FIGURE 1: ALLIANCE MANAGEMENT CONTINUUM OF SERVICES STRATEGIC INFLUENCE ■ 3-D Fit ■ Due Diligence ■ Contract Review ■ Strategic Futures ■ Governance Development ■ Create/Facilitate Training ■ Establish Capability Model ■ M&A Integration Capability Development ■ Communicate OAM Capabilities to Potential Partners ■ Inform New Policies ■ Advise Senior Leadership on Partnering Strategy
OPERATIONAL ADMIN ■ Align Partners Measures (Scorecard) ■ Create Onboarding Documents ■ M&A Integration Planning ■ Monitor Business Process/Contract Obligations; Manage Milestone/Royalities ■ RACI Development ■ Identify Talent Selection
EXECUTION Governance Implementation: Agenda Development – Action Resolution ■ Alliance Kick-off ■ Alliance Shutdown ■ Lead Alignment on Contract/ Decision (Global) ■ Lead Joint Solutions (PR, SEC, etc.) ■ M&A Integration Execution (Day1-90) ■ Manage IntraIntercompany Alignment ■ Conduct VOA™ ■ Facilitate Portfolio Trade-off Decisions ■
R I S K M I T I G AT I O N
SIGNIFICANT PROBLEM MANAGEMENT ■ Lead Business or Legal Issue Resolution ■ Lead Governance Renegotiations
CONFLICT MANAGEMENT ■ Conflict Management ■ Manage Difficult Personal Issues
P R O B L E M S O LV I N G Source: Eli Lilly and Company
To make that possible, alliance management teams must deliver results along a defined continuum of services, ranging from proactively mitigating alliance risk to managing conflict and solving significant problems as they arise. Effective metrics also must consider how well the alliance management function meets the short-term needs as well as the longer-term goals of the group’s clients. Ideally, a measurement tool provides the alliance manager with a structured way of targeting resources to the areas of greatest need. Finally, the criteria can’t be overly cumbersome or difficult to administer. In short, the system of metrics itself needs to create value for those who use it.
Alliance Management Deﬁned Before creating a robust alliance management metric, it’s necessary to define what alliance managers actually do. In some organizations, the role looks like traditional project management, with a focus on Gantt chart creation and meeting facilitation. In others, it’s about relationship management, with an emphasis on how each partner organization feels. And for many others, alliance management lives as a blend between these extremes. The crux of measuring alliance management’s value—and rewarding alliance managers accordingly—is having a structured, logical alliance management function that addresses the proactive and reactive needs of the partnership. Our definition of alliance management, which has evolved since Eli Lilly and Company founded the first dedicated office in 1999, is that alliance management should be focused on reducing risk: 24
– It should reduce human (or relationship) risk, which is created by the mix of personalities and cultures that come together in an alliance. – It should reduce business risk, which is present when partners create a new product or service. – It should reduce legal uncertainties, which occur at the intersection of business and human risk, where they are subject to the governing contract. In managing each type of risk, our professionals serve the alliance as ombudsmen, viewing each risk or problem through the lens of each patron: the customer (who directly uses alliance management services), the business (the corporate entity the customer works for), and the alliance itself.
Risks and Problems The term risk has a mathematical, future-oriented connotation; it’s the probability that an undesirable event or situation will come to pass. A problem, on the other hand, is more current and specific. We describe categories of risk and uncertainty—human, business, and legal—but problems can be specifically named. An operational definition of a problem is a risk that has been realized. Most people do not think in terms of risk—they think in terms of problems and consequences. When someone describes the concept of risk, they often speak about specific problems that might occur. This natural semantic division between the possibility of a future, potential problem (a risk) and an actual problem (fully realized risk) is an important distinction for successful alliance Strategic Alliance Magazine
Non ASAP Member Limited Edition, Q3, 2011