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

1. Partner or Perish:
Forging Effective Alliances
MaRS Best Practices Series:
Alliance Management
John Buckingham
June 3, 2009
1

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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Alliance Leadership Alternatives
Shared Leadership Integrated Leadership
 Internal/external
 Product Objectives/
Relationship Objectives
17
©Buckingham Alliance Partners 2009

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. 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. 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. 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. 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. 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. 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. 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. Effective Senior Management
Sponsorship of Alliances
Typical Alliance Governance Framework
26
©Buckingham Alliance Partners 2009

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. 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. Partner or Perish: Forging Effective Alliances
Questions?
29
©Buckingham Alliance Partners 2009