Take It to the Top: Raising the Alliance Function’s Profile
How do you make alliance management more important, and even indispensable, to the organization? The latest ASAP roundtable, “Unlocking Growth: The Strategic Imperative of Elevating Alliance Management,” attempted to answer these questions earlier this month. The event saw four executives collectively representing alliance management software platform company allianceboard and venerated alliance management consulting and training firm The Rhythm of Business lead separate discussions among alliance professionals of all stripes about how to construct a business case for the practice and educate your organization on the value it brings.
Visibly More Strategic in Four Steps and Six Questions
Before separating into four breakout groups, Louis Rinfret, founder and CEO of allianceboard, primed attendees by breaking down the difference between a tactical and reactive alliance function versus one with a sense of strategy and a vision that adds value to its organization. The former spends an inordinate amount of time buried in administration and ad hoc requests, has little consistency in how it engages with partners and the rest of the organization, and doesn’t employ formal practices, processes, and data.
The groups that put the “strategic” in “strategic alliance” usually tier or segment their alliances and tailor formal best practices for each of these partner categories, Rinfret noted. Stakeholders are kept informed through regularly disseminated standard reports, which creates a “virtuous cycle.”
“People learn from each other. [Organizations] can apply this knowledge to other situations because you have that visibility,” Rinfret said.
Jan Twombly, president of The Rhythm of Business, then quickly outlined four steps to making a business case that illustrates the sizable ROI companies attain when they pump resources into the partner function. She followed this business case with six questions that can further help illustrate the value collaborations bring to the company. (Both the business case and the questions were detailed in the recap of last week’s webinar, “An Evolution in Impact and Influence: From Function to Organizational Capability.”)
Numbers Slide Shows the Numbers Didn’t Slide
It was then up to Rinfret, Twombly, Sarah Mole, marketing manager at allianceboard, and Michael Moser, CSAP, PhD, customer success consultant at allianceboard, to elicit insights from breakout groups that could help answer two questions: 1) Have you built a business case for investment in the alliance function? If so, what did you do? 2) How can you educate your organization on what alliance management does?
Several participants shared details of their previous attempts to present a business case for more alliance resources to senior management, with varying degrees of success. One person shared that their alliance management group prepared a slide for each partnership showing the total value of paid and future milestones. These slides are shared with senior executives on a quarterly basis.
This initiative proved successful in large part thanks to previous feedback from the company’s higher-ups, who made it clear they were less interested in the qualitative aspects of the relationships.
“They wanted to see the numbers,” the participant recalled.
Value in Non-Alliance Personnel—and Beyond the Transaction
In another case, a smaller pharmaceutical company was able to quantify the expected value of emerging commercial alliances based on a number of variables, including but not limited to expected milestone payments. This alliance group has helped create a “culture of collaboration,” as senior leaders are now ready to pony up more resources to train non–alliance managers to handle some of the less-strategic alliances with contract research organizations (CROs) and contract development and manufacturing organizations (CDMOs).
Although C-suite executives usually love numbers and summary bullets, revenue-focused reports sometimes present a narrow argument for more resources. In one breakout conversation, a participant recalled that their pitch to senior management based on dollar investment and ROI ended up coming off as an overly “transactional, numbers-based approach.” The rest of the group agreed that quarterly updates should contain a balance of financial success and qualitative examples of the intangibles the alliance team brings in order to get away from that “transactional” mindset.
Risk Management Is the Bomb; Neglecting It Could Prove Incendiary
In the pre-breakout intro, Twombly laid out the three main types of risk: 1) business, 2) human, and 3) legal, and indeed risk was a big topic when it comes to establishing a strategic alliance practice; multiple breakout groups emphasized the importance of educating stakeholders on the risk management component of alliance management. One held a discussion about mitigating risks associated with up-front investment in partnerships. Another group noted that it’s easy to forget all of the things alliance professionals do to “keep the bomb from going off” between quarterly updates.
Several discussion participants concluded that it’s critical for partner managers to detail the specific actions they took to keep major alliance initiatives from “falling through the cracks.” Journal these deeds regularly and they will see patterns emerge over time. They can use those insights to illuminate for senior leaders how alliance professionals routinely steer collaborations through value-threatening chaos behind the scenes. This exercise is particularly important because many stakeholders often only notice alliance managers when there’s a fire drill.
Sprinkle these risk mitigation activities into quarterly updates and keep a centrally accessible dashboard up-to-date with the latest revenue figures, and the portfolio’s value will be visible to senior management at any moment, not just in times of crisis.
“You can show the numbers all the time, so you don’t have to wait for a catastrophe [to illustrate your value],” said one interlocutor.
