the practice of alliance management in biopharma

The Practice ofAlliance Management in theBiopharmaceutical Industry

© 2010 The Rhythm of Business, Inc.

December 2010

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► Over 25 years of hands-on experience designing, building and managing strategic alliances and collaborative networks

► Methodologies and measurement tools applied in large, complex organizations within

■ life sciences

■ International economic development

■ energy

■ Information technology

► Member of team that created the first alliance management professional certification

► Leaders in the only alliance management professional organization

► Operational, consulting, research, academic pedigrees

The Rhythm of Business helps organizations innovate and succeed through collaboration

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Sponsors

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Study Overview

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What are the roles, responsibilities, and organization of alliance management functions as

biopharma business models become more dependent on alliances and

companies develop their collaborative ability?

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Research Question

AcordaActelionAlk-AbelloAmag PharmaceuticalsAmgenAstellasAstraZenecaBayerBiogen IdecBristol-Myers SquibbChugaiCubistDaiichi SankyoEisaiElanEli Lilly

Facet BiotechGenentechGilead SciencesGlaxoSmithKlineGrunenthalHalozyme TherapeuticsHospiraImmunoGenIpsenJohnson & JohnsonLexicon PharmaceuticalsMedicisMedivationMerckMerck Serono

MundipharmaNovartisNovo NordiskNycomedPfizerPharmacopeiaPTC TherapeuticsRocheSanofi-AventisSepracorShionogiShireSignum BiosciencesSolvayTakedaXoma

58 Study Participants Representing 47 Companies

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Headquarters Location

56%

11%

33%

The Americas

Europe

Asia

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Longevity of Alliance Management

37%

25%

38%

3 to 5 Years

More than5 Years

Less than3 Years

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Biopharmaceutical companies are increasingly dependent on alliances and collaborations

It would make sense to invest in developing an organizational

capability to succeed at alliances and collaborations

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The evidence shows this is not the case

Less than 3 Years 3 to 5 Years More than 5 Years

More than half of alliance management groups participating in the survey have

fewer than five members

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Less than 3 Years 3 to 5 Years More than 5 Years

Nearly half of all survey participants manage three or fewer alliances

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Alliance Management InfluenceReflects Multiple Questions

Less than 3 Years 3 to 5 Years More than 5 Years

Influence is growing – but insufficient

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Elevate and promote alliance management as a recognized capability essential to achieving

corporate goals© 2010 The Rhythm of Business, Inc.

Become marginalized if undermanaged portfolios

underperform and the value of specialized alliance

management is not recognized14

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Positioning in the Corporate Hierarchy

Less than 3 Years 3 to 5 Years More than 5 Years

A majority of alliance management groups have a reporting relationship

through business development

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Less than 3 Years 3 to 5 Years More than 5 Years

As groups mature, they are more likely to be led by vice presidents

or senior vice presidents

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Less than 3 Years 3 to 5 Years More than 5 Years

Alliance management groups are following the industry trend of moving to more globally oriented organizations

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Things aren’t always as they appear

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Less than 3 Years 3 to 5 Years More than 5 Years

Perception: CEOs’ view alliance management favorably

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Less than 3 Years 3 to 5 Years More than 5 Years

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Playing an essential role

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Less than 3 Years 3 to 5 Years More than 5 Years

A stepping stone in a general management career and for a few, a profession

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Your Opportunity

Build on positive perceptions to define the role you seek and

create visibility and awareness of it throughout your organization

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The Job of anAlliance Manager

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Alliance Manager as Choreographer

Rallying people and their resources to achieve the vision of the alliance

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The essence of the job

Time

Risk Value

L

HM

anag

emen

t C

ompl

exit

yPo

tent

ial V

alue

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Increasing Portfolios,Limited Resources

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Man

agem

ent

Com

plex

ity

Potential Value

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One of three conditions often result, usually in combination:

► Some alliances are not being managed

► Individuals with other functional responsibilitiesalso managing alliances

► Key responsibilities relinquished over time toaccommodate a growing and/or increasinglycomplex portfolio

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Less than 3 Years 3 to 5 Years More than 5 Years

In 60% of companies “simpler” alliances may be managed as

part of someone else’s job

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The Company’sAlliance Portfolio

The Company’s Alliance Management Capability Design

The challenge is to dynamically align the company’s ability to do business through

strategic alliances and collaborations with its alliance portfolio

Functional Corporate

Part-time Dedicated

Program/Product Alliance

General Specialized

Ad Hoc Systemized

Locus

Staffing

Role & Accountability

AM Knowledge Base

Processes & Tools

Factors Dimensions

.

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Role and Accountability of Alliance Management

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Alliance management groups take on an increasing array of responsibilities

throughout their first five years

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As time goes on, alliance managers relinquish key responsibilities of

planning and evaluation

0%10%20%30%40%50%60%70%80%90%

100%

Strategic plan Operating plan Health assessment

Perc

ent o

f Res

pond

ents

Planning and Evaluation

Less than 3 Years 3 to 5 Years More than 5 Years

Planning and Evaluation

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Alliance Management Led TrainingMultiple Responses Allowed

Less than 3 Years 3 to 5 Years More than 5 Years

Coaching others to collaborate more effectively is a primary responsibility

of most respondents

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Accountability

Primary accountability – Defined objectives other than alliance milestones

Alliance by alliance, NOT the overall portfolio

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Implications

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Less than 3 Years 3 to 5 Years More than 5

Years

Development Milestones for an Alliance Management Capability

►Determine capability design

►Be clear on role and value

►Educate team members and executives

►Develop consistent , systematic practices and tools

►Increase responsibilities for ■ Planning and

evaluation■ Alliance

formation■ Skill building

►Align the capability with the portfolio

►Make tools and processes accessible to others

►Ingrain the capability in the organization’s psyche

►Deliver greater value with limited resources (don’t give up planning and evaluation)

►Proactively support functional managers with part-time alliance management responsibility

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Closing the Gap

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►Evaluate the portfolio from the perspective of the purpose of alliance management

►Analyze each individual alliance to determine how best to manage it within the context of the overall portfolio

►Establish a consistent alliance management philosophy, processes, and tools

►Proactively define and communicate the role and accountability

Ensuring all alliances are appropriately managed

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Being established is never equivalent to being relevant

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42© 2010 The Rhythm of Business, Inc.

If you can walkYou can danceIf you can talkYou can sing

– Proverb from Africa

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