The Human Factor: Behavioral Dynamics There are proven tools and models for identifying and resolving most behavioral issues that impede efficient, effective teamwork. Why are these tools not implemented? Why are companies not benchmarking optimal performances by discipline and addressing the factors costing the industry billions of dollars and limiting the availability of important therapies? When managing alliances, most companies focus initially on contracts, structure, and processed resources, not people, but that is beginning to change. “We are just beginning to develop industry standards and best practices. I believe that Merck Vaccines and other companies are now taking steps to address behavioral dynamics in a more systematic and objective manner,” says Michael Pergine, senior director of alliance strategy and commercialization for Merck Vaccines. Pharmaceutical and biotechnology companies can quickly adopt proven tools and strategies to assess and measurably improve team performance. Adoption of behavioral dynamics best practices in particular can boost alliance efficiency and success from preclinical to commercial stage. “Behavioral dynamics assessments are a strategic tool to quantify the relationship at the joint team level, leveraging strengths and correcting weaknesses to maximize alliance progress by creating a high-performing joint team,” Pergine says. Implementation of these strategies allows companies to better align teams, assign responsibilities, and manage collaborations more effectively. Companies that incorporate behavioral dynamics into alliance management optimize governance, process, and structure, creating strong teams that accomplish goals on time and within budget.
Looking Ahead According to Seeking Alpha, nine of the top 13 pharmaceutical companies will see 17 major products lose patent protection by 2012, and the loss of major products will reduce the $112 billion R&D spending of the top 50 companies by some accounts. The economics and timelines associated with current R&D approaches are not yielding the number of products necessary to sustain current revenue and profit levels. By some accounts, market consolidation combined with patent expirations will force companies to introduce one new U.S. product yielding $400 million a year in revenue for every 1 percent market share to maintain existing market position. Quarter 2, 2011
Reduction in R&D spending will decrease the number of scientists working to cure diseases, as evidenced by the large layoffs in 2009 and 2010 at major companies such as Pfizer and Merck.
The Four Requirements for Success Executive management must acknowledge the importance of alliance management to the pharmaceutical and biotechnology business model. Companies must clearly define alliance management. Currently, companies often mix project management and alliance management. Unlike project management, which focuses on the discipline of planning, organizing, and managing resources to ensure successful completion of a project, alliance management focuses on: Contract structure—aligning objectives and resources to achieve a well-defined, jointly shared objective. Material conflict resolution. Good structure, clear objectives, and appropriately skilled personnel will eliminate costly inefficiencies that plague alliances. Companies must extend benchmarking and personal assessments to identify and develop the correct skills for each key functional area of an alliance. People in key roles, particularly scientific and clinical, need to develop interpersonal and collaboration skills to improve efficiency, effectiveness, and success. Companies must gain better insight into the behavioral strengths and weaknesses of each team member. From small academic to large clinical-and-commercial alliance initiatives, behavioral factors have a significant negative effect. This issue can be rectified quickly and inexpensively. The tools and knowledge are available. The time is now. The industry can experience significant gains by defining and aligning skills of people they employ and collaborate with. This approach will be an important factor in advancing science and increasing efficiency and revenue.
Curtis R. Sprouse is president of Boston Market Strategies, Inc., and EurekaConnect, LLC.
The magazine of the Association of Strategic Alliance Professionals