Strategic Alliance Magazine

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“We used your presentation on Portfolio Management to develp our own portfolio management metrics at SAS. Your scoring methodology was most helpful in determining a weighted scoring algorithm for our measures. It’s an excellent way for us to assess status of current partnerships and to set objectives for future direction with partners. We’re also using this work as a foundation for our next step in the process – determining coverage models. Thanks again for your insights!”

The Future of Alliance Management

Donna Peek, CSAP Global Alliance Director Consulting Portfolio at SAS Institute

+ Increase alliance performance and effectiveness

It’s a Complex World. Let The Rhythm of Business Help You Navigate It. Increasingly, alliance managers are being asked to do more with less. Larger alliance portfolios. More complex collaborations. Fewer organizational resources. Don’t Go It Alone. When the challenges of complexity and scale threaten the success of alliance portfolios, alliance leaders turn to The Rhythm of Business for clarity, deep insights, and step-by-step help. At The Rhythm of Business, we serve as thinking partners and guides, providing cost-effective strategies, frameworks, and tools that: + Drive financial results and other measurable value + Reduce complexity (and risk) in your alliance portfolio Take Your Collaborative Capabilities to the Next Level. The Rhythm of Business is your “center of alliance excellence,” and a resource for comprehensive support, such as: + Partnering program design + Alliance organization, staffing, and process design + Guidebooks, toolkits, and alliance metrics + Help with alliance start-ups, strategic planning, ongoing assessments, and interventions + Customized, targeted education for alliance managers, teams, and executives + Alliance portfolio analysis, mapping, 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 and profession of alliance management across sectors, throughout industries, and around the world. Your Guide to the Future of Alliance Management Contact The Rhythm of Business today at +1 617 965 4777 or to begin, or continue, your journey down the path toward successful alliance management.

Spanning the Enterprise. Watch for your opportunity to participate in our 2012 research study on The Practice of Alliance Management in the Biopharma ­ceutical Industry. Call +1.617.965.4777 and visit our website at to access our extensive library of publications, presentations, tools, and other resources.

Mark March 4-7, 2013 on your calendar today and join ASAP in Orlando, Florida, USA for the world’s largest and most important annual gathering of alliance management and business collaboration professionals.

✓ Attend informative seminars and expert panels ✓ Get group and one-on-one training and coaching ✓ Take the CSAP Certification Exam ✓ 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 Recognition Dinner

The 2013 ASAP Global Alliance Summit Mastering the Art and Science of Alliance March 4-7, 2013 Gaylord Palms Hotel Orlando, Florida, USA

To learn more, visit

Call +1-978-544-1866 Become a Global Alliance Summit Sponsor Today!

To learn about or purchase sponsorship programs, speak to any ASAP staff member at +1-781-562-1630 or contact: John DeWitt, Publisher, ASAP Media Tel: +1-978-544-1866 Michele Shannon, Senior Meeting & Event Manager +1-781-562-1630 ext. 204

The 2012

Strategic Alliances Conference

Alliance Management: Key Strategies for Profitable Partnerships

October 25-26, 2012 InterContinental The Barclay New York

how to successfully develop and manage alliances - Discuss your alliance strategy to better achieve company growth goals - Revisit your company evaluate opportunities, find partners, build trust, - Help and maintain and improve relationships strategic alliances case studies and key insights from senior executives - Hear representing Bayer, DuPont, Oracle, Schneider Electric, among others Presented with assistance from

Media assistance provided by

Use promotion code CD1 and save $300 off your registration! To register go to our website or call 212.339.0345

up front

A Progress Report

Will the Outside World Ever Understand What Goes into Making a Partnership Successful? By Art Canter

AS WE HAVE TOLD OUR READERS BEFORE, we started ASAP Media and its flagship publication Strategic Alliance Magazine to fill the void left by the business and trade press in terms of addressing the entire life cycle of the alliance, not just the negotiation and signing of a deal. In July, I sat down with a Boston Globe reporter to deliver an important message related to ASAP Media’s mission: each time a journalist profiles a partnership agreement and perhaps even goes as far as to shower it with praise, that writer should know that the ultimate success of this relationship will be determined well after the ink has dried, largely by an unheralded group within the organization. Or, as Emergent BioSolutions’ Daniel Abdun-Nabi said in this issue’s CEO Forum, “To me, alliance management is more about the life of the partnership than the birth of the partnership.” I emphasized to this Globe reporter that making good on alliance investments depends on three broad components: 1) people, 2) tools and processes, and 3) culture. While the biggest companies are paying lip service to getting serious about embracing the new collaborative business world, and often putting their money where their mouths are in the form of alliance pacts, the alliance management community knows that objectives will not be achieved without the skilled alliance management professionals who can gain sponsorship from senior management above and influence the key stakeholders across the rest of the organization to uphold the alliance’s Quarter 3, 2012

interests. Without tools like the alliance health check, an alliance can go off the rails without periodic inspection of critical operational elements, including various intangible facets of alliance culture. Toward the end of our conversation, this reporter acknowledged that he, his publication, and his industry rarely revisit the deals they cover to evaluate whether they achieved their stated goals. We are pleased to be making inroads in this respect. When reporters begin evaluating partnership results, our community is well positioned to serve as the experts who help them assess everything that took place in between the start of an alliance and the current day.

Communicating Within

As we make progress in educating the broader business world, it is critical that we maintain active engagement within our own community—something we hope we have done with our article explaining the initiatives our association is embarking on based on the insights gained from our member survey earlier this year. Similarly, while we have previously touched on aligning with the Csuite and other stakeholders, it is always important for alliance managers to continually engage and coordinate with one

another. As our piece on managing an alliance portfolio reminds us, we have to be aware of potential synergies across an organization’s alliances and ensure that the results of each partnership align with overall company strategy when individual objectives are accomplished.

Moving Beyond

Meanwhile, our IT Special Focus caps a solid first half of the year for ASAP in this industry. We now count three new industry leaders as ASAP Global Members— Citrix, VMware, and Motorola—and we look forward to seeing how our community benefits from their perspectives. If Strategic Alliance Magazine is keeping you informed, while at the same time educating our key external audiences, then we are well on our way to accomplishing our explicit mission to elevate and promote the alliance management profession. Art Canter, president and CEO of ASAP, is executive publisher of Strategic Alliance Magazine. 5

Quarter 3, 2012

The magazine of the Association of Strategic Alliance Professionals AN ASAP MEDIA PUBLICATION EDITORIAL TEAM Art Canter, Executive Publisher 781-562-1630 ext. 201 John W. DeWitt, Publisher 978-544-1866 Jon Lavietes, Editorial Director 415-572-4408 Michael Burke, Editor-in-Chief 413-345-1624 Greg Caulton, Creative Director 413-461-7096 Matthew Wimmer, Design and Online Media Manager 774-316-0916 Michelle Duga, Sponsorship Coordinator 978-544-1866 Ben Olson, Graphic Design Intern 585-245-4796 ASAP STAFF Art Canter, President and CEO 781-562-1630 ext. 201 Pam Goodell, CA-AM, Vice President of Operations 781-562-1630 ext. 202 Lori Gold, Senior Manager of Membership Services 781-562-1630 ext. 203 Michele Shannon, Senior Meeting & Event Manager 781-562-1630 ext. 204 Brendan Ward, Administrative Support 781-562-1630 ext. 200 Diane Lemkin, Accounting Manager 781-562-1630 ext. 206 Jennifer Silver, Certification Coordinator 781-562-1630 ext. 205 © Copyright 2012 Association of Strategic Alliance Professionals. All Rights Reserved.

in this issue



Managing and Assessing the Alliance Portfolio

Taking a Strategic View of the Alliances Growing in Your Company’s Garden (Pruning and Weeding Tips Included) | By Michael Burke

While every individual alliance is unique, multiple alliances are often grouped into portfolios—by business unit, geography, lifecycle stage, or customer segment, for example. Analyzing and managing alliances using the portfolio approach not only can help companies clearly see their alliances, but it better keeps alliance goals aligned with larger corporate strategic objectives.


n Editorial Supplement

Governance by Design

How Well-Established Principles and Practices Set the Stage for Alliance Success | By David Thompson, CA-AM, and Steven E. Twait, CSAP

The first in a four-part series on alliance governance, this article offers an overview of the most important elements to consider when designing structures and processes to guide a partnership throughout its life cycle. The authors offer practical strategies and tools that alliance professionals can use to anticipate and mitigate risk from multiple sources, including interpersonal relationships, business risk, and legal uncertainties. By designing and implementing a strong, principle-based system of governance, alliance professionals can establish a lasting foundation and a flexible framework that serve as integral components of a partnership’s ultimate success. Sponsored by Eli Lilly & Co.


n BioPharma Conference

ASAP BioPharma Conference Comes to Boston Area This November

Creating Alliance Culture, New Types of Alliance Partners, and Hands-on Skill Building Highlight Agenda. | By ASAP Media Staff

The 2012 ASAP BioPharma Conference agenda is close to complete. The main theme of this year’s conference explores “Creating a Culture of Alliance Excellence” by examining how to work with key internal partners to build awareness of the discipline throughout the organization. The conference also has tracks designed for the senior executive looking to better realize alliance management’s potential to achieve company goals. It explores emerging relationships in the areas of manufacturing, biosimilars, and open innovation. 6

Strategic Alliance Magazine



Q&A with Daniel J. Abdun-Nabi, President and CEO, Emergent BioSolutions


Daniel J. Abdun-Nabi took over as president and CEO of ASAP Corporate Member Emergent BioSolutions on April 1. Since then, Abdun-Nabi has maintained the company’s identity. Known for its work with the United States federal government on medical countermeasure preparedness, most notably its BioThrax anthrax vaccine, Emergent announced in June a new initiative with the Biomedical Advanced Research and Development Authority (BARDA) around pandemic flu and CBRN (Chemical, Biological, Radiological, and Nuclear) threats. Abdun-Nabi spoke with us about the recent announcement as well as the nuances of working with government entities, public-private partnerships, and pandemic diseases, among other topics. Sponsored by Quintiles. n INSURANCE ALLIANCES

Worth Their Salt

The Insurance Industry’s Early Adopters of Alliance Management Are Seasoning Their Plates with the Profession’s Tools of the Trade—And Folding Alliances into Their Companies’ Recipes | By Jon Lavietes

The insurance industry is one of the leading emerging vertical markets adopting alliance management practices to achieve its goals. Although insurance companies are not strangers to partnerships, alliance management tools and processes are still somewhat foreign to them. A few insurance pioneers have illustrated alliance “Change Management 101” by finding champions, educating other divisions about the discipline, gaining wider adoption by earning and merchandising early wins, and ultimately achieving corporate goals.



Sleeping with the Enemy

These Days, You Cannot Avoid Cooperating with a Competitor in IT. Here’s How to Make a “Coopetitive” Partnership Work. | By Jon Lavietes

If you are in IT, your company is either working with a competitor or soon will be. Between industry consolidation, customer demands, and the inherent interdependent nature of technology, coopetition is unavoidable. The unique needs of a coopetitive relationship necessitate a slightly different approach to starting and maintaining such an alliance.

Regular Features: 5 n UP FRONT | By Art Canter Will the Outside World Ever Understand What Goes into Making a Partnership Successful? 11 n COLLABORATIVE BUZZ Alliance News Briefs | People in the News ASAP & ASAP Partner Calendar of Events ASAP Chapter Updates Quarter 3, 2012

15 n ASAP MEMBER SPOTLIGHT Build, Buy, or Ally? Alliance Management at the Forefront of Service-Based Alliances PPD Aims to Exemplify What It Means to Make Your Client a True Strategic Ally 57 n SOLUTIONS MARKETPLACE Products and services for and from strategic alliance professionals. 7

Quarter 3, 2012

The magazine of the Association of Strategic Alliance Professionals

ASAP BOARD & COMMITTEE CHAIRS Russ Buchanan, CSAP ASAP Chairman of the Board Vice President, Worldwide Alliances, Xerox Corp. Jan Twombly, CSAP Chairman, ASAP Program Committee Member, ASAP Executive Committee President, The Rhythm of Business, Inc.

in this issue 46


Changing the Channel

Oncoming Cloud Is Threatening to Storm the Way VARs and Vendors Collaborate | By Jon Lavietes

Value-Added Resellers (VARs) have been a mainstay in IT and hold critical customer relationships and valuable vertical and local geography expertise. Now, Cloud technologies are taking them out of their comfort zone in many ways, forcing changes in their financial model and upping the ante in how deeply they engage in solution development. Technology vendors are now embracing the challenge of helping VARs to transition to the new Cloud reality on the horizon.



Strategic Innovation Partnering: The Internet of Everything Information Technology Is Permeating Just About Every Industry in the World Today, and Alliances Are Forging the Path for This Convergence By Norma Watenpaugh, CSAP

Strategic Alliance Magazine is published quarterly. Publisher is The Association of Strategic Alliance Professionals, 960 Turnpike Street, Canton, MA 02021, +1 781-562-1630. 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. Periodicals postage is paid in Chicopee, MA, and additional mailing offices. Postmaster: Send address changes to STRATEGIC ALLIANCE MAGAZINE, 960 Turnpike Street, Canton, MA 02021. Copyright 2012, The Association of Strategic Alliance Professionals. No part of this publication 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, +1 781-562-1630.


Technology solutions are being embedded into the products and services of nearly every vertical industry such as financial services, building and construction, health care, and energy management. An industry expert profiles some of the alliances making this new reality possible and provides guidelines for responding to the challenges that arise in these new types of partnerships.



Can Alliance Management Save the World?

The Principles of the Discipline Could Make It the Ideal Profession to Solve Critical Social Problems | By John DeWitt and Jon Lavietes

Global warming. Poverty. Disease. Tackling these worldwide social ills will likely require influencing authority figures and a variety of other constituencies to act without compelling them, and orchestrating initiatives with the priorities of allies and end-goals in parallel with, if not ahead of, one’s own interests. Who do you think is ideally suited for the job? Strategic Alliance Magazine

Make Your Alliances Work

Let Vantage Partners Help Your Company Negotiate and Manage Critical Relationships 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 find solutions to their specific alliance challenges, Vantage Partners offers a broad range of services: Develop Your Alliance Strategy ▶ Define (or refine) 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 implement 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-Specific Team Training ▶ Training Alliance Management Groups

About Vantage Partners Vantage Partners, a spin-off of the Harvard Negotiation Project, is a management consulting firm 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, call +1 617 354 6090, or e-mail

Helping Companies Negotiate and Manage Critical Relationships

Check Out Our New Alliance Compendium Receive “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 findings on the topics of alliances, negotiation, relationship management, and change management. To request your copy of “Making Alliances Work,” visit


We Asked.You Answered. We’re Delivering! In January, nearly 400 ASAP members filled out our survey to get your opinion on what is working for you and what can be done to further enhance your membership. At the Global Alliance Summit in March, a Membership Roundtable of ASAP board members, chapter leaders, and other members from the ASAP community analyzed those responses against ASAP’s core value propositions—networking, knowledge and resources, and professional development—and delineated the ASAP community’s top priorities. As a result, you said you wanted to: + Expand our knowledge base by increasing the number of member companies and industries, + Extend the shelf life of ASAP events, + Increase the profile of ASAP’s overall structure, + Strengthen our local chapters, + Create more opportunities for our experienced members to share their knowledge and conduct research, and + Find more ways to maximize benefits such as certification. When we asked you why you join ASAP, 74 percent of you said “To network/meet/ exchange ideas/socialize with peers,” which was one of the top two most-cited reasons for becoming a member. Today, our Membership Value & Experience Committee is responding to the desire to grow our knowledge and member base, which spans nine industries, by putting together a “Champions” program in which our board members show peers at nonmember partner organizations how ASAP has helped their companies become“partners of choice”—and how the association can do the same for them. With 36 percent of respondents claiming to be unaware of the benefits of certification, ASAP is planning a campaign to educate HR managers in how certified alliance management professionals achieve corporate objectives more consistently thanks to their mastery of the profession’s most up-to-date tools and methodologies. Meanwhile, we have hired a new certification coordinator and revamped our certification points system 10

ASAP Is Bringing New Programs Based on Membership Survey Feedback

to give you nine new ways to earn credits toward CA-AM renewal and CSAP eligibility. Our survey revealed that ASAP’s local chapters may be underutilized by members, so ASAP is currently discussing ways to increase chapter participation. All of our chapters are led by volunteers, and we are exploring avenues to increase support to them, as well as leverage content and best practices to further support their efforts. We envision our chapters working in partnership with ASAP global to focus on providing the regular events and programming, networking, and professional development opportunities you crave. In the meantime, a few of our chapters have moved to bring the knowledge shared at the Global Alliance Summit back to members who could not join us in Las Vegas by reprising selected sessions from the event, while our ASAP Netcast webinar series has recreated a Summit session as well. We know how much you value the Summit— it was the only membership benefit to score higher than four on a five-point scale (4.08) in terms of its importance to you. Many of our written documents and educational content rated high in importance to our members—more than 90 percent of you found these to be a critical benefit. Our Knowledge Base & Research Committee is expanding that collection of helpful tools by finalizing the new Best Practices Workbook; at 3.97 on a scale of five, best practice publications were rated the second-most

important benefit to you after the Summit. Meanwhile, an advisory board of practitioners is now reviewing submissions for new white papers and case studies, and evaluating proposals from other organizations for new research with the desire of tapping into ASAP’s reservoir of experienced members it has built over the last 14 years. “ASAP will always stay ahead of the needs of its members,” said Jack Pearson, CSAP, ASAP vice chairman, chairman of the Member Value & Experience Committee, and executive vice president and chief alliance officer at Concentrx Pharmaceuticals. “Together, our existing programs and new initiatives will ensure members have everything they require to advance their careers and drive their companies’ partnerships to fruition.” Of course, you have told us that you are already putting the existing resources to good use—Strategic Alliance Magazine, the ASAP eNews monthly newsletter, and Best Practice Bulletins are three of the top five most-utilized member benefits, with the magazine coming in at number one. Released earlier this year, the 4th State of Alliance Management Study has kept you informed on the overall success rates of alliances and the utilization of alliance management tools today as well as how those results compare over the past decade. On the whole, most of you are pleased with what ASAP membership brings; eight out of every 10 respondents said they will “likely remain a member,” while overall satisfaction is up from our last survey conducted in 2008. “It is great to give our members a voice, but it doesn’t mean much if we don’t act on what they say,” said Kim Fill, CSAP, the ASAP Membership Committee member who led the survey initiative. “ASAP is always striving to augment its alreadyunmatched knowledge, professional development capabilities, and resources that make membership indispensable to alliance management professionals.”

For questions or comments please contact Lori Gold, Senior Manager of Membership Services, at or +1-781-562-1630. Strategic Alliance Magazine

Collaborative Buzz ASAP’s UK Chapter Tells SAS-Accenture Story By Jon Lavietes and Michael Burke

The Wittington House is a palatial 110-acre estate in south Buckinghamshire, UK, that looks more like the queen’s vacation home than an office for a technology company. But rather than serving as the well-appointed lair of the Dark Knight, the Wittington House was the scene this past spring of a gathering of a much more collaborative group of people. It was here, at what is actually the UK office for SAS, that ASAP’s UK chapter event “Turning a Partnership into a Strategic Alliance” took place, which told the story of the SAS-Accenture global partnership. Over the course of a decade, ASAP Global Member SAS and Accenture have collaborated on more than 150 projects on behalf of clients in financial services, telecommunications, energy, life sciences, retail, and manufacturing, among other industries. In 2010, the two companies evolved their relationship to form the Accenture SAS Analytics Group to develop and deliver solutions and services that enable clients to harness the power of predictive analytics. At the UK chapter event, Neil Miller, UK and Ireland managing partner for Accenture Analytics, Sue Reynolds, alliance marketing manager for SAS, and Alastair Forbes, Accenture strategic alliances manager at SAS, shared the details behind the success of this global strategic alliance. After a general overview outlining the scope and history of the SASAccenture relationship, the presenters divulged the four categories of key metrics—“the four R’s,” if you will—used to gauge the success of the alliance: 1) revenue, 2) relationships, 3) resources, and 4) repeatability. While many of the metrics were revenue- and Quarter 3, 2012

pipeline-focused, attendees were interested in discussing how to measure alliance success beyond meeting sales targets and bolstering company bottom lines. “[The audience] talked about measuring proof-of-concept programs. We don’t want to run multiple proof of concepts for the sake of doing it,” said Forbes, who added that the group seemed to agree that the ultimate goal is to have proof of concepts achieve stated goals vis-à-vis the client opportunity. Forbes then told the audience about the investments SAS made in the people, skills, and marketing necessary to execute on the partnership’s objectives, and outlined how to align executive sponsors that could rally the players in the company to carry out the tasks that would bring the alliance to fruition. The presentation also delved into the internal joint marketing efforts, including the promotion of the SAS e-book to 300 Accenture UK contacts, as well as the particulars of the Accenture-SAS “boot camp” training program. The two companies have also jointly sponsored global events. Their respective CEOs appeared together on the main stage of the Premiere Business Leadership Conference in Amsterdam in May.


Register Now for the ASAP BioPharma Conference

Registration is now open for the ASAP BioPharma Conference, the world’s most important event dedicated to alliance management in the biopharmaceutical industry. Many of biopharma’s most influential companies and thought leaders will gather at the Charles Hotel in Cambridge, Mass., USA, on Nov. 15 and 16 to discuss the issues that are topof-mind to alliance management leaders and practitioners, as well as those from other departments playing essential roles in strategic alliances. The theme for this year’s event is “Creating a Culture of Alliance Excellence” throughout a traditional biopharmaceutical company, biotech service, or contract manufacturing organization. The conference will also explore new frontiers in services alliances, trends in deal making, alliances with CMOs, and partnerships around biosimilars, among other topics. The conference’s opening plenary session this year will be “Culture Starts at the Top,” which includes: “Creating an Effective Alliance Management Dialogue with Your (New) CEO,” and “Aligning with the C-Suite: Focusing on the Strategic and Financial Aspects of Key Alliance Decisions.” (Stay tuned for other sessions to be announced soon.) 11

Collaborative Buzz Session tracks for the two-day event include: “Developing the Muscle: Creating Excellence in Your Alliance Management Practice, Parts I and II”; “Essential Building Blocks of a Culture of Alliance Excellence”; and “Personal Growth: Developing the Hard Soft Skills That Break Barriers to Alliance Success—and Enhance Your Career.” Ending the day on Nov. 16 will be a closing plenary session devoted to “The Future of Biopharma Alliance Management.” At press time, confirmed speakers for the conference included: n Jeremy Ahouse, CSAP, Novartis

Institutes for Biomedical Research

n Christine Carberry, CSAP,

Carberry Consulting

n Kim Fill, CSAP, Eli Lilly and Company n Lena Frank, CA-AM, Acorda


n Stu Kliman, Vantage Partners n Michael Leonetti, CSAP, former

ASAP chairman, Boehringer Ingelheim n Peter Meder, Peter Meder & Company n Brooke Paige, CSAP, 7Continents Collaboration n Christian Prothmann, AstraZeneca n Jeff Shuman, CSAP, The Rhythm of Business n Susan Sullivan, ImmunoGen n David Thompson, CA-AM, Eli Lilly and Company In addition, there will be presenters from these leading biopharmaceutical firms, plus others: n Abbott Laboratories n Bayer Healthcare Pharmaceuticals n Human Genome Sciences n Mylan Pharmaceuticals n Onyx Pharmaceuticals n Sanofi Visit ASAP’s Web site,, to register now, check for updates, and network with the biopharma profession’s best and brightest this November. 12

More Ways to Earn ASAP Certification Points

ASAP members now have more avenues than ever to secure and register qualification points toward CA-AM renewal or CSAP exam eligibility. Unveiled on July 1, the new point system provides 15 categories for earning points spread across four larger groupings: n Presentations (ASAP conferences,

chapter events, and webinars as well as approved ASAP and non-ASAP courses) n Writing (Member Resource Library, Strategic Alliance Magazine, Best Practices Bulletin, or other approved publications) n Attendance/Participation (ASAP conferences, chapter events, and webinars as well as approved ASAP courses and preapproved continuing education programs) n Service to ASAP (chapter leadership, board/special task force/committee membership) To review the new certification point categories in greater detail, go to www. and use the “Request for Service Points” form to register one or more of the six points needed for CAAM renewal or CSAP exam eligibility. For questions about submitting points under the new system, please contact ASAP’s certification coordinator, Jennifer Silver, at 781-562-1630 ext. 205 or jsilver

4th State of Alliance Management Study Now Available to ASAP Members

The electronic version of the 4th State of Alliance Management study, the world’s most comprehensive academic analysis of the alliance management profession, is now available to ASAP members. Do you want to know the business world’s current alliance success rate? How many alliances companies are

handling in their portfolios? What types of engagements they’re undertaking? Which alliance management tools alliance managers rely on most often in their practice? How the new data compare with the success rates and general utilization of alliances over the last decade? The 4th State of Alliance Management answers all of these questions and compares the findings with those in the previous three iterations of the study, conducted in 2002, 2007, and 2009. If you are an ASAP member you can download the 4th State of Alliance Management from the ASAP members’ Web site, and immerse yourself in the most complete exploration of the alliance management discipline. Coming soon will be details on how members and nonmembers can purchase the print version of the study. If you are interested in obtaining a print version when it is available, please call +1-781-562-1630 ext. 202.

ASAP and ASAP Partner Events The Conference Board 2012 Strategic Alliances Conference

October 25–26, 2012 InterContinental Barclay, New York, N.Y., USA (for more information and to register, visit alliances_asap or call 212-339-0345)

2012 ASAP BioPharma Conference

November 15–16, 2012 The Charles Hotel, Cambridge, Mass., USA (to register visit

ASAP 2013 Global Alliance Summit

March 4–7, 2013 Gaylord Palms Hotel, Orlando, Fla., USA (for more information, visit www. Strategic Alliance Magazine

Alliance News M&A and Strategic Alliance Activity Predicted to Rise

Executives are anticipating an uptick in both merger and acquisition and strategic alliance activity in the manufacturing sector over the next two years, according to Deloitte’s third annual Corporate Development survey ( Services/Financial-Advisory-Services/ Corporate-Development/696435131bc 16310VgnVCM1000001a56f00aRCRD. htm). Nearly half the respondents (46 percent) expect an increase in mergers and acquisitions activity, while more than half said they expect an increase in strategic alliance transactions driven by investment in emerging markets and a need for more judicious deployment of scarce capital. While 40 percent of respondents ranked mergers as the most difficult type of deal to execute, nearly one in four (23 percent) viewed joint ventures and strategic alliances as presenting a greater challenge. Also, more than 40 percent of executives concede that their companies are less skilled at executing strategic alliances than mergers. As to why strategic alliances stall or break down, executives most frequently pointed to the alliance partners’ differing views and their inability to align strategy. “Strategic alliances and joint ventures can be difficult transactions; nevertheless we are seeing a notable uptick in this area,” said Chris Ruggeri, principal of Deloitte Financial Advisory Services LLP and its Merger & Acquisition Services leader. According to Ruggeri, “The perception of strategic alliances is changing from a last resort to a preferred investment strategy, especially in emerging markets, and companies are learning from industries like technology and life sciences that use strategic alliances very effectively to manage risk and capital.” Quarter 3, 2012

Meanwhile, another recent report, broader and less industry-specific, is “Leading Through Connections: Insights from the IBM CEO Study” ( us/en/c-suite/ceostudy2012/index. html), which found that CEOs increasingly seek “collaboration” as a preferred trait among their employees, and that 69 percent of chief executives plan to “partner extensively” in the near future. The IBM study was based on surveys of more than 1,700 CEOs around the globe.

Pharma Partnerships with Academia, Nonprofits, and Government on the Increase Partnerships between pharmaceutical companies and academic, nonprofit, and government entities were on the rise this past spring with a number of agreements announced, according to a report by Burrill & Company, which has been tracking such data monthly since 2009.

Among the most significant of the corporate-academic partnerships announced was the $285 million effort that involves five European pharmaceutical companies—GlaxoSmithKline, AstraZeneca, Sanofi, Janssen, and Basilea Pharmaceutica—with leading academic institutions to develop new antibiotics to combat the growing problem of drug resistant microbes. (AstraZeneca and Sanofi are ASAP Global Members; GlaxoSmithKline is an ASAP Corporate Member. Basilea is also collaborating with ASAP Corporate Member Astellas to develop a drug targeting invasive fungal infections.) A separate agreement in the United States between Pfizer, Eli Lilly, AstraZeneca, and the National Institutes of Health’s National Clinical and Translational Sciences program seeks to award grants to fund preclinical and clinical feasibility studies for new uses of more than 20 compounds shelved by the pharmaceutical companies because they failed to work in the diseases for which they were being pursued. (Eli Lilly is an ASAP Global Member; Pfizer is an ASAP Corporate Member.)

Emergent and Feds Fight Flu Emergent BioSolutions is an ASAP Corporate Member that is very actively

More than 40 percent of executives concede that their companies are less skilled at executing strategic alliances than mergers. involved with the U.S. government, and recently the company announced an alliance with the Biomedical Advanced Research and Development Authority (BARDA) to create the Center for Innovation in Advanced Development and Manufacturing, an entity that will be charged with critical responsibilities related to treatment and overall preparedness in the event of a pandemic influenza situation (see story in this issue, CEO Forum, page 33). This Center will work to manufacture a pandemic influenza vaccine, build facilities that support its production, and manufacture the vaccine itself. In addition, Emergent will likely also have to work with other federal government partners in this process and possibly train a workforce to produce identified chemical, biological, radiological, and nuclear (CBRN) medical countermeasures. The contract consists of an eight-year base period of performance and up to 17 additional one-year option periods. It is valued at approximately $220 million (costs shared between the government and Emergent). Emergent and the U.S. government have other, similar partnerships, most notably for anthrax-related initiatives.

Yahoo! and Facebook Kiss and Make Up In early July Yahoo! and Facebook announced that they have entered into definitive agreements that launch a new advertising partnership, extend 13

Collaborative Buzz and expand distribution arrangements, and settle all pending patent lawsuits between the companies. Under the agreements, which include a patent portfolio cross-license, the parties will work together to bring consumers and advertisers “premium media experiences” promoted and distributed across both Yahoo! and Facebook, according to a joint press release. Yahoo! and Facebook will also work together to bring Yahoo!’s media event coverage to Facebook users by collaborating on social integrations on the Yahoo! site. Since the launch of the original multiyear partnership between Yahoo! and Facebook that allows users to discover and connect news and information on Yahoo! sites and share them with their Facebook friends, Yahoo! has integrated the feature called “Social Bar” on

The SAS Fraud Framework for Government has joined with Capgemini to help government agencies reduce revenue losses from tax and welfare fraud, and improper payments. more than 100 of its properties globally, and more than 90 million users have implemented it. Going forward, Yahoo! and Facebook have agreed to work more closely and collaborate on multiple events annually over the next several years.

SBA and AARP Unite to Help Older Americans Start Businesses The U.S. Small Business Administration (SBA) and the American Association of Retired Persons (AARP) are launching a strategic alliance to provide counseling and training to entrepreneurs over the age of 50 who want to start or grow a small business. Through SBA’s online 14

training courses and its nationwide network of business mentors and counselors, the two organizations expect to train 100,000 “encore entrepreneurs,” men and women over 50 who are starting or running a small business. SBA has set up a dedicated Web page for Americans over the age of 50 featuring an online self-assessment tool that will help potential small business owners understand their readiness for starting a commercial venture, as well as information to help with business planning, shaping a winning idea, professional counseling, financial services, and finding local resources. This Web page can be found at SBA and AARP also will jointly develop and host a customized online course, self-assessment, and webinar series for older entrepreneurs.

Fraudbusters: SAS and Capgemini Combat Cheating in the Public Sector

The SAS Fraud Framework for Government has joined with Capgemini to help government agencies reduce revenue losses from tax and welfare fraud, and improper payments, according to the social networking forum (Both SAS and Capgemini are ASAP Global Members.) In this endeavor, Capgemini has combined its experience as a transformation and business analytics partner with SAS’s fraud-fighting analytics technology. The two already work together on strategic risk analytics solutions used by HM Revenue & Customs, the UK tax authority, to tackle fraud and manage debt. Capgemini has also been selected to implement an SAS business intelligence and analytics solution for the Maharashtra Sales Tax Department (MSTD) in India.

NetApp Garners Cloud Award from Microsoft

In recognition of its work helping customers and partners build private cloud

solutions on the Microsoft platform, NetApp has won the 2012 Microsoft Private Cloud Partner of the Year award. NetApp was honored among a global field of top Microsoft partners for demonstrating excellence in innovation and implementation of customer solutions based on Microsoft technology. The honor reinforces NetApp’s longstanding commitment to storage and storage management solutions for Microsoft environments that enable organizations to reduce costs, increase agility, improve efficiency, and utilize proven platforms. (Microsoft is an ASAP Global Member; NetApp is an ASAP Corporate Member.)

CA Technologies Expands University Partnerships

CA Technologies recently announced that it is extending its university relationship program with plans to roll out a new Innovation Center in partnership with Tel Aviv University (TAU) in Israel, collaborating on topics such as IT management and cyber security. (CA Technologies is an ASAP Global Member.) Through its CA University Relations programs, CA Technologies has been working with academic institutions such as Stony Brook University in New York and the International Institute of Information Technology in Hyderabad, India, to develop and implement initiatives that drive innovation, offer unique opportunities for students and faculty, and uncover fresh ideas for new products and solutions.

AstraZeneca and Bristol-Myers Squibb Expand Alliance Around Amylin

Bristol-Myers Squibb Company and Amylin Pharmaceuticals, Inc., announced that Bristol-Myers Squibb will acquire Amylin for $31 per share in cash, pursuant to a cash tender offer and second-step merger, or an aggregate purchase price of approximately $5.3 billion. The total value Continued on page 55 Strategic Alliance Magazine




spotlight member

Build, Buy, or Ally? Alliance Management at The Forefront of ServiceBased Alliances PPD Aims to Exemplify What It Means to Make Your Client a True Strategic Ally By Jon Lavietes

YOU HAVE PROBABLY HEARD THE PHRASE BEFORE, OR SOME VERSION OF IT: “Our customers are our partners.” One could argue that this axiom is truer for contract research organizations (CROs) than most. “You start to get real value when These organizations, which conPPD in a Flash duct clinical trials in all phases of both parties share a long-term Contract Research Organization (CRO) with a more the drug development life cycle as understanding and a view many than 25-year history of providing a full range of well as for medical devices and dimiles down the road instead of just global drug discovery and development services agnostics on behalf of biopharmaworking together on one existing ceutical organizations of all sizes, project,” said Michael W. Young, 12,000+ professionals, 85 offices in 46 countries have risen to prominence over the vice president of alliance manageSeveral large “development alliances,” each contribcourse of the last decade as layoffs, uting significant revenue warranting dedicated teams ment and business development at cost pressures, greater regulatory PPD (pictured above). “This more Many of these development alliances involve a scrutiny, and a looming patent strategic type of approach is the large number of clinical programs across several cliff have left pharmaceutical comdomain of the alliance managetherapeutic areas within PPD panies with fewer resources and ment group at PPD. We prefer to even less time to develop successwork with our clients in this way. Several “corporate alliances”—indirectrevenue-generating partners that augment PPD’s Whether they are small or large, ful new drugs. Although purely capabilities with technical and financial resources transaction-oriented outsourcing we want to develop longer-term that have mutual collaborative value relationships have existed for some relationships, ones where there time between biopharmaceutical are going to be mutual investment, companies and CROs, the critical nature of the responsibilities common goals, strong communication, and a more complete being entrusted to a CRO has resulted in collaborations where sharing of resources and ideas. When we can cocreate that kind the CRO acts as an extension of the customer’s development en- of alliance ecosystem, our clients find they benefit significantly terprise. This requires a level of organizational intimacy as the beyond the clinical trial remit.” partners work hand in hand with constant communication and PPD has called all of the world’s 50 largest pharmaceutical collaborative development execution. companies clients at one point. At any given time, PPD can be For Pharmaceutical Product Development, LLC (PPD), the suc- engaged in dozens of simultaneous projects with these global cess of an alliance relationship usually correlates with the degree clients, and many of these projects represent the largest cliniof collaboration with the client. cal development programs in the world. In these engagements, Quarter 3, 2012


There Are Now More Ways to Earn CA-AM and CSAP Certification Points Than Ever! ASAP members have more avenues to secure and register qualification points toward CA-AM renewal or CSAP exam eligibility. Unveiled on July 1, our new point system provides 15 categories for earning points spread across four larger groupings: n Presentations (ASAP conferences, chapter events, and webinars as well as approved

ASAP and non-ASAP courses) n Writing (Member Resource Library, Strategic Alliance Magazine, Best Practices Bulletin,

or other approved publication) n Attendance/Participation (ASAP conferences, chapter events, and webinars as well

as approved ASAP courses and pre-approved continuing education programs) n Service to ASAP (chapter leadership, Board/special task force/committee membership)

To review the new certification point categories in greater detail, go to the Renewals & Eligibility page under the Career Building section of Renewing your certification is more than just keeping up a title; it ensures continued success in your practice and the advancement of your career. For questions about submitting points under the new system, please contact ASAP’s Certification Coordinator, Jennifer Silver, at 781-562-1630 ext. 205 or 16


960 Turnpike Street Canton, MA 02021 Tel: +1-781-562-1630 Fax: +1-781-562-0354 Strategic Alliance Magazine

which PPD terms “development alliances,” PPD applies governance structures, metrics, and other alliance management tools to several projects within and across these customer partnerships. This enterprise view allows for collaborative portfolio decision making and investment as resources are deployed across projects. Moreover, this account structure helps PPD bolster all areas of the client’s business as other PPD capabilities are introduced to accelerate development programs. “An alliance management approach differs from a more transactional approach in that it allows us to have a longer-term view and understanding of the breadth and depth of our client’s overall development program,” said Young. “Predominantly, clients will come to a CRO with a preconceived notion of what they need them to do and what it is they are capable of doing. Working in an alliance structure allows us to take a more strategic approach to development of a company’s clinical program and bring more of our global resources and capabilities to our clients. When you work with a client side by side instead of from across the table, we share a view and are better able to meet their needs. For example, instead of a client coming to us and saying they need support for a Phase III trial, we can step back and ask, ‘What are you planning to do with this asset? Have you considered these alternatives? What else in the context of our alliance can we share?’” In addition, PPD and its development allies get more value from the knowledge accumulated across a portfolio of projects than single-project-focused customers ever could. “In the end, it’s about cost and time savings. In order to transfer the knowledge and lessons learned from a single client project, we need to have perfect synchrony between that project and the next one,” said John Barry, vice president of alliance management and sales operations at PPD. “But with these alliances that may have 50 or more projects going at one time, we don’t need that perfect synchrony. We can now look across the customer enterprise at PPD, and identify what’s right for the next project being loaded into our portfolio.”

Corporate Alliances Support Development Alliances To support these development alliances as well as the rest of PPD’s client business, PPD relies on a second type of partnership that exists primarily to augment the CRO’s capabilities. Dubbed “corporate alliances” within the company, these indirect-revenue-generating alliances allow the company to provide a wide variety of resources Quarter 3, 2012

John Barry, vice president of alliance management and sales operations at PPD.

to its clients that the company may not have internally. This can range from imaging services to specialized IT platforms to respiratory-focused laboratory, preclinical, and clinical development services to virtual 3-D clinical trial staff training. The corporate alliance portfolio also includes companies in the financial community through which PPD can access the capital needed to fund the advancement of customer assets.

PPD and its development allies get more value from the knowledge accumulated across a portfolio of projects than single-project-focused customers ever could. Aside from the obvious benefits of expanding PPD’s competencies, these alliances save PPD clients a great deal of time and money because they do not have to manage these partner relationships. According to Barry, enabling greater scale at the “investigator, geographic, and enterprise levels,” the corporate alliances also bring a few subtle-but-important benefits to all stakeholders. For example, PPD gets less-conspicuous perks from its partners such as discounts. The corporate partners get in the door with more of the biggest players in the pharmaceutical industry without having to duplicate due diligence for regulatory requirements. Of course, partners will never be aware of the myriad possible mutual fits across PPD’s portfolio. That’s where an alliance management professional’s proactivity and constant radar for new opportunities add value. “Our alliance management group is one of the primary teams inside PPD that is focused on optimizing Continued on page 55 17

Managing and Assessing the Alliance Portfolio Taking a Strategic View of the Alliances Growing in Your Company’s Garden (Pruning and Weeding Tips Included) By Michael Burke


Strategic Alliance Magazine

WE’VE ALL HEARD IT: “When you’ve seen one alliance, you’ve seen one alliance.” Managing any one alliance is complicated enough, with numerous pitfalls and plenty of potential for error—but what about having responsibility for a company’s entire portfolio of alliances? In an article in the July 2012 issue of the Journal of Marketing entitled “Alliance Portfolio Resource Diversity and Firm Innovation,” authors Anna S. Cui and Gina O’Connor wrote: “As the pace of innovation accelerates, more companies seek to boost their ability to innovate by working with others. Collaborating with diverse partners is believed to enhance innovation because diverse partner resources create synergy and opportunities for novel ideas. However, diversity is only beneficial when information and resources from different alliances are effectively shared. Working with a large number of diverse partners increases the complexity of alliance management, which in turn may prevent synergies from being realized.” Hence the importance of adopting the portfolio approach to alliances—looking at

A smaller company may consider all its collaborative relationships within one portfolio. In large enterprises, portfolios may be assembled at a divisional or business unit level or sometimes with a geographic orientation or focus on a particular customer need.

Quarter 3, 2012


Measurement and Management

Ard-Pieter de Man, CSAP, principal at Atos Consulting.

Peter Samson, alignment counselor at AlignComm.

Naturally, this is easier said than done—which may explain in large part why it isn’t done more often. Recent research by Ard-Pieter de Man, CSAP, principal at Atos Consulting, and colleagues at Amsterdam’s VU University found that in the realms of IT, engineering, and creative industries, less than 45 percent of companies managed their alliances as an integrated portfolio. Moreover, in less than 50 Dr. Christoph Sarry, global alliance percent of cases surveyed did managers look director for Roche Partnering. for and identify synergies or overlaps among their alliances. Perhaps most shockingly, de Man et al.’s research found that only in 21 percent or less of the companies they surveyed was there actual knowledge transfer among alliances in that company’s portfolio.

The challenge for alliance folks is to balance the capability that is in the organization with a dynamic alliance portfolio. them holistically, as much as possible, analyzing individual alliances in terms of their alignment to corporate strategy, and generally taking an overall, big-picture, strategic view. As Cui and O’Connor further noted, in their research they found that companies are better able to take advantage of their diverse alliance portfolios when, among other things, “different alliances involve some common functional activities (manufacturing, marketing, or R&D), ... [and] the company has a dedicated alliance management function that coordinates all partnering activities.... These conditions provide guidance for designing and managing a portfolio of alliances for innovation.... “Thus, the design of an individual alliance should be determined with consideration given to the needs of the portfolio of alliances; the firm benefits from a portfoliolevel alliance strategy that guides all alliance decisions. Companies need to understand the interdependencies among different alliances and manage multiple alliances as a coordinated portfolio.” Or as Steve Steinhilber of Cisco, an ASAP Global Member, wrote in his influential book Strategic Alliances: Three Ways to Make Them Work (Harvard Business Press, 2008): “Most companies do one-off alliances and wonder why their strategy fails. At Cisco, we take a portfolio approach. We start by making sure we understand our business objectives in the technology space where we are considering a build-buy-partner strategy. We then lay out the scope and number of relationships we need to achieve our business objectives.” 20

So what is an alliance portfolio? Two practitioners who have done quite a bit of work in this area, both handson and theoretical, are Jan Twombly, CSAP, and Jeff Shuman, CSAP, principals of The Rhythm of Business (an ASAP Corporate Member). They’ve even written three white papers on the topic, including “Measuring and Managing the Alliance Portfolio,” which helps to define the concept: “A portfolio is defined as the totality of something such as securities holdings, or an artist’s work. In alliance management, it implies managing multiple alliances as a whole, in addition to managing individual alliances.” In their work, Twombly and Shuman also distinguish an alliance portfolio from an alliance network: “Alliance portfolios and alliance networks have similar management needs,” they write. “They differ in that networks are organized around a specific purpose and a portfolio is not necessarily organized in that way. Alliance portfolios can be scoped on many different levels. A smaller company may consider all its collaborative relationships within one portfolio. In large enterprises, portfolios may be assembled at a divisional or business unit level or sometimes with a geographic orientation or focus on a particular customer need.”

The Portfolio Approach In a recent interview, Twombly and Shuman amplified some of the points made in their white paper. According to Twombly, taking a portfolio approach to alliances means “looking at the totality of your alliances, first of all determining if they are achieving their intended purpose. Do you have holes? Do you have alliances that are overweighted or underweightStrategic Alliance Magazine

ed in terms of the contribution they’re making? And then there’s a whole other aspect: what do the profiles of alliances in your portfolio imply for the way you manage them?” “The reason I think portfolios are important is, how else can alliance managers know what alliance capability they can build for their organization?” said Shuman. “How do they know they have sufficient coverage, skill sets, and what’s needed as to tools? We take a very simple, practical view: the capability exists to help you manage the relationships that comprise the portfolio. It isn’t necessary to have all your relationships in a single portfolio. You could have multiple portfolios in different geographies, different life-cycle stages or customer segments. The challenge for alliance folks is to balance the capability that is in the organization with a dynamic alliance portfolio. “The capability we’re talking about comes back to the essence of the alliance manager’s job: to help the organization realize the strategic value it seeks from the relationships it has, the alliances. What’s the strategic value you seek from the entities that make up the portfolio? If you have multiple portfolios around some logical segmentation, then the value you seek is portfolio dependent. It requires managing the risk caused by the complexity of the relationship. Complexity is multifaceted, and to some extent there’s a correlation with life-cycle stage, but not necessarily. What is it that causes complexity for your company?”

within their own organizations,” Samson argued. “While trying to align major relationships between two large companies, it’s critical that there first be alignment around an overall partner strategy inside each company. It is only within this context that the alliance managers can successfully build productive external relationships. “Ensuring alignment within each organization requires a well-articulated and clearly communicated role for partnerships and alliances,” he continued. “It then becomes the responsibility of the alliance teams to define the most appropriate portfolio of partners and to develop a role for each within the broader corporate plan. Whether there are thousands of alliances or very few, it must be clear to all the stakeholders how each player fits into the strategy. If partners compete with one another, the criteria for selecting one over another have to be clear, too.

With large companies and complex product portfolios, the linkage between alliance portfolios and corporate strategy is especially critical. “How does a company get there? When the alliance manager—with the backing of the executive leadership team—enforces clear rules of engagement. Successful alliances depend on no-surprise partnerships. The primary goal is predictability.”

Broken down into the simplest elements, Twombly and Shuman’s pragmatic view of alliance portfolios begins with corporate strategy, then proceeds to the alignment of the portfolio to that strategy, and finally looks at the contribution of each individual alliance to the overall strategy.

Samson, who works with both large and small companies, does not do portfolio assessments per se, but rather focuses on ensuring that there is an overall alignment to strategy, which has a direct impact on the alliance portfolio. How he does this varies by size of enterprise and maturity of the alliance process.

Alignment with Strategy

“With smaller companies, I get more involved; in larger companies, the portfolio is somewhat set, and it’s a case of more tweaking and focusing awareness on potential friction points,” he explained. “If the alliance portfolio gets too far out of alignment with company strategy, potentially valuable partnerships might actually become counterproductive.”

With large companies and complex product portfolios—in IT companies, for example, where there may be hundreds or even thousands of partners—the linkage between alliance portfolios and corporate strategy is especially critical. Equally important is the alignment within the organization itself, according to Peter Samson, alignment counselor at Redmond, Wash.–based AlignComm. This organizational alignment around the role of partners, or the lack of it, has important consequences for alliance portfolios. “However good the individual alliance managers may be, they are only as effective as the strategic alignment Quarter 3, 2012

“Symphonic” Alliances Besides strategic alignment, another filter through which portfolios must pass is that of the balanced scorecard, Samson observed. “If the internal metrics don’t support an overarching alliance strategy, then they inevitably don’t support the 21

tween Roche and the partner teams, and that the alliance is contributing to the [corporate] strategy,” he continued. “Alliance management does not select the partners, or align the overall portfolio strategy. The strategy is there—but evaluation and selection of partners is the role of business development.” In the pharmaceutical field, Sarry emphasized that alliance portfolio decisions often boil down to assessments made on the basis Jan Twombly, CSAP, principal of Jeff Shuman, CSAP, principal of of scientific considerations regarding the poThe Rhythm of Business. The Rhythm of Business. tential of specific products, or judgment calls based on results of clinical trials and surveys of the individual alliances,” he said. “Without a symphonic availability of similar products or treatments on the approach to alliances within an organization, it’s hard to successfully develop the correct metrics. However, broader market. once the broader role of partnerships is culturally accepted and the alliances are in place, then portfolio management becomes easier, as does the determination of which partner to select within a given sales or geographic situation. Portfolio management becomes an ongoing selection and prioritization process, a tactical implementation of alliance strategy.

“A portfolio approach allows you to compare alliances and lets you quickly see where there may be gaps in offerings. This is critical for any organization that has multiple partners, if for no other reason than to articulate how each fits into the overall strategy.”

Other Portfolio Considerations In some organizations’ portfolio assessment, however, there may be special considerations that are not necessarily the province of alliance management. At the pharmaceutical company Roche, for example, there are currently more than 100 alliances in play since Roche’s acquisition of Genentech, according to Christoph Sarry, global alliance director for Roche Partnering. These alliances are generally organized into portfolios, and the role of alliance management is primarily concerned with the hands-on, day-to-day managing of these collaborative relationships, in order to ensure that the strategic goals of these alliances are being realized. “Roche alliance management is viewed as always having the strategic goal in mind, which then guides our dayto-day tactical job,” said Sarry. “Each alliance director is overseeing his or her portfolio, potentially alliances with projects in different [disease] areas, and regularly checks that the project is running smoothly, that there are no issues with the partner, that there is a common understanding be22

“With the alliances themselves, the projects are very different,” he said. “In the same disease area, one alliance [may be] going well, [while] the other is not— you have to handle these alliances independently. Sometimes you have to make tradeoff decisions— and these decisions are prepared by the disease area teams and sanctioned by senior management. Alliance management has to make sure that this decision is executed regarding the partner in the right manner, considering that many people and functions are involved in this process. You have other alliances in other areas, such as IT, where maybe an alliance manager is driving the portfolio. In pharmaceuticals this is different.”

The Really Big Picture Industry differences aside, Twombly and Shuman’s point seems to be that someone—whether alliance management, business development, or senior management—needs to be looking out for the strategic implications of alliance portfolio performance as a whole. As things stand, many of these executives “are not looking at the big picture. If you’re not looking at the portfolio overall, you’re not being strategic,” argued Twombly. Shuman, if anything, was even more blunt. “It’s incompetent management not to do it,” he said. “People who run an alliance function [often spend] too much time looking down at the individual alliances, and not enough looking up at the whole portfolio.” Twombly stressed the efficacy and bottom-line impact of looking at alliances in this more comprehensive way. Strategic Alliance Magazine

“Once you know what you want alliances to do for you, then you can appropriately evaluate who are the right potential partners,” she said. “If you are an alliance manager just stepping into a portfolio, you have to deal with what’s there, which may or may not have been created from a strategic perspective. With new companies stepping into a business or partnering for the first time, you do have the opportunity to create a strategic approach. And portfolios are meant to be pruned. If you’re at the point where you’re growing it, you can choose to plant the seed or not. It should all be purposeful. If you look at

your portfolio and see alliances in there that either are consuming greater resources than they deliver in value, or otherwise not adding to achieving your purpose, you should consider [terminating them].” As more companies develop more (and more diverse) portfolios of alliances, adding complexity and risk as well as potential reward, there will be a greater need for more holistic, strategy-oriented views on alliance portfolios, such as Twombly, Shuman, and others suggest. However the trend goes, alliance managers will no doubt play an increasingly important role in this process. n

Two Views on Alliance Portfolios In Jeff Shuman and Jan Twombly’s view of the process, managing an alliance portfolio comes down to several key components:

looked at portfolio management models specifically aimed at innovation. How do 2. Decide Profile Criteria— companies balance different types of alliAnalyze the alliances in a portfolio for value and complexity (i.e., risk); not just ances? Some are aimed at exploring more financial value, but the role of alliances radical innovation, others at exploiting – Assessing the strategic contribution of incremental innovation. We find they use in achieving a company’s strategy. each alliance within the portfolio and of one of three models to balance these two the portfolio overall 3. Score and Map All Relationships— innovation types: Score and map by value and complex– Managing the composition of the – A temporal model, where they ity on a 1–5 scale, using the criteria portfolio to ensure that the right sometimes focus on alliances aimed at from #2 to create a Value Complexity partners are in place bringing innovations to the market and Profile Scorecard for each alliance, and – Leveraging value-creating opportuniafter some years they change their portthen a Value Complexity Matrix for the ties within the portfolio folio towards more innovative alliances overall portfolio. – Allocating alliance management – A separation model, in which the resources among the various individual 4. Analyze and Manage the Portfoalliances that bring the innovations to lio—Take the average of Management alliances the market are managed separately from Complexity and Potential Value scores – Considering the portfolio implications those exploring radical innovation (e.g., of all alliances in a portfolio to generate of new partners the R&D alliance portfolio is separated a metric for Return on Collaboration. from the marketing/sales portfolio) – Identifying systemic management (RoC = Potential Value divided by Manand organizational challenges that are – An integrated model, where comagement Complexity x 100%) preventing individual alliances from panies try to balance all requirements in 5. Define the Necessary Capability achieving intended value one alliance portfolio. and Allocate Alliance Manage– Identifying market or technology ment Resources to the Portfolio— “The latter [has] become more popusegments that will require future lar, but also has the highest demand Allocate more resources to complex alliances to maintain corporate on management. As you can see, our (high-risk) alliances to realize their competitive advantage approach to portfolio management is potential value, while cutting back In addition, Twombly and Shuman offer a resources to alliances that either don’t more about creating synergy between five-step process for assessing an alliance need it (because they’re more transac- alliances. The main conclusions are: portfolio: tional) or should be terminated. – Portfolio management has a positive effect on innovation, 1. Determine Scope—Which alliances A different perspective is represented by are in or outside of a particular portfolio? Alliance practitioners can start with an “excavation project” to scope and inventory their alliances (by business unit, geography, product family, etc., or function/type of alliance: e.g., research,

Quarter 3, 2012

development, commercial, etc.).

the work of Ard-Pieter de Man and his Dutch colleagues. “Our approach to portfolio management is quite different from, and complementary to, [that of The Rhythm of Business],” de Man explained in an email. “We have

– But companies differ widely in the extent to which they coordinate between alliances; – Companies use three models to manage their portfolios and to meet the demands of innovation.”


Don’t Just State the Obvious

Find the deeper insights all alliance managers need to succeed – in ASAP’s Fourth State of Alliance Management Study It’s clear that the alliance management profession has come a long way since the first ASAP State of Alliance Management Study in 2001. But the what, how, and why of our progress as a profession – and especially where we’re headed and what we need to do to improve – are not so obvious. Deeper answers require deeper research and analysis. With three more editions of the study conducted over the course of a decade, our fourth study, The State of Alliance Management: Past, Present, Future, provides this unparalleled and unprecedented depth. Contact ASAP today to order copies for you and your colleagues. Inside this crucial survey of 272 individuals representing 230 companies across the world, you will find powerful insights about: n Alliance success rates – and factors that influence outcomes n The evolution of alliance professionals and roles n The effectiveness of proliferating alliance tools n Growing focus on the importance of alliance culture

Order your copies today!

The State of Alliance Management: Past, Present, Future is $59.99 for ASAP Members and $99.99 for nonmembers. Contact Pam Goodell at +1 781-562-1630 ext. 202 or to get your copy today! 24

960 Turnpike St, Canton MA 02021 USA Tel: +1- 781-562-1630 Strategic Alliance Magazine

E ditorial

S upplement

Governance by Design

How Well-Established Principles and Practices Set The Stage forAlliance Success By David S. Thompson, CA-AM, and Steven E. Twait, CSAP

Strong governance and operating structures form the basis of all successful alliances. As a system of processes that enables partners to effectively and efficiently make decisions and coordinate work, governance is central to all alliance management work. While simple in theory, the subject of governance has generated a wide range of disparate views and complex theories. Ultimately, the scope of governance activities is vast—managing an alliance’s start-up, anticipating and resolving issues that arise, and handling the administration that surrounds an alliance’s dissolution. The first in a four-part series on alliance governance, this article offers an overview of the most important elements to consider when designing structures and processes to guide a partnership throughout its life cycle. The authors offer practical strategies and tools that alliance professionals can use to anticipate and mitigate risk from multiple sources, including interpersonal relationships, business risk, and legal uncertainties. By designing and implementing a strong, principle-based system of governance, alliance professionals can establish a lasting foundation and a flexible framework that serve as integral components of a partnership’s ultimate success. Quarter 3, 2012




In this article and in the three to follow, we have chosen to focus on a straightforward, practical approach to governance—concepts and ideas that have been proven effective in the fires of actual implementation.

potential partner. These principles are the building blocks upon which alliance partners can construct a collaborative governance structure.

Mutual Goals

To be effective, governance processes and structures must: 1. Effectively implement the purpose of the alliance—that is, to maximize the value of the asset—in accordance with the letter and spirit of the parties’ agreement 2. Be implementable, operational, functional, and efficient 3. Create focus, alignment, and accountability within the alliance and among the partners 4. Require parties to assign employees with authority to commit resources to agreed-upon plans 5. Be able to execute a consistent worldwide strategy in development and commercialization if the relationship is global in nature

Before setting out to define a system of governance, the partners must first come to agreement on mutual goals. We believe that alliance governance must: — Protect each partner’s interests — Establish management oversight to allocate necessary resources — Provide mechanisms to mitigate the human and business risk as well as the legal uncertainty that is naturally created in the process of bringing parties together — Maintain a strong decision-making framework at each stage of the alliance’s life cycle

These are the core principles of governance design:

Phased Approach Effective governance bodies anticipate the three basic phases of an alliance: — Start-up: a positive yet stressful time spent getting an alliance up and running — Steady State: boredom interrupted by sheer terror when the unexpected occurs — Wind-down: a stressful time in which many people exit the alliance and many hours are spent untangling intellectual property


Discontinuation Activities

Manufacturing Issues

FDA Action

Contract Re-Negotiation

Start-up Activities


Unforseen Alliance Work

Fundamental OAM Activities (Agenda, Alignment, Governance) TIME

Figure 1 illustrates the flow of alliance work during each stage. Before identifying and addressing the specific governance activities needed at each alliance stage, it is helpful to have a common vocabulary and agreed-upon design principles that can be used when beginning discussions with a 26

Principled Design

Maximize the Value of the Governed Asset To achieve the objectives spelled out in the partnership agreement and to create value from a project or asset, each partner must balance the priorities that compete within their organization with those created by the agreement. It is the responsibility of the members of the governance organization to ensure that both the letter and the spirit of the contract that binds them are met, specifically as it pertains to value creation. Make the Governance Structure Implementable, Operational, Functional, and Efficient Any good design must fit the needs of the participants who are actively involved in the act of governing. By definition, effective governance leaders hold power within their organizations, and they must be able to exercise influence both within their company and within the governance structure created by the alliance. This inherent tension requires that organizational design—including timing, length, and location of activities—must be administered so that it protects each governance participant’s time, health, and general well-being. This helps ensure the sustainability of the governance structure. For the sake of efficiency, governance meetings should be structured to keep topics relevant to attendees. Strict meeting discipline must be enforced (and even welcomed) to ensure that meetings meet their objectives and do not Strategic Alliance Magazine


TERMS OF THE TRADE: The senior level team/committee meets once or twice per year. Its primary purpose is to build senior leadership relations and to resolve disputes that cannot be solved at a lower level. This group is small—usually consisting of two to four persons who are official members. While some companies believe that majority voting should be used at this level of decision this level of decision making, our experience has shown that it is better to have one person per company designated as accountable, and that this executive must speak on that party’s behalf. The primary governance team/committee meets regularly and deals with the major decisions facing the newly

created alliance. This group approves budgets and strategy and makes tough makes tough trade-off decisions. Each company has one chair who speaks on its behalf. The working team/committee does the work of the alliance. The team is organized into working groups and task forces that are focused on specific areas relevant to the project. Each of the teams or task forces is chaired by one representative from each company, unless the working chairs have agreed otherwise. Each company has one chair who speaks on its behalf. The working group focuses on a specific area or concern such as medical, marketing, manufacturing, and so forth. The task force operates similar to a

in themselves become a distraction to maximizing asset value. To avoid unnecessary stress, disputes must be resolved quickly at the lowest level possible. Disputes that cannot be resolved in a timely manner should be escalated and rapidly resolved. After a dispute, after-action reviews should be conducted, with feedback on the effectiveness and appropriateness of dispute resolution provided to those involved. From time to time, it may also be necessary to reevaluate the governance design and make adjustments that reflect the reality facing the participants. Changes in the business or regulatory environment or progress in the state of an asset’s life cycle may necessitate a range of modifications. Create Focus, Alignment, and Accountability Within the Alliance, Ensure Governance Members Have Authority to Commit for Their Company When two or more companies join together to create value from a project or asset, one of the greatest risks is creating an environment in which responsibility is diffuse and participants become distracted—both by the politics of their own company and by those of the newly created governance organization. To prevent this situation, good governance design must foster and maintain focus, alignment, and accountability Quarter 3, 2012


working group, but it has a fixed point at which it dissolves. Nemawashi governance, borrowed from the Japanese, is an intra-company team that meets prior to major governance meetings, with the goal of ensuring that the company is aligned regarding specific decisions to be made about the asset. This team’s primary objective is to solve intra-company conflict prior to meeting with a partner. This team is responsible for connecting to come to an agreement about all necessary decisions, including resource commitments. This team usually includes the members of the primary governance team as well as other key decision makers and resource holders that influence the asset’s fate within the company.

within the partnership. Experience has demonstrated that this usually translates into having only one person from each company accountable for each level of governance. This person may have support from additional team members from their home organization, but when a decision is to be made, those designated as accountable are the only ones who can officially commit on behalf of their companies. The other team members have the responsibility of keeping their respective leadership informed and up to date on the issues facing the alliance. They also are responsible for questioning and calling attention to any deviations in focus and alignment that would interfere with maximizing the value of the asset being governed. The designated members of the alliance’s governance


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structures also must have the power to commit resources to the agreed-upon plans and to create focus and alignment within their home organizations with regard to the execution of those plans.


Design Governance to Mitigate Risk at Every Alliance Stage In a previous article (High Risk to High Reward: How to Dig In, Solve Problems, and Create a Valued Alliance Management Function,” Strategic Alliance Magazine, Q3 2011), we covered the sources and types of risk that are generated by any partnership. The next three articles in this series will discuss the ways in which good governance design can facilitate success by anticipating and mitigating problems in all three phases of an alliance’s life cycle—Start-up, Steady State,

Execute a Consistent Global Strategy in Development and Commercialization Governance members who participate in multinational agreements are accountable for committing to and ensuring the execution of global strategies in development and commercialization. In other words, the internal negotiations that need to occur within FIGURE 2: a company to align its various regional Governance Structure Options components to the agreed-upon global Co-location strategy are the responsibility of the Communication Operating Alignment respective governance members. Decisions taken at governance meetings carry with them the expectation that re or JV both companies are aligned and will be tu al ab n L u e f rt tV Vi no focused on implementing the decision. in io Jo

Design Options When you have the opportunity to build an alliance from the ground up, never lose sight of the basic precept that form should follow function. Alliance governance structure should be based on what is needed to maximize the value of the asset as well as the characteristics, capabilities, and strengths of the partner companies. While a tendency exists to complicate both process and structure, in many cases, simpler can be better. The range of governance options (see Figure 2) includes: — Joint venture — Virtual joint venture — Division of labor — Hybrid teams — Functional pairs

vis Di

Joint Control Oversight Ease of Setup

s am e T id br y H

nc Fu

irs Pa l na tio

and Wind-down. The articles will reveal the principles of constructing and maintaining governance structures that alleviate human risk, business risk, and legal uncertainty.

Summary Develop a common lexicon for talking to your partner about governance design. Spend sufficient time to understand the types of issues your alliance will be facing before locking in on a structural design. In governance, having a single point of accountability for each partner has many benefits. Structure is important, but process is more important— form should follow function.

David S. Thompson, CA-AM, is chief alliance officer at Eli Lilly and Company and is a member of the ASAP board of directors. He can be reached at, +1- 317-277-8003. Steven E. Twait, CSAP, is senior director of alliance management and M&A integration at Eli Lilly and Company. He can be reached at, +1-317-276-5494.

Quarter 3, 2012


The 2012 ASAP BioPharma Conference Comes tothe Boston Area Nov.15-16 Creating Alliance Culture, New Types of Alliance Partners, and Hands-on Skill Building Highlight Agenda By ASAP Media Staff

THE RECENT BIO INTERNATIONAL CONVENTION IN BOSTON WAS THE SCENE of an unprecedented number of announcements of new partnerships and collaborations. Many CEOs, university leaders, and government officials enthusiastically paid tribute to how essential collaboration is to the industry. On November 15 and 16, the leaders charged with making sure these deals deliver the value intended will return to metro Boston for the 2012 ASAP BioPharma Conference, to be held at the Charles Hotel in Cambridge, Mass. As the only membership organization dedicated solely to advancing the profession so that it meets the challenges of the business world, ASAP has once again distinguished its BioPharma Conference as the seminal event for alliance management professionals of all levels in the biopharmaceutical industry. In less than two days, participants hone their skills, discuss common challenges, and build their networks with many of the most experienced and respected experts and thought leaders in biopharmaceutical alliance management. ASAP’s 4th State of Alliance Management Study asserted that the culture of an organization is a key component of alliance success. Drawing upon that finding, the theme of the 2012 ASAP BioPharma Conference is “Creating a Culture of Alliance Excellence.” As alliances and collaboration become ever more central to biopharmaceutical business models, what role should alliance professionals 30

play in leading the transformation of their companies’ cultures and ways of working to ensure that their significant financial investments bear fruit? Despite all the wonderfully supportive messaging coming from the CEOs at the BIO Convention, many alliance managers—especially those who have been in this field for some time—are wondering aloud if these CEOs are going to get behind their words and truly commit to alliance management, both in their actions and financially. Culture starts at the top, so the conference’s opening plenary session focuses on words of wisdom from alliance management veterans who have learned what to do—and what not to do—to be relevant to the C-suite, speak CEOs’ language, and think strategically and entrepreneurially about the alliance. Speakers in the plenary session include: Strategic Alliance Magazine

n Mike Leonetti, CSAP, former ASAP chairman and head,

healthcare partnerships at Boehringer Ingelheim.

n Nick Palmer, longtime ASAP board member and renowned

strategy consultant. n Matt Johnson, chief alliance officer at AbbVie (soon to be the new name for the current Abbott Laboratories Proprietary Pharmaceuticals Division). n Susan Sullivan, a former industry entrepreneur who now leads Immunogen’s alliance management group. As of press time, the keynote speaker for the conference had not been confirmed, but without naming names, it will be an accomplished senior biopharma executive who has shown the industry how essential alliance management is to company success—and is actively working with the alliance management group to achieve it. The afternoon of the 15th and morning of the 16th feature two concurrent tracks: One track covers both days and focuses on developing core alliance management skills and creating excellence in your alliance management practice, including learning some of the unique aspects of alliances with new types of partners that are emerging in the industry. The second track on Thursday delves deeper into the show’s main theme by examining how to best create those alliance culture building blocks, working with key internal partners to realize alliance success. On Friday morning, this track focuses on personal development—the “soft skills” that can distinguish a truly influential alliance manager and help advance that professional’s career into senior leadership roles. Research has shown that alliance managers need a very similar skill set to that of CEOs. After all, who else but the CEO has the responsibility to look across functions and perhaps divisions, to see the big picture and understand what must be done to operationalize it? Quarter 3, 2012

The biopharma industry has long been a leader in the alliance management profession, and companies that until now have not embraced the need for the discipline are jumping on board in ever increasing numbers. Many of the sessions are designed for these very people who are beginning to embrace what the discipline can do for their companies. In the “Developing the Muscle” track, for example, experienced professionals will explore ways to frame the training of new team members. Topics covered include:

Culture starts at the top, so the conference’s opening plenary session focuses on words of wisdom from alliance management veterans who have learned what to do— and what not to do. n Establishing aspirations for your alliance management practice,

delivered by Jeremy Ahouse, CSAP, Ph.D., director of strategic alliances for Novartis Institutes for Biomedical Research. n Determining what your alliance management practice should deliver as services, with the pioneering team from Eli Lilly and Company. n Aligning compliance and financial processes with your partner, a critical and often overlooked aspect of alliance management. This session is led by Dr. Varavani Dwarki, CA-AM, vice president of alliance management at Sanofi. n Resetting long-lived alliances. Karen Denton, CA-AM, director of alliance management for Bayer Healthcare, and Yumi Nakagawa, senior director of alliance management at Onyx Pharmaceuticals, take us through their journey. 31

n The intricacies of designing and managing

effective governance, which will be discussed by a panel of experienced alliance management professionals.

Alliance professionals who have previously worked on traditional asset development and commercialization partnerships have a tremendous opportunity to apply their knowl- The Charles Hotel edge to alliances with several emerging new types of partner organizations, including: n Alliances with contract manufacturers, featuring a panel of CMO and biopharma executives and led by Christine Carberry, CSAP, principal of Carberry Consulting. n Alliances for open innovation, with Christian Prothmann, CA-AM, director of external projects for new opportunities at AstraZeneca. n Alliances for biosimilars. A panel of alliance executives engaged in this new world, which often involves very untraditional partners, will be led by John Buckingham, CSAP, founder of Buckingham Alliance Partners.

The ASAP BioPharma Conference will focus not only on the business skills and processes of alliance management, but on developing sophisticated soft skills and career management techniques. In some companies, the alliance management group is directly assigned to these relationships; in others, they are consulting with their colleagues in affected functions to develop their skills and employ the tools and processes of alliance management. Alliance managers spend as much time working internally as they do working with their partners. The second track on Thursday afternoon focuses on building those key relationships that allow alliance managers to influence culture and grow the effectiveness of their alliances. Topics include: n Working with your new best friend—the project or program manager. Lena Frank, CA-AM, director of alliance management for Acorda Therapeutics, leads this discussion of effective practices that ensure alliance managers and project/program managers are joined at the hip. n “Get Me Legal!” Brooke Paige, CSAP, founder and principal of 7ContinentsCollaboration, and Christine Heron, Esq., legal deputy for EMEA at Mylan Pharmaceuticals, explore how to make the relationship with your legal team one of interdependence and efficiency. n Building the cross-functional team essential for alliance success. Nicole Lucarelli, associate director of strategic sourcing for Human Genome Sciences, explores what alliance managers can 32

learn from other groups within the company that manage external relationships. n Building on the conference’s main theme, Stu Kliman, partner and founder of Vantage Partners, will offer his advice on how building joint leadership of an alliance can lead to better outcomes. Alliance management is part “art” and part “science.” While most of the BioPharma Conference focuses on the business skills and processes of alliance management, ASAP is committed to helping its members develop their individual capabilities and their careers as a whole. Accordingly, the second track on Friday morning is dedicated to developing sophisticated soft skills and career management techniques. This track introduces several new faces to ASAP. n Influence is essential to alliance management. Barry Dornfeld, principal, and Nat Welch, senior manager at the Center for Applied Research (CFAR), a consultancy associated with the Wharton School of Business, will conduct a 90-minute mini-workshop on learning to use key frameworks rooted in psychological research to hone your influencing abilities. This workshop takes the art of influence and makes it a science. n People change behavior through stories, not data. Communication expert Trisha Griffin-Carty, president of Griffin-Carty Communications, will teach the sophisticated communication techniques behind storytelling. n Alliance management can be a challenging occupation. Executive recruiter Peter Meder, president of Peter Meder & Company, will help attendees build a “career balanced scorecard.” To wrap up the conference and get alliance professionals thinking about what is next, Friday afternoon’s closing plenary focuses on the “Future of Alliance Management.” Jeff Shuman, CSAP, Ph.D., and Jan Twombly, CSAP, principals of The Rhythm of Business, will lead an interactive discussion of the results of the 2012 edition of their study, The Practice of Alliance Management in the BioPharma Industry. Endorsed by ASAP and in its second iteration, this study is the only one of its kind that looks exclusively at the direction of the profession in biopharma. All ASAP conferences include many opportunities for networking as well as breakfast and lunch each day, food and drink during breaks, and a reception Thursday evening. Located in the heart of Harvard Square, the Charles Hotel is home to multiple restaurants, including the award-winning Rialto, and counts several great eateries of all price points and cuisines within walking distance. Registration for the 2012 ASAP BioPharma Conference is still open to all professionals looking to gain valuable knowledge that will translate into career success and return on investment for their strategic alliances. To register, visit Strategic Alliance Magazine



ceo forum

Q&A with Daniel J. Abdun-Nabi, President and CEO, Emergent BioSolutions Strategic Alliance Magazine: Emergent made a big announcement in the middle of June about a new partnership with the Biomedical Advanced Research and Development Authority (BARDA). Tell us about this partnership and its significance to Emergent’s corporate strategy. Daniel J. Abdun-Nabi: Emergent was selected by the U.S. government to be one of three Centers for Innovation in Advanced Development and Manufacturing (ADM), to develop and manufacture pandemic flu product candidates as well as other critical medical countermeasures that target CBRN (Chemical, Biological, Radiological, and Nuclear) threats. This partnership with the government has an initial period of eight years and could potentially extend up to 25 years. It is quite an honor and really is a tribute to the expertise that Emergent has in product development, manufacturing, process and analytical development, and regulatory in this rather unique area of medical countermeasure development. This award also reflects our decades-long experience in government contracting and government relations. This is truly an exciting partnership, which translates into developing critically needed medical countermeasures while at the same time providing opportunities to grow our employee base, expand our revenue opportunities, as well as enhance our portfolio of product candidates and “commercializable” products. Quarter 3, 2012

SAM: You recently succeeded Fuad El-Hibri. Have you made any changes in Emergent’s philosophy and approach to alliance management strategy and execution since taking over? Daniel J. Abdun-Nabi: The alliance management function has become more formalized as we have grown and as we have taken a closer look at what alliance management can do for Emergent. Alliance management has matured over the course of the last five years, more so in the last two years, as we’ve set up processes and more formally adopted mechanisms by which we can manage our alliances across the whole portfolio of relationships, whether it’s customers, suppliers, or partnerships through joint ventures, or with government organizations, notfor-profit organizations, or universities. It is a broad spectrum of relationships that we try to manage through the alliance management program. So while it’s not a change in strategy, I would say it is a maturation of a process that began a number of years ago. We learn as we go and we understand what works and what doesn’t work with particular categories of alliance partners. Then, we try to build on those experiences and drive value for both partners. This approach is valuable as an alliance is initiated and as it matures. Ultimately, parties may decide to conclude a relationship, and we also want to be very

effective in managing our alliances even as we go our separate ways. SAM: Do you anticipate a shift in course at all, or do you plan to continue in the direction the alliance management function was moving when you took over?

Partnering is a critical aspect of our growth strategy, whether it’s with NGOs, universities, commercial partners, or government organizations. Daniel J. Abdun-Nabi: We will build on our expertise in alliance management and expand the program to capture an increasing number of important relationships. We started several years ago with just an alliance management pilot program, and since then it has grown to more than a dozen partners, if you will, or relationships that are now part of the program. I see that growing further as time goes on. Partnering is a critical aspect of our growth strategy, whether it’s with NGOs, universities, commercial partners, or government organizations. As the number of partnerships increases, the team’s view here at Emergent is that alliance management is a major component of enhancing the likelihood of success and securing maximum value for all participants. 33

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SAM: You mean making sure success is not just signing the deal, but also driving alliances to fruition thereafter? Daniel J. Abdun-Nabi: Yes, and to me that is the real value of alliance management. It’s not so much identifying, structuring, and completing the deal initially, it’s managing the relationship to ensure that there’s open communication, that the decision making is robust and complete, that the parties have a shared vision of what they expect out of the alliance and how they want to do business as a team, as partners, and that in the event that things go awry, there’s an effective way to resolve issues before they become acute and poison the relationship. To me, alliance management is more about the life of the partnership than the birth of the partnership. SAM: Emergent has been very active with initiatives involving biological crises, and the company’s BioDefense division has worked with the U.S. government extensively to combat potential threats. (The aforementioned BARDA announcement is a recent illustration of this.) What are the unique needs of a relationship with the federal government in terms of manufacturing, distribution, and other facets of an alliance with a branch of the United States’ bureaucracy? Daniel J. Abdun-Nabi: The alliances that we have in the BioDefense division, as well as in our BioSciences division, expand across multiple types of relationships. Clearly, we have relationships with our customers—in this case, the Department of Health and Human Services, which includes BARDA, the National Institutes of Health (NIH), and the Centers for Disease Control and Prevention (CDC). Historically, our customer [base] also included the Department of Defense. Quarter 3, 2012


From a customer standpoint, alliance management is absolutely critical. This includes understanding their expectations, allowing them to have visibility into our operations so we can work together if changes need to be made in any aspect of the relationship, understanding some of their sensitivities and how we need to be flexible to address those needs. Similarly, on the supplier side, we can’t do what we do as a single entity. We have numerous relationships that support many aspects of product development including clinical, nonclinical, and analytical development. We have a number of vendor and consulting relationships, and all of these are, in many respects, partnerships because we have to work together to ensure that what we ultimately deliver to the customer meets their requirements. We partner in ways that are unique because of the nature of our customer, which is the United States government. Then there are the more “traditional partnerships,” where we share risks, identify common goals, align our strategies to achieve those goals, apply resources in ways that are agreed upon and understood in advance, and provide managerial and directional guidance through commonly established and agreed upon mechanisms such as a board of directors, a steering committee, or a development committee. One example is our joint venture with the University of Oxford to further develop the most clinically advanced tuberculosis (TB) vaccine candidate. We have very important alliances with our clinical trial sponsors, Aeras, as well as with the Wellcome Trust and the South African TB Vaccine Initiative, which run the sites for our clinical studies. Our alliances in support of our TB vaccine have since expanded to include NIH and the European and Developing Countries

Clinical Trials Partnership (EDCTP), both of which are assisting us in advancing our TB program. The number of important alliances is far broader than what you might normally expect in a typical company, given the nature of our business and the way in which we go about doing our business.

To me, alliance management is more about the life of the partnership than the birth of the partnership. SAM: Do these relationships necessitate specialized experience or skills that may be different from the traditional commercial or clinical trial partnership? Daniel J. Abdun-Nabi: That’s a good point. The BioDefense and BioSciences alliance managers have common attributes in terms of capabilities. They are adept at managing long-term relationships, setting partner goals and objectives, and understanding how these affect the company, facilitating relationships at all levels within the organizations, communicating openly, working in a team environment, dealing with risk, and knowing when to escalate disputes and getting those resolved. When you get to the technical side, there are absolutely clear differences between an alliance manager working with the government agencies versus those working with a commercial partner or a university type of partner. When doing business with the government, you have to understand the specific environment that they operate under and the limitations of what they can do. There are Federal Acquisition Regulations and internal ethics rules that need to be complied with, and we need to understand those to ensure compliance. There are differences Continued on page 54 35

Worth Their Salt The Insurance Industry’s Early Adopters of Alliance Management Are Seasoning Their Plates with the Profession’s Tools of the Trade—And Folding Alliances into Their Companies’ Recipes By Jon Lavietes

FOR YEARS, SEVERAL BUSINESS UNITS WITHIN NATIONWIDE, the $18.6 billion insurance industry stalwart, had been successfully conducting single-faceted partnerships with companies of all sizes within and outside of its own industry. Around 2005, the company discovered that

different parts of

its organization had separate relationships with one of its partners.


Strategic Alliance Magazine

Insurance companies are now using alliance management practices more frequently and to achieve a variety of objectives.

Some of these divisions were unaware of the others’ activities with this partner, raising the specter of Nationwide’s looking slightly disjointed from the outside. It was at that juncture that the company realized it could be getting more from its relationships. But the question remained: how would they go about it? “We should probably develop an area that can not only help manage relationships across the enterprise, so we come across as a single company rather than various business areas that don’t seem to talk to each other. But also are there things we can do with this company we aren’t doing already?” said Natalie Kogan, CA-AM, associate vice president of the Strategic Partnerships Organization at Nationwide. Like Nationwide, the Chubb Group of Insurance Companies (Chubb) is no stranger to conducting individual collaborations. “Since 1882 Chubb has distributed our insurance solutions through independent agents and brokers to individuals and businesses,” said Stephen Goldstein, CA-AM, vice president and strategic alliance manager for commercial strategic marketing at Chubb. However, Chubb too started to sense a few years ago that it could get more from its partnering capabilities. “In 2007 as the economy struggled and its impact was felt in the property and casualty market, Chubb decided to invest in a dedicated alliance function to help achieve some of their business goals,” Goldstein continued. After identifying a few more existing partners who similarly touched multiple parts of the organization and offered tremendous new hypothetical possibilities, Kogan conducted extensive research into how such complex relationships were managed in the business world. Nationwide not only discovered a new profession, it learned the benefits of deploying the discipline, as well as the perils of rejecting its core principles. “If we are going to partner with other companies, there are best pracQuarter 3, 2012

tices for doing it, and there’s a risk if you don’t do it. Other companies have proven what happens when you do it right, [and] what happens when you don’t,” said Kogan. Thus, Nationwide’s alliance management practice was born.

Alliance Management Accomplishing Many Corporate Goals Although it is still far from widespread in the industry, insurance companies are using alliance management practices more frequently and to achieve a variety of objectives. Nationwide’s five-person alliance management practice facilitates go-to-market partnerships and alliances that round out its product set. For example, Nationwide partnered with NASCAR to be the organization’s official auto, home, and life insurance partner and bring its products and services to NASCAR’s loyal fan base. Another agreement allows the company to provide exclusive discounts to members of the National Council of Negro Women (NCNW). A partnership with Ohio State University led to the creation of the Nationwide Center for Advanced Customer Insights, as well as programs to support student-athletes and the Ohio State University Marching Band. Today Chubb’s Commercial Strategic Alliances practice focuses on three primary goals: 1) generate revenue, 2) reinforce brand awareness and demonstrate thought leadership, and 3) raise the level of strategic alliance competencies internally. For example, Chubb partners with the Association of Corporate Counsel (ACC) to market its Employed Lawyers Professional Liability insurance for in-house counsel. Earlier this year, Chubb formally announced an alliance with Vistage, a membership association that serves CEOs, in which it will deliver risk management education as well as customized insurance solutions to Vistage’s members. In addition to Nationwide and Chubb, USAA, a major insurer of veterans and military personnel, is an ASAP Global Member and has 37

Natalie Kogan, CA-AM, associate vice president of the Strategic Partnerships Organization at Nationwide.

Stephen Goldstein, CA-AM, vice president and strategic alliance manager for commercial strategic marketing at Chubb.

representation on ASAP’s board, while UnitedHealth Group and American Family Insurance are ASAP Corporate Members. In addition, insurance and wealth management services leader The Hartford has a small dedicated alliance management practice of its own, while Blue Cross Blue Shield of Florida and Nebraska have individual ASAP members.

The Challenges of Weaving Alliance Management into Corporate Culture Of course, establishing an alliance management practice that conceives of innovative initiatives and nets measurable results often takes a few years. To make it work, several parts of the organization have to have their oars in the water at the same time. Often, paddling in unison with a seemingly unorthodox new coxswain seems like extra and unnecessary work to the rest of the organization, especially when, on the surface, the ship seems to be sailing smoothly. Widespread adoption depends not just on instant initial success, but also on the ability to illustrate how alliance management tools achieved those results where business-as-usual could not. Identifying alliance management’s potential value to insurance companies is not so straightforward. Unlike other industries that have core business models that depend on products, services, or expertise from outside companies, such as biopharma and IT, insurance companies could conduct many of their key activities alone if they so chose. “It wasn’t obvious to many people at Nationwide that we’d need strategic alliances,” Kogan acknowledged. Although the insurance business paradigm doesn’t inherently contain a conspicuous hole clearly tailored for partnerships that’s as easy to spot as a tie-dye shirt at a bankers’ convention, shrewd industry players are finding areas where alliances deliver high value. 38

“What we discovered is consumers are more and more looking for something different or unique [and that] provides more value. Insurance is kind of a commodity. It’s really hard to differentiate. Are there companies out there that we can work with that can help us provide a unique offering, benefit, or value-add that we can’t do alone?” said Kogan, citing an example in which Nationwide coupled its protection offerings with a partner’s loss prevention product that targeted the same customer.

Encountering Early Resistance

However, insurance companies are right at home with their IT and pharmaceutical brethren in that they experienced mixed results when it came to making stakeholders outside the practice aware of the discipline and getting them to adopt the practices that will ensure they play their role effectively in each collaboration. As is common when IT alliance managers work with salespeople within their own organizations, sacrificing for the greater good is sometimes a tough concept to endorse for non–alliance managers. “Not all people have the same mentality—that a win for the relationship and a win for the partner is also a win for them, unless it really is a win for them. People get it for the most part, but it’s sometimes hard for people to accept when it’s not directly a win for Nationwide,” said Kogan. Add to the mix the many standard alliance management tools insurance companies like Nationwide have adopted—an alliance charter, qualitative and quantitative metrics (including health checks and partner satisfaction surveys), among other items—and the sales, service, distribution, and product team employees who work with Nationwide’s alliance management professionals might get the impression that unnecessary layers of red tape are being created for them.

Yes, Alliance Management Exists, and It Can Help You, Big Time

As with most things in life, people are only convinced once they see there’s great reward along with the additional responsibilities that come with employing the most modern partnering methods—in other words, that a fundamentally sound alliance capability brings a lot more than additional superfluous busywork. “I’m not adding to your plate, I’m putting salt on your food, so you’ll eat it faster,” Kogan explained. “I’m not adding a new project, I’m making your project better.” Strategic Alliance Magazine

Adoption of the processes tends to vary across organizations. Chubb augments a small core team of dedicated alliance professionals with a larger “alliance armada” of underwriters, product managers, and other staff. However, even the best tools will only go as far as whether and how those folks implement them. Chubb has been pleased with how its larger team has integrated these practices. “The alliance practice developed a workflow, best practices, and a toolkit to help our colleagues improve the development and management of our alliances. The Chubb global alliance team embraced the workflow and best practices which have helped us identify, evaluate, and launch alliances,” said Goldstein. Nationwide has also made progress in driving adoption, but again, not without resistance. Kogan said it is understandably hard to get people on both sides to break the habits formed using their own methods of creating offers, campaigns, and research and rebuild new processes that fit the needs of the joint relationship. “Those things are more complex when two companies come together. People start to get it, but you constantly have to repeat that message,” she said.

Standard Tricks Help Gain Acceptance

For Nationwide, its alliance management practice has relied on two tried-and-true methods of persuading skeptics to give it a try: 1) executive sponsorship and 2) internal promotion. The former was easier. “The senior leader behind this is very highly regarded. Another blessing for us is he has been promoting the value of what we do, encouraging areas to work with our team,” said Kogan. “Although there’s still much work to be done, his support made it an easier sell [within our organization] than I think it could’ve been.” Chubb has less need for backing from senior leadership thanks to “a strong culture of collaboration externally (with our distribution partners), as well as internally” at the company, according to Goldstein. Promoting the early customer wins—a staple element in IT alliance management—was a little trickier for Nationwide. The company was trying to show the value of alliance management during one of its earliest engagements, which proved difficult because both Nationwide and its partner were relatively new to the discipline. Ultimately, the company was able to see that early alliance through and demonstrate the value to those first participants, but it “was definitely jumping into cold water quickly,” according to Kogan. Quarter 3, 2012

Slow and Steady Progress It has taken some time, but Nationwide is making headway in its efforts. Although Kogan acknowledged that the degree to which others get the collaborative mindset varies from department to department, she insisted that many are experiencing firsthand how alliances can boost their results. “I’m very pleasantly surprised at how many people in areas who traditionally don’t work with other partners really get it,” she said. “It’s difficult but very rewarding when you get there and you’re actually helping them make their project go faster, and more successfully [working] with another company and [leveraging] the assets or capabilities you didn’t have.” For Chubb, success is simply in the hard numbers. “Chubb is pleased with the overall performance of the alliance initiative and that we’ve doubled our premium generated from our alliances since 2007,” said Goldstein.

Neophytes Bring Hurdles, Possibilities Of course, as the insurance industry’s early adopters hone their craft, they will be dealing with many companies that still have either not heard of the profession or simply never recognized the need for it in their own affairs. This creates obstacles or opportunities, depending on whom you ask. “Now, our biggest challenge is driving the adoption of our newly launched toolkit for use with our alliance partners, some of whom may be less experienced with the benefits of alliance governance process and techniques,” said Goldstein. “We’re teaching [our partners] how to have the capability to do something they didn’t realize they needed to do or could be better if they did,” said Kogan. “We put it on a silver platter.” How do you get the rest of the industry to find alliance management palatable? Pass the salt. n


You are reading the Limited Edition of Strategic Alliance Magazine, the magazine of the Association of Strategic Alliance Professionals. The printed magazine is mailed free to all ASAP members and Sponsors and is also available as a paid subscription. The complete PDF is available to members by logging in to For Membership and Sponsor information email or call +1-781-562-1630 ext. 200


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E ditorial S upplement strategic alliance magazine | special focus | I T

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Changing the Channel You are reading the Limited Edition of Strategic Alliance Magazine, the magazine of the Association of Strategic Alliance Professionals. The printed magazine is mailed free to all ASAP members and Sponsors and is also available as a paid subscription. The complete PDF is available to members by logging in to For Membership and Sponsor information email or call +1-781-562-1630 ext. 200


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You are reading the Limited Edition of Strategic Alliance Magazine, the magazine of the Association of Strategic Alliance Professionals. The printed magazine is mailed free to all ASAP members and Sponsors and is also available as a paid subscription. The complete PDF is available to members by logging in to For Membership and Sponsor information email or call +1-781-562-1630 ext. 200

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strategic alliance magazine | special focus | I T

You are reading the Limited Edition of Strategic Alliance Magazine, the magazine of the Association of Strategic Alliance Professionals. The printed magazine is mailed free to all ASAP members and Sponsors and is also available as a paid subscription. The complete PDF is available to members by logging in to For Membership and Sponsor information email or call +1-781-562-1630 ext. 200


Strategic Alliance Magazine

strategic alliance magazine | special focus | I T

You are reading the Limited Edition of Strategic Alliance Magazine, the magazine of the Association of Strategic Alliance Professionals. The printed magazine is mailed free to all ASAP members and Sponsors and is also available as a paid subscription. The complete PDF is available to members by logging in to For Membership and Sponsor information email or call +1-781-562-1630 ext. 200

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Strategic Innovation Partnering: The Internet of Everything Information Technology Is Permeating Just About Every Industry in the World Today, and Alliances Are Forging the Path for This Convergence By Norma Watenpaugh, CSAP

THERE IS A CONVERGENCE OF TECHNOLOGIES that is reshaping our world, yet there is not one word or phrase that captures it all. A colleague of mine coined the acronym COMBS, which decodes into Cloud, Open, Mobile, Big Data, and Social. Some call this a “perfect storm� of technologies. But the impact of this storm is not limited to the world of IT. The real story is how this technology is enabling innovation across many industries and forging nontraditional alliances between technology companies and industry leaders.


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S T R AT E G I C A L L IA N C E M AG A Z I N E | S P E C I A L F O C U S | I T As we evolve into a society of complete connectedness— the Internet of everything—new opportunities arise to better manage our infrastructure and industries. Computer technology is embedded in our cars, buildings, schools, hospitals, energy grid, financial system, agriculture, and transportation systems. The instrumentation and networking of these “things” generates a tremendous amount of data which can be used to understand how to lower costs, reduce waste, and provide new and better services to users. Leading this wave are IBM’s Smarter Planet initiatives, which began in 2008 in anticipation of the convergence of these new technologies, but also as a means of finding new markets for growth through innovation. Smarter Planet requires a whole new set of partners. IBM’s traditional technology partners are still an integral part of the technology solutions in this new Internet-enabled world; however, the development of these solutions also requires industry expertise, so IBM is partnering with energy companies, construction and facilities management organizations, medical equipment manufacturers, and others. These new partners bring to the table both customer relationships and an understanding of the tough problems they face. The payment industry is also in the vortex of this perfect storm. Cash is disappearing as a method of payment; so are paper checks. In their place, alternative online and mobile payments are emerging and changing the competitive landscape with new entrants such as Google, Amazon, and PayPal. PayPal was an early pioneer of payments for online merchants and eBay, yet it continues to innovate and partner to provide payment services for nonretail online services such as event ticketing, medical payments, vacation rentals, and virtual goods (e.g., online games such as Farmville). In its efforts to achieve payment ubiquity, PayPal has built a diverse partner ecosystem to drive growth through innovation in payments. “PayPal is committed to building a thriving ecosystem of valued partners and solutions to secure our customers’ success, choice, and investment in PayPal,” said Christine Hansen, director of global strategic alliances at PayPal. Through partnerships, PayPal is enabling electronic wallet payments in traditional retail and consumer services through point-of-sale devices and mobile devices. PayPal recently announced strategic alliances with top point-ofsale (POS) companies such as Verifone, which promise to put PayPal at every brick-and-mortar checkout. Earlier this year, PayPal formally unveiled a new serQuarter 3, 2012

vice made possible through relationships with TiVo and Comcast called “T-commerce” that allows consumers to make interactive purchases directly through their TVs. It will also enable secondary purchases of merchandise through smartphones and tablets, as it has been shown that two out of three mobile shoppers are using these devices while watching television.

Buildings are becoming increasingly complex—full of networks, sensors, digital controls, and other electronic technologies— all designed to make them more efficient, comfortable, and safe. PayPal’s strategic relationship with Facebook now enables you to send money to friends and buy Facebook credits. Once upon a time, banking at your grocery store was a novel experience. Now, it may not be too far in the future when you will be banking with Facebook or Google.

Creating New Services in Mature Industries The partnering strategy of Johnson Controls, a 125-year-old building efficiency solutions company, is another example of innovation through technology alliances. Buildings are becoming increasingly complex—full of networks, sensors, digital controls, and other electronic technologies—all designed to make the building more efficient, comfortable, and safe. Johnson Controls has more than 30 partners, numerous subcontracting partners, and two major strategic alliances, with Cisco and IBM. With the former, Johnson Controls integrates Cisco’s network infrastructure and converged systems such as Unified Communications into buildings and enterprises. Johnson relies on IBM to manage complexity and provide its data analytics expertise. “Our relationship with the IT community enables Johnson Controls to bring new innovations to the way buildings are designed, built, and managed,” explained Steve Cory, director of strategic alliances at Johnson Controls’ Building Efficiency Systems. These technology alliances are bringing innovative solutions to a very mature market—construction and facilities management—causing disruptive change in how companies compete.

Managing Complexity A number of factors are driving these new relationships. The real estate crash and the recession made it 51

strategic alliance magazine | special focus | I T imperative to look for other avenues to generate business. Meanwhile, the green business and smart energy movements have encouraged companies to respond to social values, but these initiatives also represent smart moves from a cost reduction standpoint. For example, power and cooling are significant budget line items in facilities management.

Building owners, facilities managers, executives, and real estate developers are looking for new innovations in this mature market to give them buildings that work more efficiently, sustainably, and profitably while providing comfortable, safe, and productive environments. Buildings represent 42 percent of global energy usage and therefore have incredible potential to conserve energy and provide tremendous cost savings. Building owners, facilities managers, executives, and real estate developers are looking for new innovations in this mature market to give them buildings that work more efficiently, sustainably, and profitably while providing comfortable, safe, and productive environments. Johnson Controls supports a three-million-squarefoot facility in Rochester, N.Y. Millions of data points are collected in real time from sensors throughout the building—thermostats, power, utilities, security, and fire suppression. This flood of data requires heavyduty analysis to manage the environment, security, and safety of the inhabitants. For example, the facilities management system can sense whether a room is occupied and adjust temperature or security measures accordingly.


facilities, makes a compelling value proposition to our customers.”

Adapting the Partnering Model While these strategic cross-industry alliances are driven by innovation, providing new services to consumers and customers and new revenue streams to the partners, they also introduce new ways of thinking about structuring partnerships and challenge alliance managers to be even more skilled at their craft. One of the obvious challenges lies in the differences in the business models, culture, and selling style between a 125-year-old company such as Johnson and its IT partners. Where a technology company is accustomed to two-year product cycles and even shorter sales cycles, Johnson is used to three- to five-year sales cycles for new construction and the lifespan of a typical commercial building. ”Constructing and managing buildings are complex engagements requiring multiple contractors, including traditional plumbing, electrical, and mechanical services. Now we have had to adapt by being a technology contractor as well,” said Cory. Adding IT to the mix of mechanical and electrical services means new stakeholders, competition, and differences in go-to-market strategy and tactics. Some of the challenges can be as simple as the lack of a common vocabulary. “Security” to a facilities management company means access control, surveillance, and intrusion detection—physical security. “Security” to a Cisco or IBM means protecting data or the network as a whole. It often takes awhile to realize you are using the same words and meaning different things, which initially creates communication obstacles across the partnership.

Adding IT to the mix of mechanical and electrical services means new stakeholders, competition, and differences in go-to-market strategy and tactics.

There is also a challenge in selling collaboratively. Johnson Controls is accustomed to occupying the prime contractor role, managing multiple subcontractors. Partnering with equals is a new business model for the company, and it has had to collaborate in defining the right rules of engagement.

This is the job of Big Data and the expertise that IBM brings to the challenge of facilities management. “IBM is a key partner for us in developing new and better ways to serve our customers,” said Cory. “Their software helps us automate complex processes which, when combined with our subject matter expertise in

“Regardless of how many vendors are involved, you must always present a unified team and perspective to the client,” said Jay Ennesser, CA-AM, vice president of global alliance solutions for IBM. “Sometimes the lines are clear and other times it is more difficult. But collaborating and investing the time to plan the role each business partner will play in advance is absolutely critical to success.” Strategic Alliance Magazine

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Navigating Disruption Innovation partnering can be more complex because you are introducing change, some of which is highly disruptive. These cross-industry alliances can create new business models and revenue streams, while at the same time destroying old ones. They require the skills of an innovator—owning the vision, change management, and culture change. You also have to broaden your view of what an alliance is and be prepared to orchestrate an ecosystem of partnerships. Here are a few guidelines for managing these complex alliances: n Be quick to recognize trends and act upon them strategically before your competitors. n Invest heavily in training and workforce developQuarter 3, 2012

ment to adjust and adapt to the new systems. n Apply change management techniques throughout the organization to support the new strategy. n Assemble and manage ecosystems that complete the strategic vision of the new customer value chain. n Norma Watenpaugh, CSAP, founding principal of Phoenix Consulting Group, is an acknowledged industry expert in partnering best practices and has had extensive experience in partnering, alliances, and channel development. Her 25 years of professional experience includes executive positions at Sun Microsystems, Amdahl Corporation, and BEA Systems. She is also an ASAP board member and chair of the organization’s Knowledge Base and Research Committee. 53

CEO Forum Continued from page 35 between Contracting Officer versus Project Officer authorities that have to be understood and respected. In a corporate or university partner setting, it’s possible that the rules and limits around decision making may be more flexible, that roles and responsibilities may be more fluid, and how issues are resolved may be a bit less formalized.

We think there’s a lot of value in partnering with the entire portfolio of companies that are out there as we look to develop our programs. SAM: We imagine the consequences are much bigger on the government side of things, as well. Daniel J. Abdun-Nabi: The sensitivities are very high. There is a tremendous amount of oversight, both for the government officials as well as companies that do business with the government, so we have to be very careful when we’re working in an alliance environment not to overstep any of those boundaries. SAM: Emergent has been fairly acquisitive in its history. Under what circumstances do you choose to “buy” versus “ally”? Daniel J. Abdun-Nabi: Acquisition remains a key component of our strategy going forward. It is a large part of the company’s history and part of our DNA. Emergent sees acquisitions in many forms. It is not simply the buying out of a company or the purchase of a particular product line, but also licensing or partnering with another company, where we share economic benefits and commercial responsibilities. From my vantage point it’s all consistent with growth through acquisitions. SAM: According to your Web site, the company is looking for 10 or more candidates for partnership. What 54

characteristics is Emergent looking for in potential partners? Daniel J. Abdun-Nabi: It varies depending on the product candidate and technology. For example, the partnership success criteria for our tuberculosis vaccine candidate, which will soon have efficacy data from a Phase 2b study and where the next step is to prepare for potential commercialization, would be quite different from partnering an earlystage platform or a product candidate targeting oncology where we simply need to identify or validate a proof-ofconcept product candidate. We have a fairly robust technology portfolio across both the BioDefense and BioSciences divisions, and the opportunities for partnering and who would be successful in the partnering relationships do vary product by product. SAM: Right. Are there similarities across the technology subsegment and between other subsegments of partners? Daniel J. Abdun-Nabi: There is a lot of variability and no one size will fit all. A lot of companies say they want to partner with Big Pharma and that’s the end-all and be-all. Our alliance program is not exclusively focused on the largecap players. There are numerous companies that bring a lot to the table. We think there’s a lot of value in partnering with the entire portfolio of companies that are out there as we look to develop our programs. SAM: Do you find that being a smaller to mid-size company creates advantages in being a solid partner across your entire portfolio? Daniel J. Abdun-Nabi: To me, it is less about size and more about capabilities and expertise. We believe we have core competencies in certain areas that are extremely valuable to potential alliance partners, and if our core competencies and strategic attributes align well with the needs of an alliance partner, then the alliance will work. If, however, they’re redundant or not particularly important

in a program or a relationship, then we would not be a good strategic fit. Having said that, though, I think being a smaller company allows us to make decisions quicker. We’re very focused in terms of what our strategic objectives are, so we can quickly determine whether a particular alliance falls within or outside of those objectives. It may be easier for us to make decisions, and this is where being smaller and nimbler could be an advantage. SAM: Speed of decision making is especially important in biopharma given the concrete timeframes for patents. Daniel J. Abdun-Nabi: That’s absolutely true. Decision making and being able to decide quickly are important elements, but the real driver for us is: “What do we offer as a strategic partner to others?” Emergent’s valuable core competencies include manufacturing, process and analytical development, government contracting, navigating the regulatory environment, as well as the ability to secure nondilutive funding for programs. This is quite an attractive skill set to a broad spectrum of small and mid-size companies, who see value in many, if not all, of our strategic capabilities. In the BARDA ADM context, one of the reasons why we were successful in securing the award to be a Center for Innovation is because we can offer a great deal to many of the younger companies with whom BARDA is working as they try to advance products through development and then ultimately to approval. SAM: Are there unique challenges in working with the developing world in an initiative like the one Emergent has with Oxford University around tuberculosis? Daniel J. Abdun-Nabi: Diseases such as tuberculosis, HIV, and malaria are driving the private sector, the NGOs, and the public sector to work together to figure out how to best address these public health threats. It’s through these types of collaborations where you can make real progress in resolving some Strategic Alliance Magazine

of the very difficult and thorny product development issues for those diseases. It’s an area where you will see unique opportunities and unique public-private partnership–type of structures. That’s not to say that the products that are being developed for those kinds of diseases don’t have commercial applicability— they clearly do. If we were to have an effective vaccine or therapy that would be used in the developing world for HIV, malaria, or tuberculosis, that would have a certain appeal across the world, both in the developed and developing world environments. With the emergence of multidrug-resistant, extensively drug-resistant, and totally drug-resistant strains of tuberculosis, the public health threat is significant, even for populations that believe themselves to be immune such as the United States. Tuberculosis is

Collaborative Buzz Continued from page 14 of the transaction, including Amylin’s net debt and a contractual payment obligation to Eli Lilly and Company that together total about $1.7 billion, is approximately $7 billion. Following the completion of BristolMyers Squibb’s acquisition of Amylin, Bristol-Myers Squibb and AstraZeneca will enter into collaboration arrangements, based on the framework of the existing diabetes alliance, regarding the

an airborne disease, and if someone infected with pulmonary TB traveled from one country to another, such a disease could rapidly spread. In an unvaccinated or unprotected population you basically have no current immunity and no ability to ward off that kind of infection. So these public health programs have a huge impact on both the developing and developed world. This is what drives the partnerships that are being established. SAM: Do complications arise from regulatory challenges, cultural differences, or other factors that are unique to each specific developing nation? Daniel J. Abdun-Nabi: Well, I think this is where alliances can be quite helpful. For example, I think it is pretty typical, when commercializing a product in an unfamiliar territory, to partner with a local partner that brings the development and commercialization of Amylin’s portfolio of products. In addition, AstraZeneca will make a payment to Amylin, as a wholly owned subsidiary of Bristol-Myers Squibb, in the amount of approximately $3.4 billion in cash. Profits and losses arising from the collaboration will be shared equally. AstraZeneca also has the option, exercisable at its sole discretion, to establish equal governance rights over key strategic and financial decisions regarding the collaboration, upon the payment to Bristol-Myers Squibb of an additional

Member Spotlight Continued from page 17 resources and investments across our customer portfolio. Our operations team maintains a clear, vertical view of their customer projects. This contrasts with the horizontal view of the entire customer enterprise within PPD,” said Young.

Applying Alliance Management Principles Throughout PPD PPD emphasizes that the principles of managing alliances are being instilled among non–alliance management personnel as well. “We believe that alliance management is a corporate discipline that is facilitated by our Alliance Management Group,” said Barry, who also offered that client teams for both transQuarter 3, 2012

expertise. Another example, in our TB program we work with Aeras, which is an organization founded and funded by the Gates Foundation. They have a lot of expertise in setting up clinical trial sites and running clinical trials in various parts of the world. These situations highlight the importance of proper alliances: What is it that each partner brings to the table? How do you maximize their strengths and, as a team, collectively use all the strengths to effectively move a product candidate forward? Establishing alliances that make sense for all the partners and mitigating and managing risk through those alliances I believe is important to success in our field across the globe. n

$135 million. (AstraZeneca and Lilly are ASAP Global Members.)

Biogen Idec and Isis Collaborate on Muscular Dystrophy Drug Biogen Idec and Isis Pharmaceuticals, Inc., have entered into an exclusive, worldwide option and collaboration agreement under which the companies will develop and commercialize a novel antisense drug for the treatment of myotonic dystrophy type 1 (DM1), which is also known as Steinert disease. (Biogen Idec is an ASAP Corporate Member.) n

actional relationships and development partners are taught to apply a problem-solving approach to proactively look out for challenges. Surprisingly, only 10 percent of alliances in the world of biopharma are currently service-based, a figure PPD expects to grow in the coming years. “Service-based alliances require more vigilance than asset- or capital-based alliances, as the asset for us is the alliance itself,” said Young. “Given the rapidly evolving and growing sector of service-based alliances across many industries, the life sciences company-CRO [relationship] is one where significant value for both partners can be created.” n 55

The Benefits of ASAP Membership and Chapter Participation Stay Local, Partner Global. ASAP’s local Chapters in multiple regions on four continents convene alliance professionals for tailored programming. Our continually growing community of Chapters provides a mix of content and networking opportunities. By joining ASAP and then attending Chapter events, you will be able to build your professional network, discover best practices, hear from experts, and create new connections. It is easy to see why Chapters are great places to build a collaboration network – you can take advantage of this rich environment to create local offerings for our growing alliance management community. Being active in an ASAP Chapter as a company or as an individual will show your commitment to your alliances and your professional development. ASAP Global and Corporate members including Xerox, Dell, IBM, Quintiles, Sanofi-Aventis, Schneider Electric, AstraZeneca, The Rhythm of Business, Vantage Partners, SAS, Cisco, GSK, Nationwide, Verizon, PwC, and many more are active participants in ASAP Chapters.

Join Today! Learn more about ASAP and the benefits of participating in an ASAP Chapter, and how you can enhance your alliance management performance as an individual or corporate member. For the current Chapter list and for a listing of upcoming Chapter events, go to For additional information on ASAP Membership including Chapter benefits, access, and resources please contact Lori Gold, Senior Manager of Membership Services at or +1-781-562-1630. 56

960 Turnpike St, Canton MA 02021 USA Tel: +1-781-562-1630

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Solutions Marketplace

Selected Products and Services for and from Strategic Alliance Professionals Core Points Group Helps Alliances Sustain Growth Core Points Group is a team of consultants spread around the United States, India, United Kingdom, Singapore, and Dubai, which works with clients to sustain growth in their business in a variety of ways. Its hands-on engagements are outcome-driven and geared toward value creation. Core Points Group’s collective expertise covers a wide spectrum of vertical industries, such as IT services and software, manufacturing, financial services, and public services. The group has worked with alliances in North America, Europe, the Middle East, Africa, and Asia. Its Alliances and Partnerships Consulting practice offers a variety of services, including 360-degree alliance surveys, alliance health diagnoses, partnership growth roadmap analysis and program development, and troubled alliance remediation. The consultancy has helped clients utilize partnerships to overcome barriers associated with time constraints, cost, competitive threats, geography, and industry disruption. For more information, visit

Alliance experts Provides Alliance Life Cycle Management Alliance experts is a consultancy based in the Netherlands and Singapore that provides strategic alliance services to a variety of corporations, governments, and other institutions. The organization’s Alliance Life Cycle Management Quarter 3, 2012

incorporates an array of tools and processes directly into a module that can be applied to train novice alliance managers and nonalliance personnel. In collaboration with the Rotterdam School of Management, Alliance experts has jointly developed its Quick-Connect model, which distinguishes four phases of the collaboration process—negotiation, transition, execution, and dissolution. These research-based tools measure the correlation of each aspect of alliance management with the ability to successfully manage collaborations as a whole. Alliance experts helps instill a greater “network readiness” among companies and public authorities. To learn more, contact

The Warren Company Enables Collaborative Innovation The Warren Company strives to provide solutions that fill two pressing needs of senior executives: 1) a clear architecture that facilitates and manages innovation, and 2) a mechanism for ongoing analyses of whether to innovate through organic growth, acquisitions, or alliances. Building on the company’s experience and research, the Warren Company’s architecture helps companies consistently generate innovation across organizational boundaries. By capitalizing on the “synergy of compatible differences,” alliances hold unique potential as engines of innovation, enabling the transformation of ideas into

Research-based tools measure the correlation of each aspect of alliance management with the ability to successfully manage collaborations as a whole. new products, services, and soluttions. The Warren Company’s Collaborative Innovation Architecture is based on unique and compelling characteristics that drive innovation alliances. When applied appropriately, it produces consistent, highquality, high-performance relationships that help partners adapt to change and prosper over the long haul. The Warren Company views the following as key factors to producing successful engagements: n Properly trained innovation champions and project managers n Clear operational performance processes with accompanying measurements n Effective innovation management processes designed for the unique needs of each alliance n Proper leadership support for Collaborative Innovation initiatives For more information, contact +1-401-640-1166. To be part of Solutions Marketplace, e-mail, call +1 781-562-1630, or write to Association of Strategic Alliance Professionals, 960 Turnpike Street, Canton, MA 02021 USA. 57

the close

Can Alliance Management Save the World? The Principles of the Discipline Could Make It the Ideal Profession to Solve Critical Social Problems By John DeWitt and Jon Lavietes

OVER THE COURSE OF THE LAST DECADE OR SO, the larger business world has pledged to do what it takes to operate in an environmentally sound manner. “Green business” is an industry of its own (even if there is still debate over the sincerity and efficacy of corporate sustainability initiatives). And although no one would accuse Global 1000 companies of singing “Kumbaya,” collaboration is becoming a louder buzzword mentioned in broader contexts than simply technologies that help us work together. As this issue’s feature denotes, “coopetition” is the norm, most notably in the IT industry but in a variety of other markets, too. Meanwhile, the manufacturing industry has come a long way in how it thinks about supplier relationship management; companies higher up on the chain are seeing more and more the value of keeping the long term in mind rather than reaping immediate gains from strong-arming their partners.

Who in the business world could take the commitment to collaboration and corporate social responsibility to the next level? The alliance management community, of course. What if the business world were to take this newfound commitment to collaboration and corporate social responsibility to the next level and begin to truly turn the business machine toward solving the world’s greatest problems? Who could grind the gears in the direction of eradicating poverty, reducing armed conflict, or escalating the fight against climate change? It would likely take a collection of individuals accustomed to holding the priorities of other stakeholders, an entity, and a goal equal to their own. In all probability, it would require persuading highranking people with swift decision-making power and influencing 58

populations to engage in a certain manner without the authority to make them act in the interests of the primary objective. Who in the business world might make this happen? The alliance management community, of course. We’ve already gotten a glimpse of what alliance management is capable of. In biopharma, true strategic alliances are at the heart of initiatives that are producing and disseminating treatments for neglected diseases—whether it is Emergent BioSolutions’ South African TB Vaccine Initiative or the Novartis Malaria Initiative, the latter of which was honored with a 2010 Alliance Excellence Award. In yet another example, Coherence, Inc., was awarded a 2012 Alliance Excellence Award for facilitating an alliance between ScotiaBank and regional telecommunications company Digicel that has empowered more than 4,000 banked and unbanked Haitian citizens to safely and securely store, access, and spend their money electronically through their mobile phones in the wake of an earthquake that ravaged 35 percent of the country’s small network of bank branches and ATMs. In our next issue, we aim to explore the vast potential for publicprivate alliances to bring about positive change in our society. Until then, alliance managers, like any other type of professional, are often urged to think big and set their goals high. For the alliance management community, the world is your limit. n Strategic Alliance Magazine

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The 2012 ASAP BioPharma Conference is Coming to The Boston Area November15-16 The Charles Hotel, Cambridge, Mass.USA

Biopharma’s top alliance management thought leaders and companies will attend. Shouldn’t you join them? The ASAP BioPharma Conference gathers more prominent executives and companies associated with the development and management of biopharma alliances than any other event. It offers the most in-depth training in the “how-to” of alliance management – actionable insights, practical tools, and hands-on skill building. It is the place to do business and reconnect with your current allies, or to find your new partner, employee, or potential employer. No other conference can match the ASAP BioPharma Conference’s plethora of industryoriented professional development and networking opportunities. How can you afford not to be there? Come join us at the ASAP BioPharma Conference, where we will explore the profession’s most pressing themes, including:

+ Creating a culture of alliance excellence + New frontiers: service alliances (e.g. CMOs, CROs) + Creating an effective alliance management dialogue with your CEO + Implementing a consistent partner experience + Alliances for biosimilars and open innovation + Partnering internally with key support personnel Of course, the ASAP BioPharma Conference will still deliver the core alliance management tools, processes, people-skill training, and general knowledge that are ASAP event hallmarks. This is the premier event for alliance management professionals and all those who are responsible for the biopharmaceutical industry’s increasingly collaborative relationships. The industry’s top alliance management thought leaders and companies will be there. Shouldn’t you? Register today. Register for the event now at

Follow the 2012 ASAP BioPharma Conference on: asapbiopharma#asapbio2012 ASAP BioPharma Conferences

The Charles Hotel

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