. This invitation-only, intimate discussion is reserved for the heads of the alliance management function of ASAP Global Sponsors and other special guests. The conversation provides a unique opportunity for these executives to share their priorities for the coming year and to get insight into what their peers are thinking.

Collaborative Buzz

Regardless of the approach taken, the CAOs agreed with one participant’s comment:

“It is the best job short of being CEO!”

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director of member services at the Massachusetts Hospital Association.

New PositionsHarry Atkins, CSAP, ASAP’s treasurer and member of the executive commit-tee, is now senior director, corporate development, at Dr. Reddy’s Laborato-ries in Bridgewater, NJ.Jay Chitnis, CA-AM, president of ASAP’s California Chapter, is now direc-tor, business development and allianc-es, at Isilon Systems, an EMC company.

ASAP Events2011 ASAP BioPharma ConferencesRealizing Value Through Effective Alliance ManagementMay 31-June 1, Basel, SwitzerlandJune 1-2, New Brunswick, N.J. USA

2012 ASAP Global SummitMastering the Art and Science of AllianceMarch 5-8, 2012Caesars Palace, Las Vegas, Nev., US

To register for these events, visit www.strategic-alliances.org

Alliance News Quintiles Supports Samsung’s Entry into Biopharma Market Through Joint VentureSamsung Electronics Co., Ltd., the world’s largest electronics company, and its affiliated companies have entered into a strategic partnership with Quintiles, the world’s leading pharmaceutical services company, to support Samsung’s entry into the biopharmaceuticals mar-ket, Quintiles announced recently.Under an agreement signed in Febru-ary, Quintiles will make a minority 10 percent investment of approximately $30 million USD to start a new joint venture company with Samsung in the first half of 2011 to provide biopharma-ceutical contract manufacturing services in South Korea. Samsung will own the remaining 90 percent of the joint venture company.The strategic partnership will support

Samsung’s entry into the biopharma-ceutical market and reinforces Quintiles’ role as an ally to help companies suc-ceed in the new health landscape.http://www.quintiles.com/news/2011-2-28/quintiles-samsungs-biopharma-joint-venture/

Lilly and Boehringer Ingelheim Announce Strategic Alliance to Bring New Diabetes Treatments to Patients WorldwideEli Lilly and Company and Boehringer Ingelheim have announced a global agreement to jointly develop and com-mercialize a portfolio of diabetes com-pounds currently in mid- and late-stage development. Included are Boehringer Ingelheim’s two oral diabetes agents—linagliptin and BI10773—as well as Lilly’s two basal insulin analogues—LY2605541 and LY2963016—and the option to co-develop and co-commercialize Lilly’s anti-TGF-beta monoclonal antibody. This major diabetes care agreement centers on four pipeline compounds representing several of the largest and most promising product classes. Boeh-ringer Ingelheim’s innovative late-stage diabetes pipeline drives its expansion into a new therapeutic area, supple-mented by two basal insulin analogues, currently under development from Lilly. The agreement also furthers Lilly’s com-mitment to offer one of the broadest portfolios in diabetes care and provide together with Boehringer more options for people with diabetes, their health care providers and payers.http://newsroom.lilly.com/releasedetail.cfm?ReleaseID=542971

Juniper Networks Partner Conference Celebrates Suc-cess, Looks to the Future of the New Network In April, Juniper Networks welcomed more than 700 channel partners to its 2011 Americas Partner Conference at the Arizona Biltmore Hotel in Phoenix, as well as virtually via webcast.

This annual event featured keynotes from Juniper Networks executives CEO Kevin Johnson, CMO Lauren Flaherty, CFO Robyn Denholm, and Senior Vice President of Worldwide Partners Emilio Umeoka.Themed “It’s Time to Build a New Network,” the event offered Juniper Networks’ partners throughout the Americas the opportunity to engage face-to-face with Juniper executives and other partners about the growing business value of the new network, and to discuss how to capitalize on the megatrends affecting the IT industry. The annual conference also celebrated the mutual growth and success of Juni-per Networks and its Americas partner community, and offered a closer look at the global and regional strategies, disruptive innovation, service specializa-tions, and go-to-market initiatives that further differentiate Juniper Networks and its partners.“Juniper Networks’ Americas partner community thrived in 2010, with our top-performing partners posting double-digit, year-over-year growth and earning a record-setting number of service and technology specializations,” said Frank Vitagliano, senior vice president, Partners-Americas, Juniper Networks.“Throughout 2011, Juniper Networks’ vision of ‘Innovative Partnering’ will empower our partners to be disruptively innovative, valued, and more profitable selling Juniper Networks,” Vitagliano said. “With the recent expansion of our portfolio and new service specializa-tions, Juniper Networks Partners are primed to not only grow their business-es, but lead the industry in building the new network. It’s our time and together with our partners we are accelerating the global adoption of the new network.”http://www.juniper.net/us/en/com-pany/press-center/press-releases/2011/pr_2011_04_11-08_00.html

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USAA Launches Alliance with the West Point Association of GraduatesAn agreement between USAA and the West Point Association of Graduates now gives eligible members of the Long Gray Line easy access to a comprehensive suite of the insurance and investment products and services offered by USAA, one of the nation’s highest-rated providers.WPAOG has endorsed USAA as its provider of choice for property and casualty insurance, car-buying services, auto loans, and investment products for West Point graduates and their families.“WPAOG enthusiastically endorses USAA insurance and investment products and services, and I encour-age our graduates to consider becom-ing members of USAA or expanding their use of USAA’s investment and insurance products and services,” said retired U.S. Army Colonel Robert L. McClure, president and CEO of the

West Point Association of Graduates.“Our affinity relationship is founded on USAA’s understanding of the fi-nancial needs of West Point graduates and their families, as well as USAA’s reputation for unsurpassed customer service. Many members of the Long Gray Line have associated USAA with automobile insurance,” McClure said. “Our new affinity relationship intro-duces our members and their families to many additional USAA products.”https://www.usaa.com/inet/ent_blogs/Blogs?action=blogpost&blogkey=newsroom&postkey=usaa_wpaog_alliance

Procter & Gamble and Teva Pharmaceutical Form Consumer Health Care PartnershipThe Procter & Gamble Company and Teva Pharmaceutical Industries Ltd. today announced the signing of a master agreement to create a partnership in con-sumer health care by bringing together both companies’ existing over-the-coun-ter (OTC) medicines and complemen-

tary capabilities to accelerate growth. This new business model combines P&G’s strong brand-building, consum-er-led innovation, and go-to-market capabilities with Teva’s broad geographic reach, its experience in R&D, regulatory, and manufacturing, and its extensive portfolio of products. “This unique partnership positions P&G and Teva to be a leading player in the consumer health care industry,” said Bob McDonald, chairman of the board, president and chief executive officer of P&G. “This is a remarkable opportunity to accelerate growth for both companies’ OTC businesses. Together, we will serve more consum-ers in more parts of the world, more completely, by increasing access to high-quality, affordable over-the-counter medicines.” http://www.pginvestor.com/phoenix.zhtml?c=104574&p=irol-newsArticle&ID=1542509&highlight=

Thanks to you, the vision of ASAP Media has become reality with this, the inaugural issue of Strategic Alliance Magazine. ASAP Media productions – including this magazine, ASAP’s e-news-letters, ASAP TV, and our forthcoming “Challenges in Alliance Management” Web Seminar series – are only possible because of the growing financial support of our sponsors and benefactors. Sponsors are our equivalent of advertisers in a for-profit maga-zine; benefactors are ASAP Members who agree to pay for a sub-scription (even though you get it for free if you’re an ASAP mem-ber). So thanks to the companies and individuals below for being the first to step up! We look forward to many others following your lead.

Charter ASAP Media Sponsors The Rhythm of Business – www.rhythmofbusiness.comPhoenix Consulting Group – www.phoenixcg.comVantage Partners – www.vantagepartners.com

Charter BenefactorsPLATINUM Benefactors (US $150) Phil SackSILVER Benefactors (US $100)Ed Sullivan

GOLD Benefactors (US $100)Lorraine Bassett, Dennis McCullough, Susan Sullivan

Follow these leaders! Learn how you can be a benefactor – and your company a sponsor – at www.strategic-alliances.org or call ASAP at +1 781-562-1630. Your support makes all the difference.

Collaborative Buzz cont.

Thank You to Our Sponsors and Benefactors!

Page 19: ASAP Magazine Q2 2011

Discover a World of Fun(and Networking, PLUS Professional Development)When You Join Your Local ASAP Chapter

Every day, you tirelessly champion the value of alliances and alliance management – but sometimes you just want to go where everybody knows your name … and doesn’t need you to explain what an alliance manager does for a living.

That friendly, welcoming place is your local ASAP Chapter.

ASAP’s worldwide network of chapters – spanning 19 regions and four continents – provides face-to-face networking and close-to-home professional development for alliance managers and collaborative business professionals. Whatever your in-dustry, you’ll find common ground with fellow alliance professionals in your local ASAP chapter.

ASAP members convene locally for mixers, cocktail hours, seminars, training ses-sions, panels, speakers, and other events. Local chapter members share everything from best practices to job opportunities, discuss pressing issues and common challenges, and further develop individual and team skills.

Find your local ASAP chapter – and learn about upcoming chapter events – at www.strategic-alliances.org/content/chapters. We promise you’ll have a good time – in your new professional home away from home.

For more information about ASAP Chapters, contact Lori Gold, Manager of Member Services: [email protected] or call 781-562-1630 ext. 203.

960 Turnpike St, Canton MA 02021 USA

Tel: 781-562-1630strategic-alliances.org

[email protected]

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LATE LAST DECADE, IBM launched its Smarter Planet campaign, an ambi-tious initiative to utilize information technology to tackle societal challenges in almost every aspect of today’s world. Problems in transportation, retail, oil and gas, banking, government, health care, and other industries were to be add-ressed by infusing everyday items with intelligent systems and processes.

Executing a bold program like Smarter Planet obvi-ously could not be done alone, and Big Blue knew it would need its highly successful $35 billion revenue business partner operation to achieve its goals. How-ever, a company that for decades had achieved tre-mendous success partnering with large and midsized companies across many industries was about to be confronted with a new challenge: cultivating the start-up community.

In 2010, IBM embarked on its Global Entrepreneur program, which set up several events around the globe dubbed SmartCamps that connected hundreds of start-ups with investment firms, serial entrepreneurs, academics, and tech experts that can help accelerate their solutions.

Fast forward one year, and Big Blue is now engaged with more than 1,000 start-ups, including SmartCamp competition winners like traffic and parking solution company Streetline and drug counterfeiting solution company Sproxil, who parlayed their SmartCamp vic-tories into national exposure in outlets like USA Today and The Wall Street Journal and additional rounds of venture capital funding. In addition, hundreds of other SmartCamp runners-up were referred to IBM’s Innovation Centers.

IBM’s SmartCamps Connect Start-ups with

Vital Resources

Alliance Excellence Awards Honor

Most Compelling Alliances of 2010

By Jon Lavietes

Honorees Bring Creativity and Innovation to Get Results from

Alliance Management

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21Quarter 2, 2011

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Strategic Alliance Magazine

IBM was one of five companies recognized by the Associ-ation of Strategic Alliance Professionals (ASAP) as a 2011 Alliance Excellence Award winner at ASAP’s 2011 Global Summit in Atlanta, along with SAP, HP, Ipsen, and Inspiration Pharmaceuticals. As is the case with all of the four award categories, the Global Entrepreneur program earned ASAP’s Alliance Program Excellence Award for reasons that go well beyond the end results.

“These awards don’t just honor great outcomes such as bottom-line revenue growth. Although net results are certainly important factors in our award selec-tions, the Alliance Excellence Awards also recognize the process as much as the endgame. The creativity that goes into how alliance success is obtained is as important as the results eventually achieved by these programs,” said ASAP president and CEO Art Canter.

In a short time, IBM had to evaluate which of its core al-liance management skills would work with this revenue segment that was new to them, then develop new systems and processes to fill in knowledge gaps. IBM found that three main principles were just as true partnering with small businesses as with larger ones: 1) start with your partner’s end goals and work from there, 2) help connect them with clients to grow their customer base, and 3) let partners leverage IBM’s exten-sive resources and ecosystem.“When you put those three focus areas or principles togeth-er, whether you are working at a small company or a large one, those apply as critical elements that will make sure you’re going to be successful,” said Mike Riegel, vice presi-dent of marketing for ISV and developer relations at IBM.

The key differences in working with these new compa-nies? Their narrow focus on immediate-term

objectives and the blazing pace at which they work, both of

which according to Riegel are needed for survival.

“When you’re at a start-up company

the culture is such that you are very focused on a

very short set of milestones. You are either trying to get the design finished, you have a beta discussion with a customer or prototype, or

you are focused on the right business design elements or

value proposition elements to

discuss at your VC meeting next week.”

Whatever near-term goal a SmartCamp participant happened to be honed in on at the moment always re-quired urgency.

“They work at a very quick speed and they want an an-swer quickly,” said Riegel.

This, of course, can be a major obstacle at a company as large as IBM, whose valuable services and expertise are scattered throughout dozens of offices around the world. Navigating the internal protocols and red tape to find the right person or group can be tricky, especially for outsiders.

IBM remedied the situation by designating a single con-tact for each start-up, responsible for obtaining the req-uisite piece of information or contact person in the vast world of IBM. Now, with one phone number SmartCamp participants had prompt access to IBM Research, Global Services, product capabilities, or specific knowledge re-lated to the myriad of industries or vertical markets IBM has excelled in for its 100 years of existence.

With Big Blue’s new partners now making a significant impact on Smarter Planet initiatives, IBM is expanding the number of countries that host SmartCamp compe-titions, adding China, Brazil, and India among other countries to the program.

“It’s really stretching globally to capture all of the inno-vation and the investment happening all around the world,” said Riegel. n

Mike Riegel, vice president of marketing for ISV and developer relations at IBM. Riegel spearheaded IBM’s Global Entrepreneur program, which earned ASAP’s Alliance Program Excellence Award for 2011.

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WHILE QUANTIFYING THE BOTTOM-LINE contributions of an alliance pro-gram to the C-level has been an age-old challenge for alliance managers, measuring the effectiveness of alliance professionals and teams is an even trickier science. Tech giant HP did not just want to accomplish the latter objective, it wanted the means to illustrate the efficacy of specific alliance elements on the fly. Thus, substandard aspects of a partnership could be adjusted before it cost the company down the road, while successful facets could be duplicated in other alliances in its portfolio.

HP Finds RIPE Improvement in Measurement of Its Alliances

IBM and SAP Revitalize Longstanding Partnership

HP unveiled its RIPE program, designed to illuminate specific areas of the partner sales engagement process. The RIPE program consisted of four categories: 1) Relationships, 2) Innovation, 3) Price, and 4) Engineering support provided by HP and the en-gaged partner in each sales assignment. Each category was rated on a 0–3 scale, and the results of this 12-point Engagement Index were tabulated and analyzed on a monthly basis to expose weaknesses in the partner sales process as they developed, not just in individual alli-ances but in the alliance program structure as a whole. Now the managers within HP Enterprise Services’ Agility Alliance program—the company’s formal part-nership program that includes Microsoft, KPMG, SAP, and Symantec in its ecosystem—could measure RFP performances across regions, individuals, or alliances, enabling the company to make critical modifications with unprecedented swiftness.

“We have several metrics in place that measure the impact of the Agility Alliance Program [as a whole] in terms of revenue generated, in terms of win ratio, [and] how it improved our probability to win the deal. So what we did with RIPE was to take this one step further and measure the intangible benefits of how we engage,” said

Patrik Strebel, director of global alliances for HP’s Enterprise Services division.

The new insights gleaned from RIPE helped HP dra-matically improve the quality of the sales engagements it embarked on with its partners. In 2010, the value of HP’s partner engagements in North America exceeded estimates by 185 percent, while the company won 50 percent more sales engagements when formally engag-ing with partners despite a slowly recovering economy.

For successfully grappling with the quantification of its alliance program and the individual attributes of each partnership’s sales engagements, ASAP be-stowed the Innovative Alliance Practice award on HP’s RIPE program. n

IN THE LONG-ESTABLISHED ALLIANCE CATEGORY, ASAP honored IBM and SAP for reinvigorating one of the world’s most successful alliances after the global recession of 2009 exposed warts in the relationship that had not been fully acknowledged in better times. For 35 years, the two companies had gone to market jointly to package SAP’s software with IBM’s, hard-ware, middleware, and consulting services. Both com-panies contributed a lion’s share of the other’s alliance revenues in that time. And while global market forces can be blamed for much of the precipitous drop-off in IBM-SAP alliance revenues, both companies rec-

ognized that it might also be time to fine-tune their partnership approach.

Thus, it was back to basics. SAP and IBM alliance

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Strategic Alliance Magazine

Ipsen and Inspiration Create Hemophilia

Drug Franchise

personnel had to recommit to understanding their partner’s value propositions. Each company’s EMEA teams began the process by increasing the level of engagements at the country level and looking for truly synergistic sales opportunities. IBM personnel had to truly think about how to differentiate SAP’s

application software, while SAP had to in a sense relearn how to differentiate IBM from the other sys-tem integrators.

While neither company will offer specific figures, both confirm that revenue growth accelerated once again in 2010. This comes in stark contrast to the fates of other high-profile IT alliances last year as market forces compelled HP and Cisco to end their longstanding alliance while Oracle and HP continue to squabble publicly amid rumors of an end to their partnership. n

converted into further ownership of Inspiration. When the partnership reaches a certain set of milestones, Ipsen would have the option of buying the rest of Inspiration, thus bringing into Ipsen a fully functioning business with both expertise and income. This agreement was pat-terned on a previous deal Ipsen made with endocrinol-ogy biotech company Tercica. Ipsen bought a 20 percent interest in Tercica as part of a transaction in which the lat-ter licensed an Ipsen compound in America, while Ipsen did the same for a Tercica drug globally.

“We ended up buying [Tercica] out, and they became our commercial platform for entry into the United States, but [unlike the Inspiration deal] the buyout was not contractually planned when the deal was formed,” said Sean McKercher, senior vice president of corpo-rate business development at Ipsen.

The Tercica deal worked so well, Ipsen decided to simulate it in the Inspiration agreement. The creativity of Ipsen and Inspiration’s hemophilia franchise netted them ASAP’s Emerging Alliance award. n

ONE ALLIANCE IN IPSEN’S SUCCESSFUL PORTFOLIO (see cover story of BioPharma Special Focus p. 32) involved the formation of a new hemophilia drug “franchise” with biotech company Inspiration Pharmaceuticals. Ipsen added its innovative phase III (late-stage development just prior to submis-sion for approval) OBI-1 compound to Inspiration’s portfolio, which included the promising IB1001 product also in phase III. Inspiration brought extensive hemophilia drug experience, while Ipsen brought its alliance management expertise and financial resources to ensure continued development.

…it was back to basics. SAP and IBM alliance personnel had to recommit to understanding

their partner’s value propositions.

In their financial arrangement, Ipsen licensed OBI-1 to Inspiration and invested $85 million up front

and in return got a 20 percent stake in Inspi-ration and 27.5 percent royalty on future

sales of OBI-1. If Inspiration reaches certain clinical milestone events

Ipsen would pay further mile-stones which would con-

tinue to fund the com-pany and in return

would get notes that could be

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Quarter 2, 2011 25

ASAP Hands Out Chapter AwardsMajor companies were not the only entities taking home awards at ASAP’s Global Summit. The org-anization also handed out awards recognizing the contributions its individual chapters made in 2010 to increasing membership and raising awareness of ASAP and the alliance management profession.

ASAP bestowed the Membership Award on the new Asia Collabora-tive Business Community, which was formed over a lunch meeting between ASAP leadership, prominent ASAP members, and prospective Asia members from Australia, Japan, New Zealand, and Singapore at the 2010 Summit. Through an aggressive LinkedIn campaign and a survey aimed at assessing the needs of potential members, the new ASAP com-munity cultivated heavy interest in, and attendance at, a series of webinars and two in-person skills development workshops in Singapore and Australia, respectively. In less than a year, the Asia Collaborative Business Community has grown to 230 members and represents more than a dozen countries.

Best Practices Award The California chapter was honored with the Best Practices Award for implementing its new Alliance Partner Program to create and expand relation-ships with professional organizations and educational institutions that have heavy involvement with alliance management. The chapter held joint events with the

Silicon Valley Product Management Association (SVPMA), Silicon Valley American Marketing Association (SVA-MA), and Women In Consulting (WIC) and had signed five other organizations: the East Bay Innovation Group (EBIG), Association of Strategic Planning (ASP), University of Santa Cruz Extension, Business Marketing Association (BMA), and Silicon Valley Association of Startup Entrepreneurs (SVASE).

Innovation Award With a wide geography that spans Wis-consin, Illinois, Indiana, and Ohio among other states, the Midwest chapter has always been challenged to put together events convenient and accessible for its entire member base. The chapter remedied this by coupling its Executive Breakfast and chapter meeting in Chicago on back-to-back September days so that members could more easily justify at-tendance. A “Shameless Self-Promotion”

presentation highlighted the chapter meeting. The following day 25 executives ruminated on “Collaborative Innovation for Alliances” as part of the Executive Breakfast. Both events exceeded atten-dance figures of past meetings by a wide margin, earning the Midwest chapter the Innovation Award.

Program Award The Midwest and California chapters split Program Award honors. Califor-nia’s Skills Mastery Series consisted of five webinars and three in-person events that touched on a wide variety of areas including social media, metrics and gov-ernance, partner ecosystems, collaborative innovation, joint business planning, and short-term alliances. The Midwest Chap-ter was recognized for the creation of its Minnesota Satellite Community that is now regularly drawing 30-plus attendees to its events. n

ASAP Chapter AwardsRecognizing Individual Chapters’

Contributions to Increasing Membership and Raising Awareness of Our Profession

From left to right: Russ Buchanan, CA-AM, vice president of worldwide alliances at Xerox Corporation and chairman of the board for ASAP; Phil Sack, CA-AM, (accept-ing ASAP’s Membership award), president of ASAP Asia Collaborative Business Com-munity; Art Canter, president and CEO of ASAP.

Page 26: ASAP Magazine Q2 2011

Join ASAP today to validate your specialized career skills that have become increasingly critical to the business world through our certifi cation programs and get valuable networking, professional development, research, and other resources that will help advance your career in alliance management.For more information contact: Pam GoodellDirector of [email protected] call 781-562-1630 ext. 202

960 Turnpike StreetCanton, MA 02021Tel: 781-562-1630Fax: 781-562-0354

www.strategic-alliances.org

THE ASAP ALLIANCE MANAGEMENT CERTIFICATION PROGRAM OFFERSindividuals the opportunity to demonstrate a mastery of skills in alliance management as well as in managing collaborative business relationships. Th e certifi cation is based on the alliance competencies needed to successfully manage an alliance.Th ere are two levels of certifi cation—Certifi cation of Achievement–Alliance Management,the basic level of certifi cation level of certifi cation, and Certifi ed Strategic Alliance Profession-al, the advanced level of certifi cation. Individuals who are CSAP certifi ed have demonstrated a command of the full life cycle of alliance management from inception to termination.

CONTEXT SKILLS Business skills required in alliance man-agement, not unique to the role.

Communications Skills Confl ict Resolution Negotiation Skills Financial Management Change Management Project Management Team Management Leadership Th rough

Infl uence Problem Solving and

Decision Making

CORE SKILLS Critical com-petencies specifi c to the role of alliance management.

Creating Strategic Alignment Value Proposition

Development Governance Alliance Metrics Setting Operating Principles Joint Business Planning Alliance Negotiations Organizational Alignment Relationship Management Transition Cultural Considerations

COMPANY SKILLS Knowledge elements unique to company and competitive environments.

Company Strategic Imperatives

Industry and Technical Drivers

Organizational and Functional Structure

Company Governance Company Partnering

Culture

ALLIANCEMANAGEMENTCERTIFICATION

What’s inyour future?

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Alliances 101: SAS Institute Paves

a Path to MarketA Portfolio Approach

Can Unleash the Full Potential of Partner Initiatives—Again and Again

By John W. DeWitt and Jon Lavietes

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Strategic Alliance Magazine28

COMPANIES ENTER INTO ALLIANCE relationships to realize the potential embodied by the mutual value proposition. Unleashing this potential typically involves initiatives that combine your company’s assets (e.g., intellectual property, domain expertise) with your partner’s assets into a joint off er that you take to market. Th e challenge is how to realize the potential of collaborative initiatives, consistently and repeatedly, without wasting time, energy, or money.It was this challenge that Russ Cobb, vice president of marketing and alliances for Cary, N.C.–based business analytics soft ware giant SAS, was looking to address when he began to articulate a new vision for how the company qualifi ed, prioritized, and executed initiatives

with alliance partners for co-developed and co-marketed products, collaborative solutions, and other joint go-to-market off erings. Cobb was looking to more eff ectively align alliance initiatives with the company’s marketing objectives and achieve best in class partner impact, based on IDC’s defi nition of 35 percent of company revenues associated with partners.

Achieving this level of impact meant placing bigger bets and engaging in more strategic eff orts—a challenge for SAS for several reasons, including too many ill-defi ned, ineff ective-ly governed partner initiatives within its portfolio and the lack of a cohesive framework for evaluating the trade-off s between competing opportunities. Cobb sought to instill a mind-set and roadmap that would help qualify and de-velop these alliance endeavors in a way that would put SAS and partner sales teams in the best position to execute.

Over the course of 2006 (when the vision was estab-lished) and 2007 (when the process was developed and initially rolled out), Cobb and his team set about bringing this vision to life. Th ey unveiled the result in 2008, a set of practices based on the RACI (Responsible, Accountable, Consulted, and Informed) model for del-egating roles and responsibilities called the Path to Mar-ket (PTM) initiatives.

“PTMs are our vehicle for getting to scale and proactive-ly working with partners on repeatable opportunities to maximize revenues,” said Cobb.

Imposing Order and Structure on AlliancesWhen Cobb began his mission, SAS lacked a formal and consistent approach to qualifying partner initiatives. Identifi cation and pursuit of new initiatives with either new or existing partners was done informally and tacti-cally. It wasn’t a portfolio approach.

“At that time, an overwhelming majority of revenues was very opportunistic with partners,” said Donna Peek, CSAP, global senior program manager of alliances at SAS. “Th ere were not a lot of strategic repeatable initiatives in place.”

Account executives previously engaged partners on a tac-tical, one-off basis. For example, if a SAS account execu-tive was selling SAS Marketing Automation in an account where one partner was dominant, the AE would seek to tactically engage that partner to close this one deal.

Fortunately for the alliance management team, the corporate culture at SAS provided

plenty of potential upside for the new PTM-based alliance approach.

INVESTMENT STRATEGY: HOW SAS MANAGES THE PORTFOLIO

Source: SAS Alliance | Path to Market

■ Vision established■ RACI framework

■ Stakeholder buy-in■ Quali�cation and

approval process rollout■ Inventory■ Internal training■ Compensation plan

■ Portfolio management■ Rudimentary reporting

and tracking■ Formal quarterly

reviews■ Established performance

standards■ Orion designators

2010■ ASAG announced■ Validation and launch

process rollout■ Formalized reporting■ Launch checkpoints■ Monthly “AMFM”

checkpoints

200920082007

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Quarter 2, 2011 29

“Now, specifi c partner initiatives—PTMs—are aligned with our overall SAS business objectives through a for-mal performance management process. Because of that, partner initiatives are much more likely to reach their intended scale and revenue impact,” said Cobb.

Fortunately for the alliance management team, the cor-porate culture at SAS provided plenty of potential upside for the new PTM-based alliance approach. Th e company makes a signifi cant annual investment in R&D—last year, SAS reinvested almost a quarter of its top-line revenue into R&D—so the company had no shortage of innova-tive soft ware solutions to fuel collaboration with partners. More important, it was not beholden to public sharehold-ers, putting the company in a unique position to maintain the requisite patience for fulfi lling partner program goals.

“I don’t think there’s a universally understood recog-nition of the amount of eff ort it takes to extract value from strategic alliance relationships,” said Peek. “SAS is privately held so we had the luxury of taking the long-term view and not having to make tactical tradeoff s to please investors.”

The Discomfort of ChangeHowever, those built-in advantages did not make im-plementation any easier. To make PTMs work, every department outside of alliance management—product marketing, sales, professional services, global practices, PR, and analyst relations—needed not only to be on-board philosophically, but also to adopt the everyday practices required of the PTM process.

Most importantly, of course, alliance managers had to get on board.

“Th e biggest part of the hurdle was convincing people to

change, showing them better ways to operate, and dem-onstrating that this change would allow them to be more eff ective and credible as alliance managers,” said Peek.

So, SAS used existing processes—such as the product launch process—as input for the design of the PTM process, in conjunction with an outside-in view and a lot of great thinking from a talented group of people. Th ey then used the similarities to adjust the ways that other functional groups thought about working with partners. For example, the approval/funding/performance man-agement process for PTMs fi ts perfectly with the New Off ering Council and related processes.

Peek added that she and her team can relate to a refrain touted by marketing author and public speaker Seth Godin that says, “It’s a lot easier for an organization to adopt new words than it is to actually change anything. Real change is uncomfortable.”

SAS has also found synergy with Godin regarding the approach to business development with new partners—that companies should think “process fi rst, ideas second. If you’re going to be bringing new

THE PATH TO MARKET PROCESS

Source: SAS Alliance | Path to Market

Quali�cation Customization Validation LaunchReadiness

FieldExecution

MeasureMonitor

ApprovalGates

Stakeholder Engagement

At the heart of the new SAS PTM process was a “portfolio” approach to its alliances. Alliance managers began by enlisting an executive sponsor and the sales team whenever pursuing an idea for a new partner initiative. Once their support was secured, that initiative entered the SAS PTM portfolio.

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partners and new ideas into your organization, you need a process to do it. Professionals don’t ‘know it when I see it.’ Instead professionals think about the abilities of their company and strategies necessary to bring ideas in, refine them, and launch them,” read a Godin quote Peek had circulated widely among her internal stakeholders.

Bad Produce and “Going Ugly Early”At the heart of the new SAS PTM process was a “portfo-lio” approach to its alliances. Alliance managers began by enlisting an executive sponsor and the sales team when-ever pursuing an idea for a new partner initiative. Once their support was secured, that initiative entered the SAS PTM portfolio. The next challenge was to validate the new initiative, either by securing a customer win or clos-ing a proof of concept with a customer. “That shows the PTM is ‘a dog that will hunt,’” Peek said.

Each initiative is entered into the SAS PTM Share-Point portal with metadata such as revenue, pipeline, industries, business units, solution areas, targeted ge-ographies, and other examples that can be retrieved in various forms, including PTM pipeline and rev-enue reports, as well as reports on retired initiatives,

initiative status, initiative by product area or industry, etc. The reports, which are reviewed by upper man-agement, illustrate which PTM initiatives are healthy and which are stalled.

“[There are] a number of good and valid reasons to retire initiatives,” said Peek. “PTMs are like produce, they go bad if they’re left lying around. You have to keep them moving through the process.”

The nitty-gritty execution and management of each ini-tiative in the portfolio begins with internal and partner stakeholders answering nine pages’ worth of tough and sometimes uncomfortable questions pertaining to all facets of the alliance initiative.

“What’s the market? Who is the decision maker? Who are

our competitors? What is the three-way value proposi-tion? What is our solutions profile? What kind of buy-in and traction do we have from sales? Are there IP issues or concerns? How will we deliver this? How will we sell this?” said Peek, reciting a cross-section of questions that illustrate the qualification document’s broad nature. What might seem like a laborious and tedious task from the outside—Peek refers to it as “going ugly early”—is actually appreciated both within SAS and across its partners.

“Experienced, high-performing alliance managers never complained,” said Peek. “Over time, as they started using the document, it started helping them avoid major prob-lems. Sometimes we find out [through the process] that one or both parties may be making assumptions that are not correct. Stopping something from moving forward can be just as valuable as getting everything lined up be-cause you end up not wasting nine months of effort to find out something is not going to work.”

Putting Alliances on the Path to MarketWith the initial landscaping out of the way, the PTM process goes deeper into execution mode, which pre-dictably involves the sales teams heavily as SAS and its partners march a product or service to market.

Alliance managers do most of the heavy lifting during the qualification phase. Once the PTM is in launch mode, the sales and marketing teams are heavily involved, with coordination from the alliance managers. The sales and marketing teams are charged with preparing sales decks, specific to their alliance initiatives, that provide basic selling points, competitive differentiators, breakdowns of roles and responsibilities between SAS and each re-spective partner, customer references, partners’ reputa-tion among SAS sales reps, and general messaging.

By the time the alliance team brings its product or service to market, the PTM process has put it in good position to succeed—at least that is what the numerical and anecdotal evidence suggests after two full years of practicing it.

The PTM portfolio is a dynamic one, with that number changing as PTMs are retired and new ones enter. Cur-rently, SAS counts more than 65 initiatives. Moreover, PTM initiatives drive in excess of 50 percent of partner revenues with SAS Institute’s largest alliance partners, including Teradata, Accenture and IBM. SAS employs approximately 120 alliance management professionals worldwide, roughly equal to the number of staff mem-

A solid alliance initiative will eventually flourish once customers see value and validate the

program. To earn that customer endorsement, Peek recommends narrowing in on specific customer challenges rather than pursuing

bigger-picture, global issues.

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Quarter 2, 2011 31

bers at the time of the PTM process’s inception, a testa-ment to the effectiveness of the program.

“What has grown is our capability. We are able to do more with the same amount of resources and be a lot more ef-fective. When you are qualifying initiatives in a particu-lar way, you’re engaging scarce stakeholder resources on the right opportunity. When you are not qualifying with discipline, you carry stakeholders through a bunch of initiatives that don’t necessarily work out,” said Peek.

The increased efficiency and growing top-line revenue has raised the profile of the alliance management func-tion to new heights within SAS.

“We’ve gone from chasing opportunities to driving opportunities, and that’s elevated our internal cred-ibility with SAS,” said Peek.

Openness and Forward MomentumIn addition, SAS partners are very pleased with the process, even if it is demanding at times.

“Small partners are relieved to know how to navigate SAS. Large partners are surprised to see that SAS has a process and are happy to be guided by it,” said Peek, adding that innovative SAS technology “would be noth-ing [to potential partners] if they did not have a clear, predictable way to engage with us.” Peek says it helps that SAS makes a point of being as open as possible in its dealings with partners—for example, the company shares templates, best practices, and other tactics with its partners.

Thus far in the journey, Peek says SAS has learned a few core lessons in the execution of its PTM program. Get-ting internal buy-in is a must, particularly from the sales department; the lack of a sales sponsor will put a “full stop” on an alliance initiative, she said.

Once an alliance initiative is moving, those respon-sible for its success cannot let up. Internally, SAS reminds its staff of its AMFM philosophy—“Always Maintain Forward Momentum”—because alliance projects risk retirement if they remain stalled for long periods of time. A solid alliance initiative will even-tually flourish once customers see value and validate the program. To earn that customer endorsement, Peek recommends narrowing in on specific custom-

er challenges rather than pursuing bigger-picture, global issues.

Ultimately, though, it still comes down to a staff’s execu-tion and its willingness to make the behavioral and orga-nizational changes necessary to drive alliance success.

“You don’t have to have everyone in the boat. You just need a critical mass. Get moving and the rest will follow,” advised Peek.

In order to motivate employees to willingly move out of their comfort zone, Peek recommends constantly re-minding all stakeholders what is in it for them and mak-ing their contributions tangible wherever possible. For instance, incorporating PTM tags in the SAS customer relationship management system “made it real to the alliance team,” according to Peek. Couple that with an incentive program that rewards alliance managers and business development professionals for PTM compli-ance, and suddenly SAS employees were motivated to commit to the program.

While change may be hard to elicit, SAS cannot succeed if its staff cannot continually adapt to the ever-changing core nature of each alliance.

“The secret sauce is the people and the execution and the passion,” said Peek.

If SAS and its alliances team have it their way, the com-pany will be pouring more sauce as the number of thriv-ing alliance initiatives piles up on its plate. n

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32 Strategic Alliance Magazine

Expanded, Formalized Alliance Management Practice Helps Ipsen Keep Pace with Increasing Number, Complexity of Alliances By Jon Lavietes

Uncommon wisdom?

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Quarter 2, 2011 33

“DON’T MESS WITH SUCCESS.” “If it ain’t broke, don’t fi x it.” On the surface, it might seem that the $1.6 billion pharmaceutical company Ipsen was going against these clichés when it decided to reorganize its alliance management duties in 2008. Th e company had a successful alliance portfolio replete with happy two-decades-old partners, a deep commitment to its alliance function from its C-level executives, and the resources of its Corporate Business Development practice dedicated to seeing alliances to fruition. In reality, Ipsen was illustrating another old axiom when it decided to make new hires and drastically reshape the way it went about managing alliances: businesses must adapt.

Expanded, Formalized Alliance Management Practice Helps Ipsen Keep Pace with Increasing Number, Complexity of Alliances By Jon Lavietes

Th e 2008 restructuring was the culmination of a com-pany transformation that had been taking place over the course of the decade. In 2001, a family-owned business transitioned to newly hired professional management whose goal was to transform a primary care product-oriented company that sold mostly to the France mar-ketplace into a company with a more diversifi ed product portfolio complemented by specialty care off erings oper-ating in a more global arena.

“If you play cards with yourself, you get bored very quick-ly. Th ose sets of cards, if you could play them with other people, there’s a lot of opportunities for modifying your portfolio of products,” said Christophe Jean, COO at Ipsen. “We saw within partnering the necessity and the opportunity to reshuffl e the cards we were given, which fortunately [Ipsen] had many cards to play to serve this [new specialty care] strategy.”

Getting Down to Operational BasicsIn 2005, Ipsen went public. Th ree years later, the more heavily R&D-focused company depended increasingly on alliances for innovation and was now utilizing them for commercialization purposes. Ipsen’s alliance portfolio had grown in number and complexity to the point where for the fi rst time in its history it needed a formal alliance management function.

“Ipsen needed a consolidated approach to managing al-liances—operational basics needed to be agreed [upon],” said Sean McKercher, senior vice president of corporate business development at Ipsen.

Th e company established its new Alliance Management practice with three full-time dedicated alliance directors. It instituted a common set of tools and methodologies that could be applied across all of its alliances, which were eventually captured in a 90-page alliance management guidebook in 2010 that spells out standards and provides tools for governance, internal alignment, communica-tion, strategic oversight, and contract maintenance.

To ensure that alliances were integrated with the company and aligned with its goals, alliance management profes-sionals became part of Ipsen’s cross-functional Portfolio Management Teams (PMT), which consisted of repre-sentatives from several parts of the company, including among others Legal, Finance, Regulatory Aff airs, and Drug Development. PMTs became vital for basic com-munication with the rest of the company—“we only have

to make one person aware [of critical issues pertaining to an alliance], not a whole department,” said McKercher—but more important, they also shouldered much higher-level responsibilities within the company, giving alliance management an active voice in setting Ipsen’s direction.

“Th ey set Ipsen’s [long-term] strategy in [each] therapeu-tic area. Our alliance managers are core members of the PMTs creating [that] strategy,” said McKercher.

Integrating Alliance Management Across the OrganizationOf course, the true challenge of integrating Alliance Manage-ment into the rest of the organization was fi guring out how to balance alliance activities across alliance management and nonalliance personnel. As is the case with most pharmaceu-tical companies, Ipsen needed employees from other depart-ments to help shoulder critical responsibilities of the alliances in their portfolio (see BioPharma Study article, p. 38).

Fortunately, the company only had to evolve its existing op-erations somewhat to achieve this objective. Prior to 2008, Ipsen’s alliances were the responsibility of its Corporate

Uncommon wisdom?

The alliance manager has to rely on his or her relationships and knowledge of the alliance partner’s business to understand how changes in their operations will aff ect its own bottom line.

STRATEGIC ALLIANCE MAGAZINE | SPECIAL FOCUS | BIOPHARMA

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Business Development department. The head of Cor-porate Business Development would select a cross-func-tional team similar to the PMTs filled with employees with the right competencies for the particular situation and the personnel “close to the people you were dealing with [in each alliance], [whether] that’s research, mar-keting, or development,” according to Jean, who added that this selection process was performed on “an ad hoc basis” from alliance to alliance.

Now, Alliance Management and Business Development were placed side-by-side to manage alliances together while being overseen formally by Corporate Business De-velopment. In fact, by McKercher’s estimates, the Alliance Management group manages approximately 20 of Ipsen’s 50 alliances, while Business Development actually handles a majority “on a contract management basis.” When Ipsen forms an alliance with a new partner, it is Business Develop-ment that takes the lead in negotiations. In addition to day-to-day management, alliance managers “take responsibility for ‘post-contract negotiations’— if there is a new or revised agreement with an existing partner,” says McKercher, add-ing that he or another business development professional from the department might occasionally be called upon for especially contentious negotiations with existing partners.

“We do this as we do not want the alliance managers to lose the healthy relationship that they have established,” he said.

A Slow and Steady StartWith Alliance Management’s place within Corporate Business Development defined and formal tools, prac-tices, governance procedures, and rules of engagement established, Ipsen was ready to advance its alliances to another level. However, even with the right people and spirit behind the program, progress was slow but steady in its first year.

“We advanced our relationships but not so much the process, the discipline, and the structure of alliance man-agement,” said McKercher.

While the global economy slumped in 2009 and 2010, it did not stall the progress of Ipsen’s revamped alliance management practice. The company maintained a firm handle on its growing alliance portfolio, which had

signed more than 40 major partnerships over the course of the last decade to accomplish a variety of preclinical, clinical, regulatory, and commercialization objectives. In the past year and a half, Ipsen’s alliance program moved three drugs to market—antiwrinkle skin products Dys-port and Azzalure (which were brought to the commer-cial stage with partners Medicis and Galderma, respec-tively) and gout remedy Adenuric (Menarini). Six other drugs have either been moved to or through phase III.

Although the reorganization of the Alliance Manage-ment function has been critical to Ipsen’s partnership success, people within the company also credit its lead-ership’s longstanding respect and commitment to the discipline for assisting the program’s development.

“My experience in the past is there’s usually a champion or two in an organization, but it’s unusual that our whole management team participates in the process and be-lieves in what we do,” said Brooke Paige, senior director of U.S. alliances at Ipsen. “It’s really an incredible oppor-tunity to have such commitment, not to have to sell the profession of alliance management.”

“It’s a broad executive commitment as well,” added McKercher. “I’ve seen [the commitment to alliance management in other companies] from commercial operations, for instance—that’s a no-brainer. Here, we have it across the board.”

For example, Ipsen’s Finance department issues quar-terly reports on the performance of critical alliances and recently reorganized to more directly look after the larg-est collaborations in Ipsen’s alliance portfolio.

…the company not only staffs up its Alliance Management department, but does

so with extreme care given the importance of alliances to the company’s success.

STRATEGIC ALLIANCE MAGAZINE | SPECIAL FOCUS | BIOPHARMA

Sean McKercher, senior vice president of corporate business development at Ipsen.

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Quarter 2, 2011 35

“We have found that more places are doing this with Finance. It’s becoming a trend for companies to have financial professionals specializing in accounting for alliances,” said Jan Twombly, CSAP, president of The Rhythm of Business, who has consulted with Ipsen on its alliance practice for more than two years. “We’re seeing P&Ls created for individual alliances more often now.”

More Resources, More RecognitionThe significant resources dedicated to Alliance Manage-ment illustrate this executive commitment. Ipsen’s lead-ership has made sure that the company not only staffs up its Alliance Management department, but does so with extreme care given the importance of alliances to the company’s success.

“There’s not only this recognition, there’s this en-couragement that these are important positions and, boy, you better have the right people in them as op-posed to ‘well, this is just a relationship manager, what’s the big deal?’ There’s that real emphasis across the organization—recognition that these are busi-ness positions,” said McKercher.

It also means greater access to key executives. Ipsen’s alliance professionals and their counterparts at partner companies have “exposure directly to the CEO and our executive committee,” according to McKercher.

Another key to Ipsen’s success is a humility that under-lies its alliance strategy. McKercher is adamant that Ipsen abstains from “the not-invented-here” arrogance.

“We also don’t have the attitude that we’re the only ones who know how to make this work,” he adds. “If we have something but we don’t think we have the people to maximize it, we’ll partner it out and vice versa.”

Ipsen currently has a dozen in-licensing and half-dozen out-licensing agreements.

Alliances are contributing 40 percent of Ipsen’s revenues today, and analysts are scrutinizing their performance more closely than ever. The company knows there is no going back.

“As soon as alliances are a sizeable portion of your busi-ness, you simply cannot ignore it,” said Jean. “Alliance management is no longer a technical aspect of business. It’s not only a method to manage certain relationships, it becomes basically your business.”

However, Twombly says alliance managers should not wait for analyst scrutiny to start paying attention to part-ners’ financials.

“There is a greater onus on the alliance manager to mon-itor financial performance before the partner is required to report. The alliance manager has to rely on his or her relationships and knowledge of the alliance partner’s business to understand how changes in their operations will affect its own bottom line.”

Alliance Management by the BookTo keep pace, Ipsen has moved into the next phase of its alliance management practice’s development. Its internal Project IMPACT (Implementing Management Prac-tices for Alliances and Collaborations) initiative aims to educate the rest of the company on the role Alliance Management plays and what it can do for other depart-ments, instill collaboration skills within other employees who engage partners, such as researchers and product managers, advance governance procedures, and tighten up consistency of Ipsen’s approach across alliances.

To these ends, Ipsen’s alliance guidebook remains key. The Alliance Management group has augmented it on an ongoing basis since it was first published and in 2011 it plans on adding a number of tools, including its new partnership planning procedures. In addition, Ipsen is assembling shorter customized versions for other de-partments that outline the alliance management prac-tice’s core principles. One adaptation is serving as the foundation for a webinar series designed for Ipsen’s Global Regulatory Affairs group.

Meanwhile, as partners become more integral to Ipsen’s day-to-day affairs, they will increasingly need access to Ipsen’s senior management, placing a greater premium on streamlined governance procedures.

“[We have] to control our partners’ access to our execu-tives; otherwise they skip over lines of communications. That’s where good governance comes in, and we have some good governance systems set up,” said McKercher.

Ipsen will have to continually evolve and enhance its al-liance management function as partnership success is ultimately the only way the relatively small (by pharma-ceutical company standards) $1.6 billion company can successfully compete with the giants in its field.

“The issue is we’re not a big company, so you don’t have thousands of people to refer to,” said Jean. “When [alli-ances] start to become more numerous and also more complex, then you’re probably well advised to at least have the commonality of methodology and other tools to manage that.” n

STRATEGIC ALLIANCE MAGAZINE | SPECIAL FOCUS | BIOPHARMA

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Guiding Alliances Through Biopharma

Consolidations

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Quarter 2, 2011 37

“It is only natural to question how an impending merger or acquisition will impact an alliance,” said Brian Daly, head of global human health alliance management at Merck in Whitehouse Station, N.J. “Th at sense of uncer-tainty can lead to anxiety.”

Speculation ultimately will lead to questions about what the acquiring company’s plans are for the acquired company’s alliances, whether the two companies have similar or com-plementary alliance programs, and how much more or less advanced one alliance program is than the other.

Th is “stub period,” the time between the announcement of intent and the actual closing of the deal, may sound daunt-ing, but it doesn’t have to be, according to Steve Twait, CSAP, director of alliance management and M&A integra-tion at Indianapolis-based Eli Lilly and Company.

“It provides a nice opportunity for us to work internally to learn as much as possible about the partnerships of the company we’re acquiring. Th e deal process [helps] us to become familiar with who the players [are] and understand a bit about the products and history and decisions and the market.”

Know Your ContractEven before an acquisition is on the table, alliance man-agement teams need to review the contract language of the alliance to assess what rights each company has and how they could be impacted by the changes that come with a transaction.

“Each alliance manager should know what the contract says and beyond the contract think proactively about what should happen if our partner goes through a change,” said Daly.

Begin Dialogue Although a lot of information is confi dential during a merg-er or acquisition, there are still avenues for the acquirer, ac-quired, and third-party partners to have initial discussions and obtain some preliminary information about the poten-tial role the new alliance can play in the newly combined company. Th e amount of information that can be unearthed varies with each transaction, but it’s still important for these discussions to take place.

“We understand a lot is confi dential, but we still ask the partner keep the lines of communication open through-out the process so that we can determine if the collabora-tion is going to survive” when a partner is going through an M&A, said Daly. “Where does the collaboration fi t in the merged company’s ecosystem?” He added that these conversations are equally critical for the acquirer if they want to get off on the right foot. “If you don’t provide information when you can, people start to worry.”

Meanwhile, the door also has to be left ajar to partners of the two companies in the transaction.

“It was fair for other companies to ask us about the impact on our partnerships—to have the right people on the phone, think it through together, being prepared, having underly-ing knowledge,” said Daly, referring to Merck’s partners that were aff ected when it was announced Merck was merging with Schering Plough.

Identify Potential Alliance Champions Who you get on the phone is just as important as the conversation itself.

Continued on page 46

WHEN COMPANIES ACQUIRE OR MERGE, alliances on both sides of the trans-action are inevitably aff ected. Moreover, in the biopharma space, acquisitions usually involve at least one public company, legally imposing a gap of 30 to 90 days between announcement and completed transaction. Th is quiet period can trigger concern and restlessness, leaving alliance personnel feeling in limbo.

Mergers and Acquisitions Pose Critical Challenges—but Good Alliance Programs Already Have the Skills and

Processes Needed to Cope with Change

By John DeWitt and Jon Lavietes

STRATEGIC ALLIANCE MAGAZINE | SPECIAL FOCUS | BIOPHARMA

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Strategic Alliance Magazine38

Titled The Practice of Alliance Management in the Bio-pharmaceutical Industry, this study, conducted by The Rhythm of Business, surveys Association of Strategic

Alliance Professionals members from 47 companies headquartered in North America, Europe, and Asia. According to the survey results, alliance management teams are seeing more alliances added to their plate, yet

the size of these teams generally remains fewer than five people. Alliance managers, who according to the re-search commonly service two to three alliances at any given time, end up relinquishing or ignoring specific responsibilities on existing alliances, delegating tasks to project managers and other non-alliance personnel, or neglecting alliances that are viewed as basic to manage or less essential to the company.

“[Alliance management] has to get creative about how to innovate itself and take charge of realigning the re-sources available to manage alliances and collabora-tions,” said Jeff Shuman, CSAP and principal at The Rhythm of Business.

One trend is that companies are almost unanimously placing significant alliance management responsibilities in the hands of functional managers—so teaching these

ALLIANCE MANAGERS AND THEIR TEAMS in the biopharmaceutical in-dustry are being charged with seeing an increasing number of alliances to fruition. However, the powers-that-be behind this additional responsibility are not keeping pace supplying extra resources for the increased workload. According to a new study, how well alliance teams manage this quandary will determine not only the success of the alliance management program, but also whether or not alliance teams receive the recognition from upper management they may deserve.

Biopharma SurveyAlliance Teams’

Influence Depends on Success in

Handling Increasing Responsibilities

By Jon Lavietes

Throughout the first half-decade of the average alliance group’s tenure, the alliance team

sees its responsibilities grow steadily to a point where it has to make decisions on

which tasks to relinquish.

STRATEGIC ALLIANCE MAGAZINE | SPECIAL FOCUS | BIOPHARMA

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Quarter 2, 2011 39

According to the survey authors, the three-year mark of this fi ve-year curve is a critical time in heading off potential pitfalls.

employees alliance skills becomes part of the alliance manager’s job.

To understand how alliance teams have arrived at this juncture, Th e Rhythm of Business says it is imperative to see the arc of an alliance team’s responsibilities over a fi ve-year period. Th roughout the fi rst half-decade of the average alliance group’s tenure, the alliance team sees its responsibilities grow steadily to a point where it has to make decisions on which tasks to relinquish. Alliance managers, according to the survey, most oft en surrender planning and evaluation.

Th e consequences? An increasingly complex portfolio may begin to underperform due to an ineff ective allo-cation of limited resources. Additionally, the value seen from alliance management may be diminished when these key tasks are not executed.

According to the survey authors, the three-year mark of this fi ve-year curve is a critical time in heading off poten-tial pratfalls. By then, the team should not only have an established approach to alliance management, it should educate supporting functions and high-level executives on what roles they do, and do not, perform as well as the value alliance management brings to the company. With this foundation, alliance teams can defi ne the types of collaboration required for each alliance and allocate resources eff ectively as responsibilities evolve over the next two years.

“If the alliance management capability is diversifi ed with appropriately trained non-alliance personnel it will en-able all parties to eff ectively manage an ever-changing alliance portfolio and increase the likelihood the portfo-lio achieves its objectives,” said Shuman.

More successful alliance management will help alliance managers accomplish bigger career goals. Where a ma-jority of respondents say corporate management sees them as essential to achieving corporate strategy, and 68 percent say they have greater sway in their companies’ direction, two-thirds are unhappy with the current in-fl uence.

However, in a classic chicken-and-egg situation, to gain more recognition and resources, alliance teams will have to maintain performance in the face of increasing re-sponsibility and portfolio complexity.

More information on Th e Practice of Alliance Manage-ment in the Biopharmaceutical Industry study can be found at http://www.rhythmofb usiness.com/uploaddir/02aedc27AllianceManagementinBiopharma.pdf.

STRATEGIC ALLIANCE MAGAZINE | SPECIAL FOCUS | BIOPHARMA

100%

80%

60%

40%

20%

0%Essential to achieving

corporate strategyImportant tactical

team membersLess than 3 years 3 to 5 years More than 5 years

Don’t knowwho AM is

Expendable function

CEOs’ Perceptions of Alliance Management

Perc

ent o

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pond

ents

100%

80%

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in�uenceMaintaining

in�uenceLess than 3 years 3 to 5 years More than 5 years

Dissatis�edwith in�uence

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Alliance Management InfluencePe

rcen

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ts

100%

80%

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Number of Alliances per Alliance Manager

Perc

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One to three Three to �ve More than �ve

Page 40: ASAP Magazine Q2 2011

Realizing Value Through Effective Alliance Management

May 31- June 1 June 1-2 at the Radisson Blu in at the Heldrich Hotel in Basel, Switzerland New Brunswick, New Jersey

The 2011 ASAP BioPharma

Conferences

Engage in thought-provoking discussions with like-minded professionals from around the globe. Topics will include:

n Roles and responsibilities when managing an alliance is only part of the job;

n Starting a function from scratch;

n The start-up process: The first 100 days;

n Alliance management excellence without an alliance management function;

n Capturing value with a balanced scorecard.

ASAP is the only professional organiza-tion dedicated to the profession of alliance management. Our conferences, planned by alliance experts and practitio-ners, are tremendous opportunities to share and leverage the deep experience of a peer group of alliance professionals and make valuable connections with people represent-ing companies from around the globe.

Take a step towards earning the profession’s only certification and show you are adapting to the reality of the new biopharmaceutical business models. ASAP is the only organization to offer alliance management professional certifications!

960 Turnpike St, Canton MA 02021 USA

Tel: 781-562-1630strategic-alliances.org

[email protected]

Why should you attend? Join fellow members and other pharma alliance professionals in an immersion into the skills, techniques, and practices that will prepare you and your organization to adapt to and master biopharma’s new realities.

Page 41: ASAP Magazine Q2 2011

Quarter 2, 2011 41

APP Creates Partner Plan RoadmapAlliancesphere’s Alliance Partner Plan-ning (APP) helps companies develop a vision of the working relationship be-tween a company and its partners and define the expectations of the partner-ship across all parties. Alliancesphere helps clients create a detailed master alliance plan defining the fundamental value, strategy, solutions, and readiness for the alliance and outlining the gover-nance and measurement necessary for supporting it.

Atlanta-based Alliancesphere addresses three subject areas with its clients as part of APP: (1) the fundamentals for building and maintaining successful alliance relationships; (2) success strate-gies for an individual alliance partner; and (3) the creation of an alliance team’s written Alliance Partner Plan with focused initiatives to guide construction of a jointly agreed set of directives with a given partner.

For more information, please visit http://www.alliancesphere.com/solutions/plan-ning.asp.

PRS Enables Companies to Pre-Assess Ability to PartnerAnn Arbor, Mich.–based Allinnova is a company that helps organizations achieve competitive position, growth, and innovation through the use of alli-ances. It offers a service that measures the organization’s capability to engage in

single partnerships or more expansive partner ecosystems. Its flagship product, the Partner Readiness Score (PRS), combines the company’s alignment gap analysis and optimization process. Cus-tomization to the unique situations of their customers, partners, and industry norms is available.

PRS is derived from accepted industry best practices, the alliance experience of its key executives and other industry practitioners, and the latest academic research related to alliances. The inde-pendently managed instrument consists of an online component comprising processes and scales to weight relative importance of practices within compa-nies, representing real-world practices and evaluation methods.

Companies are applying the gap analy-sis to help assess the competencies of personnel involved in alliance activity and determine whether additional training is needed, to identify risk areas due to poor alignment between part-ners, and evaluate potential partners on their partnering competency, in order to develop and maintain a high-value, sustainable alliance.

For more information, visit http://www.allinnova.com/joomla/product-menu.

RGlobe Delivers Private Social Networking for PartneringFor individuals and companies tired of dealing with the heavy administra-tive burdens of mapping, tracking, and

inefficiently communicating with the ever-changing contacts across a network of partners, a new app works to mitigate this problem and helps forge strong, trusting, relevant relationships while en-gaging in constructive, targeted dialogue that leads to more joint business.

San Francisco–based RGlobe helps companies and individuals optimize their revenue-driving ability to engage in smarter collaborative selling and prospecting by enabling them to easily and efficiently connect, communicate, and collaborate with partners.

Utilizing many of the features common in today’s most popular social networks, RGlobe’s free and private collaborative selling networks enable revenue-driving business professionals to collaborate internally and privately across indi-vidual partners to leverage one another’s knowledge and connections on mu-tual accounts and managed partners. RGlobe automates, streamlines, and secures many of the inefficient manual processes and security-risk activities in use at most companies today.

More information can be found at: www.rglobe.com.

Solutions Marketplace

Selected Products and Services for and from Strategic Alliance Professionals

Companies are applying the gap analysis to help assess the competencies of personnel involved in alliance activity

The 2011 ASAP BioPharma

Conferences

Page 42: ASAP Magazine Q2 2011

Strategic Alliance Magazine42

When managing alliances, most companies focus initially on contracts, structure, and

processed resources, not people, but that is beginning to change.

Page 43: ASAP Magazine Q2 2011

43Quarter 2, 2011

A CRAZY THING HAPPENED over the last 10 years: the revenues

of pharmaceutical and biotechnology companies derived from alli-

ances and collaborations zoomed to over 33 percent, according to

some sources, while the number of collaborations grew by 25 percent

per year. It’s only a matter of time before more than 50 percent of all

revenue will be tied to collaborations.

The Human Factor: a Key Determinant of

Alliance SuccessThe Neglected Role

of Behavioral DynamicsBy Curtis R. Sprouse

Page 44: ASAP Magazine Q2 2011

Strategic Alliance Magazine44

Yet our research shows that some industry experts believe 90 percent of all alliances suffer inefficiencies, cost over-runs, and time delays resulting in an inability to reach clinical or economic potential—a sobering statistic.

The cause of most of these failures? Behavioral dynam-ics. Also known as “the human factor.”

Why Alliances FailA 2010 study of 223 pharmaceutical directors, managers, vice presidents, and CEOs conducted by EurekaConnect found that leaders in alliance management have been focusing primarily on:1) Contract structure, 2) Governance, 3) Conflict resolu-tion, and 4) Process“Going from an integrated business model to a collab-orative one—which is the new norm with most compa-nies’ pipelines and more and more marketed products springing off or relying on alliances—is proving chal-lenging across the industry,” says Xavier Avat, director of alliance management at Gilead. “Business processes have to adjust and sometimes lag the changes required by the collaborative model.”

In addition to the business process is the human fac-tor. Avat says that in his previous roles he has seen “promising alliances with large investments struggling unnecessarily because of poor behaviors or dysfunc-tional leadership.”

When the Stars AlignConversely, difficult products coming late to competitive markets have sometimes done better than anticipated, which Avat credits to outstanding collaborative efforts.

“Outside of technical and clinical outcomes, the difference between success and failure of an alliance often relies on a couple of senior-level individuals setting the example and influencing the teams. Having these star leaders on an alliance is a key factor of success,” Avat says.

Kimberly Brue, CSAP, director of alliance management for the Prospective and Strategic Initiatives division at Sanofi-Aventis, agrees.

“While the relationship is often cited as the cause of delays and technical failures (much of this relates to the behaviors of individuals), companies have put very little focus, thought, or effort into addressing this major de-terminant of successful product development,” she says. “At Sanofi-Aventis, we see this as a major opportunity to immediately impact alliances and dramatically affect project initiatives through better understanding, train-ing, and alignment of our team and our partner’s team.”

Many alliance groups focus on identifying measures that satisfy financial models and measure task completion but often fail to assess the human capital that can make or break a new product.

“Most alliance managers, scientists, clinicians, and business personnel involved in alliance management have little knowledge of the tools that are used to ana-lyze behavioral dynamics,” says Mike Leonetti, CSAP, executive director for HealthCare Partnerships at Boehringer Ingelheim and former ASAP chairman and Biopharma Council chair. “Most are not trained to ad-dress behavioral issues. While many HR departments are technically skilled in addressing behavioral issues and career development, the unique dynamic that ex-ists with collaborations and alliances typically limits internal efforts to interaction with a partner’s team.”

The bad news: according to a study in the Harvard Business Review by Jonathan Hughes and Jeff Weiss, 60 to 70 percent of these alliances fail (“Simple Rules for Making Alliances Work,” November 2007). Of the pharmaceutical and biotechnology companies that once focused ex-clusively on their own research and development, BusinessWeek Research Services says 75 percent now rely on partnership efforts to develop new products. Furthermore, there is an ever-expanding effort to identify, develop, manage, and commercialize third-party science while leveraging partnerships for all key operational business functions.

Companies must gain better insight into the behavioral strengths and weaknesses of each team

member. From small academic to large clinical- and-commercial alliance initiatives, behavioral

factors have a significant negative effect. This issue can be rectified quickly

and inexpensively.

Page 45: ASAP Magazine Q2 2011

Quarter 2, 2011 45

The Human Factor: Behavioral Dynamics There are proven tools and models for identifying and resolving most behavioral issues that impede efficient, effective teamwork. Why are these tools not implement-ed? Why are companies not benchmarking optimal performances by discipline and addressing the factors costing the industry billions of dollars and limiting the availability of important therapies?

When managing alliances, most companies focus ini-tially on contracts, structure, and processed resources, not people, but that is beginning to change.

“We are just beginning to develop industry standards and best practices. I believe that Merck Vaccines and other companies are now taking steps to address behavioral dynamics in a more systematic and objective manner,” says Michael Pergine, senior director of alliance strategy and commercialization for Merck Vaccines.

Pharmaceutical and biotechnology companies can quickly adopt proven tools and strategies to assess and measurably improve team performance. Adoption of behavioral dynamics best practices in particular can boost alliance efficiency and success from preclinical to commercial stage.

“Behavioral dynamics assessments are a strategic tool to quantify the relationship at the joint team level, leverag-ing strengths and correcting weaknesses to maximize alliance progress by creating a high-performing joint team,” Pergine says.

Implementation of these strategies allows companies to better align teams, assign responsibilities, and manage col-laborations more effectively. Companies that incorporate behavioral dynamics into alliance management optimize governance, process, and structure, creating strong teams that accomplish goals on time and within budget.

Looking AheadAccording to Seeking Alpha, nine of the top 13 pharma-ceutical companies will see 17 major products lose pat-ent protection by 2012, and the loss of major products will reduce the $112 billion R&D spending of the top 50 companies by some accounts. The economics and timelines associated with current R&D approaches are not yielding the number of products necessary to sus-tain current revenue and profit levels. By some accounts, market consolidation combined with patent expirations will force companies to introduce one new U.S. product yielding $400 million a year in revenue for every 1 per-cent market share to maintain existing market position.

Reduction in R&D spending will decrease the number of scientists working to cure diseases, as evidenced by the large layoffs in 2009 and 2010 at major companies such as Pfizer and Merck.

The Four Requirements for SuccessExecutive management must acknowledge the impor-tance of alliance management to the pharmaceutical and biotechnology business model.

Companies must clearly define alliance management. Currently, companies often mix project management and alliance management. Unlike project management, which focuses on the discipline of planning, organizing, and managing resources to ensure successful comple-tion of a project, alliance management focuses on:

Contract structure—aligning objectives and resources to achieve a well-defined, jointly shared objective.

Material conflict resolution. Good structure, clear objec-tives, and appropriately skilled personnel will eliminate costly inefficiencies that plague alliances.

Companies must extend benchmarking and personal assessments to identify and develop the correct skills for each key functional area of an alliance. People in key roles, particularly scientific and clinical, need to develop interpersonal and collaboration skills to improve effi-ciency, effectiveness, and success.

Companies must gain better insight into the behavioral strengths and weaknesses of each team member. From small academic to large clinical-and-commercial alliance initiatives, behavioral factors have a significant negative ef-fect. This issue can be rectified quickly and inexpensively.

The tools and knowledge are available. The time is now. The industry can experience significant gains by defining and aligning skills of people they employ and collaborate with. This approach will be an important factor in advanc-ing science and increasing efficiency and revenue.

Curtis R. Sprouse is president of Boston Market Strategies, Inc., and EurekaConnect, LLC.

Page 46: ASAP Magazine Q2 2011

Strategic Alliance Magazine46

Continued from page 37“From the very beginning, identify who within the ac-quiring company will be the sponsor or champion of the alliance,” said Twait. “Identify those [executives] dur-ing the due diligence phase.”

If the alliance management team has successfully iden-tified the right alliance champions, these executives should be involved long after the initial transition and throughout the governance of the alliance.

Accelerate Talks After the Deal’s Completion Once the transaction goes through, the dialogue must pick up the pace immediately, with all levels of executives from the acquiring company calling their counterparts in their new partner—from the CEO to high-ranking senior management officials to alliance managers.

“It can be very comforting to the partner when you speak. ‘Here’s the news coming out, here’s what we see the impact is on the collaboration, do you have any questions or concerns based on this new news.’ Partners hate to be blindsided,” said Christine Carberry, CSAP, former vice president of program and alliance management at Weston, Mass.–based Biogen Idec, who also was involved in the merger of Biogen with Idec.

“Make sure they know it’s not a secret program, it’s a col-laborative program. Surface what the concerns are of the new partner. Make sure our new partner understands how focused we are in making sure the alliance is going to work even in light of the change,” said Daly.

Apply Core Alliance Management Skills to Weather Change Of course, if the two companies utilize alliance manage-ment best practices, they probably already have the skills to create an open environment in which alliance profes-sionals can build trust. In fact, Twait feels an acquisition is not that much different from some of the changes your average alliance encounters throughout its lifecycle. Of-ten, biopharma companies need to relaunch or restart an alliance when a drug reaches the next stage or when

key personnel leave to pursue other opportunities. Lilly utilized these skills of openness after it had acquired Im-Clone to maintain the latter’s fruitful partnership with Bristol-Myers Squibb.

“We brought ImClone folks working on the team, Bristol folks, and Lilly folks all together,” Twait explained. “We utilized our alliance management start-up process to get Lilly’s expectations on the table as well as Bristol’s. This allows you to make sure expectations are shared, think about goal setting and where we want the alliance to go.”

Besides, biopharma alliances often have to last a decade or more, so pharmaceutical and biotech companies are used to dramatic change over the course of alliance agreements. Carberry feels with the right attitude, alli-ance professionals are just the people to handle the flux that comes with an acquisition.

“Embrace being on a continuum and take a longer-term perspective on the relationship. Recognize you created the relationship thinking you were better off creating this relationship than not—some capability or capacity, a product, whatever it is—and you both feel there’s more value that can be created together.”

Acknowledge When an Alliance Cannot Survive the TransactionOf course, there are going to be times when moving the alliance forward is not the best option for one or more partners.

“One thing I think biopharmaceutical companies are not particularly good at doing is thinking about exit strategies,” said Carberry.

Nevertheless, the end could come immediately if the acquiring company already has a better version of the capability or product being handled by the acquired company’s alliance.

“The reason we’re collaborating is to stay focused in this disease area together. If you no longer feel that you can do that—that’s tough but it’s fair—what we need to do is figure out how to unwind the collaboration in a way that works for both sides,” said Daly.

In the end, consolidations are just another external force alliance managers need to deal with. The good news is that they already should have the requisite capabilities to take control of the situation. n

…with the right attitude, alliance professionals are just the people to handle the flux that

comes with an acquisition.

Page 47: ASAP Magazine Q2 2011

Advance Your Career

w w w. p h o e n i x c g . c o m 1 8 8 8 8 4 8 9 5 1 4

Collaborative Skills Mastery & Collaborative Innovation Workshops In partnership with the ASAP Asian Collaborative Business CommunityMumbai, India June 29-30, 2011 Sydney, Australia July 11-12, 2011Singapore July 6-7, 2011 Auckland, New Zealand July 14-15, 2011

Additional workshops in Europe and the US London, UK May 25, 2011 Amsterdam, NL July 6, 2011 & September 11Mountain View, CA September 20, 2011 Washington, D.C. October 13, 2011

For other workshop locations and dates, visit www.phoenixcg.com/events.

Don’t miss the chance to hone your skills and stay atop the ever-changing dynamics of business collaboration. Phoenix Consulting Group’s Collaborative Skills Mastery and Alliance Best Prac-tices Workshop is headed your way—to prepare you to take that next step in your professional development.

In the coming months, these workshops will travel the world to California; Mumbai, India; Sydney, Australia; Singapore; Auckland, New Zealand; London, UK; Amsterdam, NL; and Washington, D.C. Our courses utilize a skills inventory, tools, templates, refer-ences, real-world scenario role-playing, and practice exams to help you define and enhance your core alliance management knowledge.

At Phoenix Consulting Group’s Collaborative Skills Mastery workshops you will: •Inventoryskillsandidentifygaps•Reviewacommonvocabularyforalliancemanagementpractices•Exercisetheapplicationofskillsandknowledgeofallianceandpartnermanagement•Participateinsimulatedcollaborativescenariosandteamproblem-solvingexercises•Learntoapplytools,frameworks,andbestpractices•PrepareforASAP’sCA-AMorCSAPexam

For more advanced skills development, we offer a complete curriculum of alliance life-cycle workshop modules that delve deep on a single subject such as Alliance Strategy, Value Creation, Governance, Metrics and many more.

Decades of alliance management experience have honed Phoenix Consulting Group’s alliance management workshops. We’ve trained thousands of alliance management professionals, from over 60 companies and five continents. Courses are taught by CSAP-certified instructors who have advised and driven multi-million-dollar partner-ships for companies of all sizes across a variety of industries.

Leverage our wealth of real-world experience to develop your alliance management skills and advance your career. Join us at the next workshop in your part of the world. For more information, including comprehensive descriptions of upcoming courses and our other educational offerings, please visit www.phoenixcg.com or e-mail us at [email protected].

Phoenix Consulting Group Brings Alliance Skills Mastery Workshops to a Location Near You

Page 48: ASAP Magazine Q2 2011

...this time,what happens in Vegas

gets spread ’round the world.

Sorry, no secrets...

✓ Attend informative seminars and expert panels✓ Get group and one-on-one training and coaching✓ Take the CSAP Certification Exams✓ Hear keynotes by alliance management’s

leading experts and practitioners✓ Network with colleagues – renew longstanding relationships and make

new connections, in your industry, across industries and sectors, with peers from every corner of the globe

✓ Recognize and honor the profession’s greatest achievements at the Alliance Excellence Awards Banquet

✓ And yes, it’s Las Vegas, so having fun is not optional – even if your idea of fun is debating alliance governance strategies over a cup of double espresso.

Don’t gamble with your professional development. Mark your calendar today for the ASAP Global Summit, March 5-8, 2012 in Las Vegas, Nevada.

960 Turnpike St, Canton MA 02021 USA

Tel: 781-562-1630strategic-alliances.org

[email protected]

Mark Your Calendar – You Will Not Want to Miss the

2012 ASAP Global SummitMastering the Art and Science of Alliance

March 5-8, 2012 – Caesars Palace, Las Vegas, Nevada


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