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Corporate Affairs Excellence:
Optimizing Group Structure & Operations




                            1
             Copyright © Best Practices®, LLC   BEST PRACTICES,
                                                              ®
                                                                  LLC
Table of Contents


           Table of Contents                                         TOC Continued

•Project Blueprint – pg. 3                               •Corporate Affairs Group Structures: Key
•Executive Summary: Benchmark Insights &                 Trends & Drivers of Sub-group Evolution –
Research Participants– pg. 5                             pg. 28
•Commercial Structures: Trends That Drive                •Corporate Affairs Group Models &
Business Unit Structures & Evolution of                  Structures – pg. 32
Corporate Affairs – pg. 11                               •Corporate Affairs Group Services: Key

•Novartis Case Study: Articulating Business              Trends In Service Levels & Priorities –

Units to Express Growth &Entrepreneurial                 pg. 45
                                                         •Contact Information – pg. 50
Spirit – pg. 17

                                             Page - 2
                                 Copyright © Best Practices®, LLC               BEST PRACTICES,      ®
                                                                                                         LLC
Optimizing Structure Involves Integrated Practices & Approaches
There are no perfect structures. “Form follows function.” New market pressures and
lifecycle events compel structures to evolve. Optimizing structure reflects the integrated
management of units, people, process, technology, communications, incentives and other
management factors.


                             10. Assess    1. Realign to
                           Performance,    Support New                            “No institution can
                                Refine &   Corporate
                           Continuously    Goals,                                 possibly survive if it
            9. Optimize         Improve    Strategies    2. Fine-tune             needs geniuses or
            Learning to
                                                         Corporate
            Enhance
                                                         Affairs Sub-group        supermen to manage it.
            Performance
                                                         Structures
                               Corporate Affairs:                                 It must be organized in
      8. Manage /
     Coordinate Roles       Accelerated Evolution 3. Establish Service            such a way as to be
     for a Fully Integrated     To Make the New             Levels to Reflect
     Pharmaceutical                                      Priorities & Resources   able to get along under
      Network                    Structure Work
                                                      4. Integrate                a leadership composed
          7. Drive Long-Term                          Operations to
          Priorities & Respond                         Bridge BUs,                of average human
           to Ad Hoc Issues      6. Refine 5. Use       Geographies &
                                    Talent Funding /       Sub-Groups
                                                                                  beings.”
                             Management    Budgeting
                              Strategies & Process to                                 -Peter Drucker
                            Systems to Fit Reaffirm
                            New Structure  Alignments

                                                       Page - 3
                                           Copyright © Best Practices®, LLC           BEST PRACTICES,   ®
                                                                                                            LLC
Corporate Affairs Benchmark Research Participants
  Participants in this benchmarking research included 28 corporate affairs executives
  and managers at 27 leading bio-pharmaceutical, healthcare and non-healthcare
  companies. Interview participants are underlined.

                                                                      1.    Abbott Laboratories
                                                                      2.    Amgen
                                                                      3.    Astellas Pharma, Inc.
                                                                      4.    Astra Zeneca
                                                                      5.    Boehringer Ingelheim
                                                                      6.    ConvaTec
                                                                      7.    DRI
                                                                      8.    Eisai, Inc
                                                                      9.    Eli Lilly and Company
                                                                      10.   Emirates
                                                                      11.   Genentech
                                                                      12.   Genomic Health
                                                                      13.   Genzyme
                                                                      14.   GlaxoSmithKline
                                                                      15.   Intas Pharma
                                                                      16.   MDS Nordion
                                                                      17.   Medtronic
                                                                      18.   Merck Sharp Dohme Turkey
                                                                      19.   MetLife
                                                                      20.   MSD
                                                                      21.   National Grid
                                                                      22.   Novo Nordisk
                                                                      23.   Pfizer
                                                                      24.   Purdue Pharma LP
                                                                      25.   Roche Diagnostics Diabetes Care
                                                                      26.   Solvay
                                                                      27.   Stiefel, a GSK Company
                                                                      28.   UCB
                                                                      29.   W. R. Grace & Co.
                                               Page - 4
Copyright © Best Practices®, LLC   Copyright © Best Practices®, LLC    BEST PRACTICES,             ®
                                                                                                       LLC
Participants’ Job Titles Typically Director or Above
  Research participants included Vice Presidents, Executive Directors, Medical
  Executives, Directors and Managers. More than 69% of benchmark partners are
  directors and VPs and 31% are managers. All work directly or indirectly in Corporate
  Affairs functions.

                              JOB TITLE                                    JOB TITLE
              Assistant Director                            Government Affairs Manager
              Associate Director                            Manager
              Copy and Production Officer                   Manager
              Director                                      Manager
              Director                                      Manager
              Director                                      Manager
              Director                                      Manager,
              Director                                      Medical Executive
              Director                                      Project Manager
              Director                                      Senior Director
              Director of Advocacy                          Sr. Director
              Director, Communications                      Sr. Manager
              European Director                             Vice President
              Executive Director                            Vice President
              Executive Director

                                                  Page - 5
                                      Copyright © Best Practices®, LLC                 BEST PRACTICES,
                                                                                                     ®
                                                                                                         LLC
Functional Perspectives Circumscribe Corporate Affairs
 Benchmark partners reflect functional experience that interacts directly or indirectly
 with the Corporate Affairs function. Since Corporate Affairs resides in different places
 across companies and sectors, diverse functions from Government Affairs, Corporate
 Affairs, Communications, Medical Affairs and Advocacy participated in this study.

              GROUP OR FUNCTION                                        GROUP OR FUNCTION
    Advocacy Relations / Corporate Communications         Healthcare Alliance Development
    Communications                                        Marketing Communications
    Communications and Government Affairs                 Medical Affairs
    Communications, Brand, Interactive, Creative          Medical Affairs
    Corporate Affairs                                     Medical Affairs
    Corporate Communications                              Multi Channel Communications / Marketing
    Corporate Communications                              Patient Advocacy
    Corporate Communications                              Patient Advocacy Relations
    CRM and Customer Experience                           Patient Services and Professional Relations
    Customer Marketing                                    Professional Relations, Public Affairs and Advocacy
    General Medicine                                      Public Policy and Advocacy
    Global Advocacy Development                           Sales and Marketing Communication
    Global Employee Communication and Brand               Stakeholder Management
    Government Affairs                                    State Government Affairs
    Government Strategy and Relations


                                                    Page - 6
                                        Copyright © Best Practices®, LLC                BEST PRACTICES,         ®
                                                                                                                    LLC
Hybrid Structure Most Common of Approaches
 The multi-industry study group reflected diverse approaches to corporate commercial
 structure. About one-third described their commercial operating structures as “hybrids.”
 This reflects various characteristics designed to help them deal with growth, scale,
 products and geographic complexity. About 47% of respondents said they evolved using
 some form of decentralization.

      Q4. Commercial Structure: Note the approach best describing your company's commercial
                                        operations structure

                          Commercial Operating Structure

                       Hybrid                                                  30%

                  Centralized                                            23%
    Decentralized by Product
         Families / Divisions                                          20%
                                                                                  47% reflect
           Decentralized by
                 Geography                                       17%             some form of
                                                                                decentralization
            Decentralized by
           Therapeutic Area                         10%

                            Percentage with Each Operating Structure
  (n=28)
                                                Page - 7
                                    Copyright © Best Practices®, LLC           BEST PRACTICES,     ®
                                                                                                       LLC
Corporate Affairs Group Structure – Mid-Cap Pharma
Hybrid Approach - A
Here, Corporate Affairs reports to the General Counsel with centralization at headquarters
and staff decentralization to product families with different regional headquarters. Business
units organized by therapeutic areas, product families, geography, product lifecycle and
customer segment. Corporate Affairs supports three blockbusters and 10 smaller products.




                                               Page - 8
                                   Copyright © Best Practices®, LLC   BEST PRACTICES, ®
                                                                                          LLC
About Best Practices, LLC




     Best Practices, LLC is a research and consulting firm that
  conducts work based on the simple yet profound principle that
       organizations can chart a course to superior economic
  performance by studying the best business practices, operating
      tactics and winning strategies of world-class companies



               Best Practices, LLC
                  6350 Quadrangle Drive, Suite 200,
                        Chapel Hill, NC 27517
                       www.best-in-class.com
                         Telephone: 919-403-0251

                                     Page - 9
                         Copyright © Best Practices®, LLC   BEST PRACTICES,
                                                                          ®
                                                                              LLC

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Corporate Affairs Excellence Report Summary

  • 1. Corporate Affairs Excellence: Optimizing Group Structure & Operations 1 Copyright © Best Practices®, LLC BEST PRACTICES, ® LLC
  • 2. Table of Contents Table of Contents TOC Continued •Project Blueprint – pg. 3 •Corporate Affairs Group Structures: Key •Executive Summary: Benchmark Insights & Trends & Drivers of Sub-group Evolution – Research Participants– pg. 5 pg. 28 •Commercial Structures: Trends That Drive •Corporate Affairs Group Models & Business Unit Structures & Evolution of Structures – pg. 32 Corporate Affairs – pg. 11 •Corporate Affairs Group Services: Key •Novartis Case Study: Articulating Business Trends In Service Levels & Priorities – Units to Express Growth &Entrepreneurial pg. 45 •Contact Information – pg. 50 Spirit – pg. 17 Page - 2 Copyright © Best Practices®, LLC BEST PRACTICES, ® LLC
  • 3. Optimizing Structure Involves Integrated Practices & Approaches There are no perfect structures. “Form follows function.” New market pressures and lifecycle events compel structures to evolve. Optimizing structure reflects the integrated management of units, people, process, technology, communications, incentives and other management factors. 10. Assess 1. Realign to Performance, Support New “No institution can Refine & Corporate Continuously Goals, possibly survive if it 9. Optimize Improve Strategies 2. Fine-tune needs geniuses or Learning to Corporate Enhance Affairs Sub-group supermen to manage it. Performance Structures Corporate Affairs: It must be organized in 8. Manage / Coordinate Roles Accelerated Evolution 3. Establish Service such a way as to be for a Fully Integrated To Make the New Levels to Reflect Pharmaceutical Priorities & Resources able to get along under Network Structure Work 4. Integrate a leadership composed 7. Drive Long-Term Operations to Priorities & Respond Bridge BUs, of average human to Ad Hoc Issues 6. Refine 5. Use Geographies & Talent Funding / Sub-Groups beings.” Management Budgeting Strategies & Process to -Peter Drucker Systems to Fit Reaffirm New Structure Alignments Page - 3 Copyright © Best Practices®, LLC BEST PRACTICES, ® LLC
  • 4. Corporate Affairs Benchmark Research Participants Participants in this benchmarking research included 28 corporate affairs executives and managers at 27 leading bio-pharmaceutical, healthcare and non-healthcare companies. Interview participants are underlined. 1. Abbott Laboratories 2. Amgen 3. Astellas Pharma, Inc. 4. Astra Zeneca 5. Boehringer Ingelheim 6. ConvaTec 7. DRI 8. Eisai, Inc 9. Eli Lilly and Company 10. Emirates 11. Genentech 12. Genomic Health 13. Genzyme 14. GlaxoSmithKline 15. Intas Pharma 16. MDS Nordion 17. Medtronic 18. Merck Sharp Dohme Turkey 19. MetLife 20. MSD 21. National Grid 22. Novo Nordisk 23. Pfizer 24. Purdue Pharma LP 25. Roche Diagnostics Diabetes Care 26. Solvay 27. Stiefel, a GSK Company 28. UCB 29. W. R. Grace & Co. Page - 4 Copyright © Best Practices®, LLC Copyright © Best Practices®, LLC BEST PRACTICES, ® LLC
  • 5. Participants’ Job Titles Typically Director or Above Research participants included Vice Presidents, Executive Directors, Medical Executives, Directors and Managers. More than 69% of benchmark partners are directors and VPs and 31% are managers. All work directly or indirectly in Corporate Affairs functions. JOB TITLE JOB TITLE Assistant Director Government Affairs Manager Associate Director Manager Copy and Production Officer Manager Director Manager Director Manager Director Manager Director Manager, Director Medical Executive Director Project Manager Director Senior Director Director of Advocacy Sr. Director Director, Communications Sr. Manager European Director Vice President Executive Director Vice President Executive Director Page - 5 Copyright © Best Practices®, LLC BEST PRACTICES, ® LLC
  • 6. Functional Perspectives Circumscribe Corporate Affairs Benchmark partners reflect functional experience that interacts directly or indirectly with the Corporate Affairs function. Since Corporate Affairs resides in different places across companies and sectors, diverse functions from Government Affairs, Corporate Affairs, Communications, Medical Affairs and Advocacy participated in this study. GROUP OR FUNCTION GROUP OR FUNCTION Advocacy Relations / Corporate Communications Healthcare Alliance Development Communications Marketing Communications Communications and Government Affairs Medical Affairs Communications, Brand, Interactive, Creative Medical Affairs Corporate Affairs Medical Affairs Corporate Communications Multi Channel Communications / Marketing Corporate Communications Patient Advocacy Corporate Communications Patient Advocacy Relations CRM and Customer Experience Patient Services and Professional Relations Customer Marketing Professional Relations, Public Affairs and Advocacy General Medicine Public Policy and Advocacy Global Advocacy Development Sales and Marketing Communication Global Employee Communication and Brand Stakeholder Management Government Affairs State Government Affairs Government Strategy and Relations Page - 6 Copyright © Best Practices®, LLC BEST PRACTICES, ® LLC
  • 7. Hybrid Structure Most Common of Approaches The multi-industry study group reflected diverse approaches to corporate commercial structure. About one-third described their commercial operating structures as “hybrids.” This reflects various characteristics designed to help them deal with growth, scale, products and geographic complexity. About 47% of respondents said they evolved using some form of decentralization. Q4. Commercial Structure: Note the approach best describing your company's commercial operations structure Commercial Operating Structure Hybrid 30% Centralized 23% Decentralized by Product Families / Divisions 20% 47% reflect Decentralized by Geography 17% some form of decentralization Decentralized by Therapeutic Area 10% Percentage with Each Operating Structure (n=28) Page - 7 Copyright © Best Practices®, LLC BEST PRACTICES, ® LLC
  • 8. Corporate Affairs Group Structure – Mid-Cap Pharma Hybrid Approach - A Here, Corporate Affairs reports to the General Counsel with centralization at headquarters and staff decentralization to product families with different regional headquarters. Business units organized by therapeutic areas, product families, geography, product lifecycle and customer segment. Corporate Affairs supports three blockbusters and 10 smaller products. Page - 8 Copyright © Best Practices®, LLC BEST PRACTICES, ® LLC
  • 9. About Best Practices, LLC Best Practices, LLC is a research and consulting firm that conducts work based on the simple yet profound principle that organizations can chart a course to superior economic performance by studying the best business practices, operating tactics and winning strategies of world-class companies Best Practices, LLC 6350 Quadrangle Drive, Suite 200, Chapel Hill, NC 27517 www.best-in-class.com Telephone: 919-403-0251 Page - 9 Copyright © Best Practices®, LLC BEST PRACTICES, ® LLC