Partner or Perish: Forging effective alliances

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Speaker: John Buckingham

Effective partnering to achieve your company objectives, rather than always having to build your own infrastructure to do so, is increasingly important in these challenging economic times. At this session, you'll have the opportunity to hear and discuss a number of thought-provoking aspects regarding how to get the most from your partnerships:

* What makes a good partner?
* Courtship & contracting
* Making partnerships work

More information about this and other events in the MaRS Best Practices Event Series found here: http://www.marsdd.com/Events/Event-Calendar/Best-Practices-Series/alliance-mgmt-06032009.html

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Partner or Perish: Forging effective alliances

  1. 1. Partner or Perish: Forging Effective Alliances MaRS Best Practices Series: Alliance Management John Buckingham June 3, 2009 1
  2. 2. Partner or Perish: Forging Effective Alliances Session Objectives Address key questions:   Growing your business: Build or partner?   What defines a competent partnering organization?   How does one build and maintain an effective alliance? 2 ©Buckingham Alliance Partners 2009
  3. 3. Partner or Perish: Forging Effective Alliances Continuing Learning: The leading global professional association dedicated to the formation and practice of strategic alliances www.strategic-alliances.org ASAP - Toronto Chapter www.asaptoronto.com Event: Joint ASAP-CHLA Meeting: Focus on Alliance Management September 16-18, 2009 Niagara-on-the-Lake, Ontario www.chlassoc.org 3 ©Buckingham Alliance Partners 2009
  4. 4. Partner or Perish: Forging Effective Alliances Professional Certification: Masters Certificate in Strategic Alliance Management Intensive 12-day program: Nov. 15, 2009 - Jan. 29, 2010 www.mastersinalliances.com Available through ASAP - Toronto Chapter 4 ©Buckingham Alliance Partners 2009
  5. 5. What is an Alliance? •  An alliance is a collaboration •  Between independent organizations that retain strategic autonomy •  While committing resources to joint activity •  And run within an incomplete contract 5 ©Buckingham Alliance Partners 2009
  6. 6. Major Alliance Types: Operational alliances •  One or more key functions of a company is performed solely or primarily by an alliance partner Project alliances •  Alliance partners collaborate on a specific project, typically with defined progress milestones and a defined termination point 6 ©Buckingham Alliance Partners 2009
  7. 7. Alliance Business Model Core Capabilities and Competencies Alliances for S C Supplementation/Load u o Balancing p m p p le le m m e n Core e n t t a a r r y y Alliances for Complementary Capabilities, Offerings and Skills 7 ©Buckingham Alliance Partners 2009
  8. 8. Partner or Perish: Forging Effective Alliances Why would we want to do this?   Alliances (collaborations) increasingly used to attain company goals: •  Access to expertise •  Flexible resources •  Increased speed (of development, to market, etc.) •  Reduced financial risk 8 ©Buckingham Alliance Partners 2009
  9. 9. Partner or Perish: Forging Effective Alliances Why would we want to do this?   Alliances (collaborations) increasingly used to attain company goals: •  Access to expertise •  Flexible resources •  Increased speed (of development, to market, etc.) •  Reduced financial risk   Less than 40% of alliances meet their stated objectives •  Misalignment of partner goals •  Miscommunications •  Poor execution •  Changed financial prospects •  Technical failure 9 ©Buckingham Alliance Partners 2009
  10. 10. Partner or Perish: Forging Effective Alliances Why establish an alliance competency?   Increase the proportion of alliances that meet or exceed their goals (and management expectations) 10 ©Buckingham Alliance Partners 2009
  11. 11. Partner or Perish: Forging Effective Alliances Why establish an alliance competency?   Increase the proportion of alliances that meet or exceed their goals (and management expectations)   Accelerate `institutional learning’ of effective (and destructive) behaviors affecting collaborations: enhanced organizational awareness   Build consistency in effective alliance design, integration and maintenance processes 11 ©Buckingham Alliance Partners 2009
  12. 12. Partner or Perish: Forging Effective Alliances Why establish an alliance competency?   Increase the proportion of alliances that meet or exceed their goals (and management expectations)   Accelerate `institutional learning’ of effective (and destructive) behaviors affecting collaborations: enhanced organizational awareness   Build consistency in effective alliance design, integration and maintenance processes   Enhance company reputation as a skilled, successful partnering organization (to secure more, and more capable, partners) 12 ©Buckingham Alliance Partners 2009
  13. 13. Partner or Perish: Forging Effective Alliances Key Alliance Management Competencies: 1. Communicating Effectively 2. Leading by Influencing 3. Gaining Value from Diversity 4. Building and Maintaining Trust 13 ©Buckingham Alliance Partners 2009
  14. 14. Alliance Management Principles* • Clear Responsibilities and Expectations • Robust Communication • Senior Management Commitment • Understanding one’s Partner • Disciplined Improvement Approach • Effective, Efficient Processes • Broad-based Alliance Capability * Adopted by ASAP from `Endo Alliance Management Principles’ 14
  15. 15. Internal Organization for Alliance Management Key Elements: Senior Management Sponsor  Alliance must serve sponsor’s organizational goals   Dedicated Alliance Leader  `Mindshare’ or formal designation 15 ©Buckingham Alliance Partners 2009
  16. 16. Effective Senior Management Sponsorship of Alliances Why is Effective Sponsorship critical?   Alliance failure rate – key factors:  Internal support for resourcing and decision-making  Ensuring alignment on key issues across partner organizations  Effective dispute resolution 16 ©Buckingham Alliance Partners 2009
  17. 17. Alliance Leadership Alternatives Shared Leadership Integrated Leadership   Internal/external   Product Objectives/ Relationship Objectives 17 ©Buckingham Alliance Partners 2009
  18. 18. Alliance Life Cycle Alliance Alliance Alliance Alliance Negotiation Integration Maintenance Transformation Agreement R&D Commercialization Signing Collaboration Alliance Integration Change or Termination Alliance Management Problem Contract Resolution Negotiation Monitoring Prevention Diagnosis Treatment 18 ©Buckingham Alliance Partners 2009
  19. 19. Establishing an Alliance Management Competency Alliance Management: Business Development Interface Deal-Making and Deal-Managing: An Integrated, Transparent Process Identify/ Negotiate Re-evaluate: Sign Launch/ Manage Recruit Revise or Integrate Opportunities Evaluate Terminate BD AM 19 ©Buckingham Alliance Partners 2009
  20. 20. Alliance Management Perspective: Adding Value During Deal Negotiations Three Main Considerations: •  Due diligence: partner candidate assessment •  Effective relationship development •  Designing the appropriate collaboration structure 20 ©Buckingham Alliance Partners 2009
  21. 21. Integrating a New Alliance Key Considerations: •  Appointing a qualified alliance leader and a senior management `sponsor’ •  Timely recruiting of alliance-facing staff 21 ©Buckingham Alliance Partners 2009
  22. 22. Integrating a New Alliance Key Considerations: •  Appointing a qualified alliance leader and a senior management `sponsor’ •  Timely recruiting of alliance-facing staff •  Joint communication of management expectations and contractual requirements to the alliance team and leader •  Joint alliance team formation and relationship -building •  Establish alliance team charter 22 ©Buckingham Alliance Partners 2009
  23. 23. Alliance Team Charter Template Guidance Resource for Alliance Management Allied Companies: Your and XYZ Company Purpose: Provides focus, Alliance History and Background alignment and operational guidance to each alliance relationship. Serves as an Alliance Focus (Mission, Spirit of Alliance, High-Level Objectives/Milestones) operational reference and guide through the alliance lifecycle as a companion to Roles and Responsibilities (Company Roles and Key Individual Roles) contractual agreements and project plans. Key Sections: Alliance Working Guidelines •  Alliance mission, objectives (Addressing the Alliance Essentials) and spirit •  Roles and responsibilities •  Working guidelines Performance Measurement (Measuring and Monitoring Performance) •  Metrics and performance measurement 23 ©Buckingham Alliance Partners 2009
  24. 24. Alliance Life Cycle Alliance Alliance Alliance Alliance Negotiation Integration Maintenance Transformation Agreement R&D Commercialization Signing Collaboration Alliance Integration Change or Termination Alliance Management Problem Contract Resolution Negotiation Monitoring Prevention Diagnosis Treatment 24 ©Buckingham Alliance Partners 2009
  25. 25. Alliance `Health Check’ Surveys Assessment Resources for Alliance Management Purpose: Primary measurement mechanism for Relationship Performance Alliance Health Check Strongly Strongly factors Disagree Disagree Neutral Agree Agree Key Features: 1. Alliance Focus (Goals and Objectives)   Provides regular checkpoint a. Sensor Question b. Sensor Question on essential Alliance c. Sensor Question 2. Roles and Responsibilities competencies a. Sensor Question   2-3 “sensor” questions per b. Sensor Question c. Sensor Question Relationship factor 3. Decision Making   Results discussed with a. Sensor Question partner, to identify and b. Sensor Question 3. Relationship Trust understand areas for a. Sensor Question improvement and reasons b. Sensor Question for successful outcomes   Action plans developed and implemented through Alliance Team 25 ©Buckingham Alliance Partners 2009
  26. 26. Effective Senior Management Sponsorship of Alliances Typical Alliance Governance Framework 26 ©Buckingham Alliance Partners 2009
  27. 27. Establishing an Alliance Management Capability Alliance Structure and Management Considerations High Strategic Importance Imbalance Balance to Your Company Vulnerable Enthusiast Dynamic Duo Balance Imbalance Low Potential Bully Simple Pairing Strategic Importance to High Low Alliance Partner 27 ©Buckingham Alliance Partners 2009
  28. 28. Partner or Perish: Forging Effective Alliances Session Objectives Address key questions:   Growing your business: Build or partner?   What defines a competent partnering organization?   How does one build and maintain an effective alliance? 28 ©Buckingham Alliance Partners 2009
  29. 29. Partner or Perish: Forging Effective Alliances Questions? 29 ©Buckingham Alliance Partners 2009

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