Designing the Enterprise Capability for Managing Collaborative Relationships

  • Published on
    27-Mar-2016

  • View
    213

  • Download
    1

Embed Size (px)

DESCRIPTION

Within many companies today, there is fresh thinking about the management capability they need to succeed with alliances and collaborations. Those that havent yet adopted the discipline are starting and those that have, are refreshing their practice. Common among them is taking an enterprise view of collaborative relationships and consciously developing a capability that is aligned with a broad portfolio of relationships. This paper builds on the portfolio analysis and offers a step-by-step process for assessing what the capability should be, the scope of relationships to be included, as well as the organization design, staffing coverage model and roles and accountabilities of those with alliance management responsibility.

Transcript

  • C o l l a b o r a t i v e N e t w o r k s n A l l i a n c e M a n a g e m e n t n C o l l a b o r a t i v e A b i l i t y

    Volume 3 in the White Paper Series Alliance Management at a Crossroads

    Designing the EnterpriseCapability for Managing

    Collaborative RelationshipsJanice Twombly, CSAP and Jerey Shuman, CSAP, PhD

  • D e s i g n i n g t h e E n t e r p r i s e C a p a b i l i t y f o r M a n a g i n g C o l l a b o r a t i v e R e l a t i o n s h i p s

    1

    The greatest change in the way business is being conducted is

    the accelerating growth of relationships based not on

    ownership but on partnership.

    Peter Drucker

  • D e s i g n i n g t h e E n t e r p r i s e C a p a b i l i t y f o r M a n a g i n g C o l l a b o r a t i v e R e l a t i o n s h i p s

    2

    Contents The Evolving Role of the Alliance Management Professional 3 A New Perspective on Managing Collaborative Relationships 5 The Portfolio: Defining the Universe 9 Designing a Collaborative Capability 12 Three Scenarios 17 The Alliance Management Professions Golden Opportunity 25 Recent Whitepapers on Alliance Management and Collaboration by The Rhythm of Business 27 About The Rhythm of Business 28

  • D e s i g n i n g t h e E n t e r p r i s e C a p a b i l i t y f o r M a n a g i n g C o l l a b o r a t i v e R e l a t i o n s h i p s

    3

    The Evolving Role of the Alliance Management Professional Weve titled this series of white papers, Alliance Management at a Crossroads and have described this crossroads as either gaining acceptance of the unique value an alliance management capability provides or else becoming marginalized: useful in certain circumstances, but clearly a niche. It has long troubled us that although companies routinely generate 30-40-50 percent and more of their revenues through alliances and increasingly give partners responsibility for what were once core functions, the practice of alliance management is not more widespread. Based on the membership of the Association of Strategic Alliance Professionals (ASAP), the profession and the fact that there is a discipline is still a best kept secret. Its global membership is largely information technology and biopharmaceuticals, with a smattering of insurance, consumer goods, media, and industrials. Yet every industry has alliances. Some of this is due to the profession not doing a good enough job of promoting itself. Based on our research and experiences, only a minority think about it as a profession. In biopharma, an industry that depends on alliances, only 25% of alliance managers surveyed see it as a profession! (See The Practice of Alliance Management in the Biopharmaceutical Industry, The Rhythm of Business, November 2010). Political and turf issues also get in the way. After all, would an executive who has a team responsible for designing and manufacturing the companys hottest new product, or creating a distribution system in China, want to cede any degree of responsibility, that is, control, of his or her critical external relationships to someone from a centralized staff group called alliance management? Of course not unless the benefit is obvious. Most importantly, there is a defensive barrier. If alliances and collaboration are how business is done today, then any good executive or manager has to succeed in this environment. Yes, and. The complexity and boundary crossing that comes from collaborating with external parties requires competency, processes, policies and tools that arent required when working within the confines of a single enterprise. It adds an additional component to the endeavor. Both the collaboration the negotiating, clarifying, coordinating, leveraging, communicating, trust building and the work of the collaboration the project, the customer solution, the research must be managed. Sometimes these two needs are in conflict. Therein lays the current opportunity and danger for the alliance management profession.

    Alliance Management at a Crossroads

    Gain acceptance of the unique value an alliance management capability provides or else risk becoming marginalized: useful in certain circumstances, but clearly

    a niche.

  • D e s i g n i n g t h e E n t e r p r i s e C a p a b i l i t y f o r M a n a g i n g C o l l a b o r a t i v e R e l a t i o n s h i p s

    4

    Alliances and collaborations are so pervasive in business that alliance management does not have the luxury to play catch up and get someone with a variation of the title, alliance manager assigned to every significant alliance or collaborative relationship. By default, managers with other titles and duties already have alliance responsibility for many of these relationships. Sometimes it is specifically assigned and included in his or her performance objectives and compensation. Most often it is not even acknowledged that the manager must assume this additional, significant responsibility. Alliance professionals opportunity is to infuse the discipline throughout the enterprise. In the process, others are empowered to apply the tools and techniques in their specific situations, freeing alliance management specialists to provide hands-on leadership of the complex, truly strategic relationships that cross multiple boundaries within the company, as well as beyond it. With a consistent approach across the enterprise to working with external partners, some of the complexity inherent in these relationships is lessened, meaning that management risk is reduced and value is more readily realized. How can a company take the next step in building an enterprise collaborative capability? Different companies and industries are at different stages and thus have to consider different starting points for developing a common approach to managing collaborative relationships. Start by assessing the current status. It likely falls into one of three broad categories that demand action: Alliance management is informal and ad hoc or not focused enough on business value. An increasingly complex portfolio of alliances is not performing as planned and/or are ripe with conflict and disagreement Siloed approaches to alliances within different business units or geographies are complicating the management of collaborations that cross internal boundaries A strategic growth initiative that depends on partnering with external parties has been announced, but there is no process in place for deciding when to partner, with whom, and how to realize value from it Any of these circumstances presents a springboard for establishing an enterprise capability for managing collaborative relationships and instilling the discipline of alliance management as part of how business is done. This paper presents a simple process through which an organization can determine its alliance management needs and design the necessary capability.

    Alliance professionals opportunity is to infuse the discipline throughout the enterprise, empowering others to apply the tools and techniques in their specific situations, freeing alliance management specialists to provide hands-on leadership of the complex, truly strategic relationships that

    cross multiple boundaries.

  • D e s i g n i n g t h e E n t e r p r i s e C a p a b i l i t y f o r M a n a g i n g C o l l a b o r a t i v e R e l a t i o n s h i p s

    5

    A New Perspective on Managing Collaborative Relationships The seed for proactively managing partners is planted when a division, function, or geography accumulates a sufficient number of external, collaborative relationships. Perhaps it runs into some difficulty and assigns someone to oversee the partnerships to correct the problem. Over time, this often develops into an alliance or partner management group. This opportunistic process occurs as needed throughout the enterprise, resulting in multiple groups, each with its own approach to managing its relationships. Fragmented, bottoms-up efforts result in pockets of expertise and excellence, but rarely is it knit together into an enterprise wide capability. Some companies have a global alliance management group. However, they generally are limited in the scope of their responsibility to specific types of relationships, such as co-development and co-commercialization relationships. There are some exceptions to the norm. For example, Eli Lilly & Company has a Chief Alliance Officer with a broad scope of responsibility. At pharmaceutical giant Sanofi, the alliance managers are networking themselves across business units and geographies to learn from each other and drive key practices. At IBM, an alliance management community helps share ideas and tools and provides access to external experts. The objective of their efforts in linking up is to share learning and grow the capability across the enterprise The business world has reached the point in the opening of corporate boundaries and the proliferation of collaborative relationships that a common methodology and tools are well advised to drive financial value, manage complexity and increase effectiveness. An organization-wide capability for managing collaborations provides this consistency. It also means dedicated management of certain external parties as well as employees who can assume that responsibility as part of their jobs. It includes executives equally versed in serving on alliance governing committees as they are in contributing to internal decision making bodies. Financial executives must account for alliances as a discreet scope of business. Similarly, employees must fluidly move from solely internal teams and projects to partnered efforts, with a full understanding of how that boundary crossing affects their actions. When alliances and other collaborative relationships are managed effectively, the risk their complexity poses is minimized and all the forms of value they are intended to produce are available to be turned into the desired strategic and financial outcomes. Decisions get made, communication flows, work is shared, and resources are provided and used to achieve joint objectives in a timely manner. In addition, points of conflict are anticipated, analyzed, negotiated, and resolved. Silos and geographies are joined. Stakeholders are aligned around whats right

    A common management methodology and tools are well advised to drive financial value, manage complexity, and increase effectiveness. An organization-wide capability for managing collaborations

    provides this consistency.

  • D e s i g n i n g t h e E n t e r p r i s e C a p a b i l i t y f o r M a n a g i n g C o l l a b o r a t i v e R e l a t i o n s h i p s

    6

    for the alliance, understand how that benefits the company and themselves, and are willing to get behind it. The costs of not managing alliances and collaborative relationships effectively are simply too great to ignore. They can include arbitration and litigation, stalled development efforts and lost time to market, as well as an inability to compete for desirable assets, capabilities and access. Every alliance manager knows that successful partnering efforts are a lot of work. Alliances and other collaborations are a means to an end; a strategic choice about how to achieve objectives. When practiced appropriately collaboration is a set of behaviorsa way of working that involves coordinating specific activities and communicating certain information to leverage resources in the purposeful pursuit of objectives. It requires an environment of trust and transparency. Collaboration opens up the possibility of accessing the resources, knowledge, and relationships other people and organizations have and using each partys resources for mutual benefit. It also raises the specter of counting on someone who has a limited stake in your success. Thus, it is a sophisticated ability that depends on much agility in utilizing a range of skills through an iterative process of achieving desired outcomes. To be worthwhile, over time the value of what one receives must be greater than the cost of receiving it. And because collaborative relationships must provide benefit for all concerned, each party must perceive that the benefit (the get) is greater than the cost (the give). However, what is important and useful to one party to the collaboration may be of limited use and value to another party. Additionally, if that value isnt available to be realized in a timely manner, value is lost. Only the recipient can assess value, as it is personal, relative, and time sensitive. Something may be of negligible value to the party offering it, but it may be exactly what the recipient needs and vice versa. The value in an alliance or other collaborative relationship represents the get as determined by the recipient of the value. Management complexity is indicative of the time and effort that must be expended. It is the give the recipient must spend in order to realize the get. In this manner, it is possible for each participant to assess the relationship from its perspective and for both to recognize net benefit. This is the essence of what is meant when alliances and other collaborations are win-win. Each party must believe that the value received from the collaboration is greater than the time and effort it takes to get it. Real collaboration is not black or white; it exists on a continuum that ranges from a little to a lot. Generally, the greater the value sought, the more collaboration required for achieving desired outcomes, and absent specific action, the more complex the management of the relationship. Collaboration takes time and effort to produce results, so it is essential to match resources to the expected benefits. When this

    Collaboration takes time and effort to produce results, so it is essential to match resources to the expected

    benefits.

  • D e s i g n i n g t h e E n t e r p r i s e C a p a b i l i t y f o r M a n a g i n g C o l l a b o r a t i v e R e l a t i o n s h i p s

    7

    alignment is not acknowledged and a relationship improperly located on the continuum, confusion often results. Some get too much attention, wasting resource; others dont get enough, potentially creating unnecessary risk and leaving value on the table. Lines of responsibility become fuzzy and accountability suffers. The lack of a repeatable, consistent process for handling complexity and realizing value increases risk. Need for an Enterprise Capability In the past decade, collaboration has become ubiquitous. While not all business relationships are collaborative, there are enough that need to be (see Figure 1) so that an enterprise capability for managing them has become a necessity. However, when labels such as alliance, preferred supplier, outsourcing partner, and channel partner are used, they can hide the collaborative management needs of the...

Recommended

View more >