Not Just a Function: How to Make Partnering an Organization-wide Capability

Over the last few years, we have talked and written plenty about the need to have partnering capabilities “baked into” organizations rather than “bolted on.” It’s not just alliance, partner, and channel managers who need to master alliance principles; employees in other functions must have some baseline organizational collaboration skills. 

Last week, the latest ASAP webinar saw Jeff Shuman, CSAP, PhD, cofounder, and Jan Twombly, CSAP, president of The Rhythm of Business, unfold the secrets to instilling these competencies throughout the company in their presentation, “An Evolution in Impact and Influence: From Function to Organizational Capability,” which touched on the changes required in company strategy, modus operandi, personnel, and the structure of the alliance portfolio, among other elements needed to make organizations truly collaborative.

Level Set: The Mentality, Skills, and Tools for a Collaborative Organization

Shuman laid the groundwork by painting the picture of what is necessary for such a massive change management undertaking using some broad brushstrokes. He and his consultancy’s vision for an organizationwide partnering capability rests on a particular mindset, skillset, and toolset. For the former, he said that companies can’t be content siloing alliance skills in a discrete function or Center of Excellence (COE).

“Partnering well must be a core organization capability. It’s that important,” he said.

According to Shuman, the skillset is the competencies required to create, deliver, and capture value and understand the “full range” of what value looks like in a collaborative relationship. The toolset refers to the “systems, processes, teams, and measures that enable intended outcomes and manage business, legal, and human risk.”

Organizational Partnering in Seven Parts

Shuman then broke down organizational partnering capability into seven parts:

1. A partnering strategy aligned around corporate strategy – “Partnering cannot be considered an afterthought after you make and buy,” Shuman added.
2. Partnering activities are incorporated into workflows and processes – “It’s just the way that work gets done,” said Shuman. “And we’re changing how work gets done as we go to this organizational capability.”
3. Executive appreciation of the strategic and financial contribution of partnering activities – Shuman expressed minor exasperation that senior leadership still needs to be sold on collaborations, considering that “in many instances [alliances] can be 50 or 60 percent of sales, as well as future pipeline.”
4. Operational alignment with key functions – “You have to be able to take the horizontal view across the functional organization,” Shuman noted. 
5. Sufficient alliance infrastructure and life cycle processes across all alliances – Organizations can no longer manage “alliances independently” of each other. “You have to take that portfolio perspective,” Shuman asserted. 
6. Dedicated, trained alliance management professionals – “It’s conceptually simple, it’s operationally challenging,” warned Shuman. “You want to do training throughout the organization because, again, everybody has to have some basic ability.”
7. The partner leadership team includes alliance professionals and champions and drives the development and maintenance of the partnering capability – “It’s not a one-time thing,” said Shuman. “As things change, you allow it to iterate as necessary.” 

Value – Investment = Significant ROI in Partnering

Twombly spent the rest of the session diving deeper into these elements, starting with how to make the business case for shifting toward a partner-driven capability. The first two steps are to “start by defining the value you are managing, both strategic and financial, and then look at what can be lost if it’s not well managed. What happens if you allow the cost of time to get away from you and you’re second to market as opposed to first?” she said. Conversely, “How can it be enhanced if it is managed well?” 

From there, alliance leaders must determine the level of investment needed to manage and optimize the portfolio and over what period of time. This could entail hiring additional full-time employees, revamping systems and processes, or bringing in professional development resources, said Twombly, illustrating some examples of what organizations could need. Finally, Twombly urged attendees to show the net value partnerships bring once you subtract the costs from the projected revenue and benefits. 

“When you look at the value being managed, and you compare that to what you need to invest to manage it well, you’ll see that there is significant return on investment that is possible,” she said.

Type 6: Loyal Dedication to High-Value Partnerships 

Twombly later waded deeper into how alliance leadership can define the value of the portfolio. She challenged listeners to come up with their definition by answering a half-dozen questions.

1. What is the sum total of cash investment in partnerships (e.g., in license fees, research funding, paid performance milestones, etc.)?
2. For licensors, what are your likely future incoming milestone receipts? Licensees, on the other hand, must determine their “contingent liabilities” and obligations around performance milestones, for example. 
3. What percentage of personnel time is spent on alliance activities? For example, Twombly said, if 60 percent of the pipeline is partnered, then what does 60 percent of R&D alliance management personnel spending look like? 
4. How important is partnering to strategy and goals shared with industry analysts and investors? Twombly noted that partners aren’t always explicitly mentioned in earnings calls and analyst updates, but they underpin the underlying corporate strategy and impactful results being discussed in those conversations. It’s up to senior alliance executives to call this out for key internal stakeholders. 
5. How do team members’ partnering experiences translate to their willingness (or unwillingness) to stay with the company? Twombly highlighted the importance of the “enthusiasm factor.” People working in thriving partnerships are “thrilled, they are energizers, they are creating that collaborative culture,” while those stuck in middling collaborations or worse tend to “suboptimize”—that is, “They don’t give their all, they’re not necessarily looking for the best solution,” and they beg off the team, Twombly noted.
6. Do you get access to best research and novel assets? This is a strong indicator of whether your organization is considered the “partner of choice” in your therapeutic area or service industry.  

Three Stages to Get to Three Tiers 

When the rubber meets the road, it’s time to establish a baseline—“know where you are, what you’ve got, and what you’re working with. Doing that will highlight some obvious gaps that you can close quickly without really involving anybody other than your own alliance management team,” said Twombly. 

A few moments later, Twombly gave a glimpse of what this looks like in practice in her discussion of tiering structures, which are being overhauled in all industries to be “based on the criticality of that partnership to the business—how essential it is to strategy and business outcomes”—as well as its relative complexity in terms of how many parts of the organization are involved and how much the partner is engaged with these internal stakeholders. 

She recommended a three-tier structure for the alliance portfolio. At the top are the complex, high-value alliances she alluded to earlier. At the bottom are the simple partnerships, such as straight in- or out-license deals in pharma, that can be managed by employees outside of the alliance management group. In between are the “tier 2” alliances that require moderate engagement and resources, “run-of-the-mill” engagements that might perhaps represent “where most of your partnerships are,” Twombly speculated. 

“You don’t have to do it all at once. This could be a staged process,” said Twombly of making the transition to this triple-tier alliance portfolio arrangement.

In fact, she said, you can do this in three stages. First, alliance teams can secure quick wins through partner initiatives that require minimal investments and approvals. “Horizon 2,” as Twombly called it, sees improvements to the alliance function that hinge on a little more buy-in from senior management and moderate resources. Alliance leaders reach the last stage when they are “making significant changes, and you probably have to time it with the company’s budgeting cycle and getting executive-level approval,” said Twombly. 

Shuman and Twombly provided attendees with so much more, including real and hypothetical case studies illustrating these principles. Check back with the ASAP Content Hub to find the recording of “An Evolution in Impact and Influence: From Function to Organizational Capability,” and hear them discuss how to assess current talent level inside and beyond the alliance group, stakeholder management, and building an infrastructure that matches and best supports the organization’s collaborative capability.