The Secret Sauce for Successful Collaborations
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Partnering and building alliances is the preferred model of business growth for many CEO’s. In a recent survey, 70% of CEOs plan to partner extensively and indeed the top performers among those CEO’s do just that. Partnering leverages the expertise, resources, and talent beyond the walls of a single organization. Yet many companies lack the fundamental skills, capabilities and leadership to collaborate effectively. We have found in our practice that successful collaborative business relationships are built upon four crucial ingredients.
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The Secret Sauce for Successful Collaborations
- 1. The Secret Sauce for Successful Collaboration Norma Watenpaugh Principal, Phoenix Consulting Group Global Board, ASAP The Secret Sauce for Successful Collaboration 3/6/2014 1
- 2. WINNERS COLLABORATE 70% CEO’s intend to partner more extensively Out performers out partner by 28% IBM Survey 2012 1700 CEO’s in 64 countries Dutch Tulip Growers who collaborated the most – were the most successful The Secret Sauce to Siccessfi; Collaboration 3/6/2014 2
- 3. COLLABORATION IN THE SKILLS GAP #1 trait CEOS look for in employees; 70% citing it as crucial #2 fatal flaw in CEOS Hbr.com2014 The Secret Sauce to Siccessfi; Collaboration 3/6/2014 3
- 4. Reasons to Partner Innovation Growth New Product Development Expand into new Markets In-Source Innovation Increase Customer Satisfaction Access to IP/Expertise Transform Industries Disruptive Business Models Competitive Advantage Efficiency Logistic Efficiencies Reduce Time to Market Leverage Shared Resources Cost Reduction Geographic Expansion Risk Mitigation Co-Branding The Secret Sauce for Successful Collaboration 3/6/2014
- 5. What is a Partner? A collaborative business relationship between two or more entities that share assets, expertise, risks, rewards, and control to create greater value for their customers and for their own organizations than could be efficiently accomplished independently. Transaction Out-sourcing OEM or Licensing Channel Contract Alliances Virtual Joint Venture Joint Venture M&A Degree of Collaboration The Secret Sauce to Siccessfi; Collaboration 3/6/2014 5
- 6. Crucial Ingredients Champion Culture Capability Competency The Secret Sauce for Successful Collaboration 3/6/2014 6
- 7. SUCCESS BEGINS AT THE TOP STRONG EXECUTIVE SPONSORSHIP IS CRUCIAL • Sets the Strategic Vision • Advocates the Value • Fosters a Culture for Collaboration • Last Stop in Escalation • Organizational Navigator The Secret Sauce for Successful Collaboration 3/6/2014 7
- 8. Partner Lifecycle Framework Builds Enabling Business Processes Alliance-Specific Strategy Transform Innovate Exit Launching & Managing Partner Life Cycle Alliance Structuring & Governance Analysis & Selection Building Trust & Value Operational Planning Source: ASAP Handbook of Alliance Management The Secret Sauce to Siccessfi; Collaboration 3/6/2014 8
- 9. Alliance Value Prop Operational Plan Individual Roles, Responsibilities, Motivations, Rewards The Secret Sauce for Successful Collaboration Stakeholder Mapping Alliance Strategy Alliance Team Charter Corporate Strategy Executive Sponsor Strategies and Techniques for Alignment 3/6/2014
- 10. Innovative Business Model Lilly Partnership for MDR - Tuberculosis Defining the Challenge: Patient Compliance and Prevention Creates a different ecosystem than just ‘cheap drugs” Aspen Pharmacare, SIA Int’l, Purdue University Transfer of Technology & Drug Supply Workplace Awareness & Prevention Int’l Council of Nurses, WHO, World Medical Assoc. US Disease Control and Prevention Treatment, Training & Surveillance Patient Community Support Red Cross, Red Crescent Patient Advocacy TB Alert, TB Survival Project World Economic Forum, Business Alliance to Stop TB The Secret Sauce for Successful Collaboration 3/6/2014 10
- 11. WIN/WIN/WIN Partnerships Partner Math: 1 + 1 > 3 How do you benefit from the partnership? How does your partner benefit? How does the partnership create greater customer value? What is the likely result if one of the value propositions is weak? Best Practice Guidance: Three-way value propositions are the foundation of sustainable partnerships The Secret Sauce for Successful Collaboration 3/6/2014 11
- 12. PARTNER BUSINESS MODEL DRIVES FINANCIAL VALUE – SOLUTION PROVIDER EXAMPLE Revenue Source Basis Product Resale Margin or Referral Fee 10% of ASP* $50,000 $5,000 Cross Sell Opportunities 10% of ASP $5,000 Customer Training 20% of ASP $10,000 Implementation Services 100% of ASP $50,000 Consulting Services 300% of ASP $150,000 TOTAL Revenue Recognized $220,000 * Average Selling Price The Secret Sauce for Successful Collaboration 3/6/2014 12
- 13. Alliance Team Charter When everyone is on the same page This is the page Sets up the common vision for the alliance/initiative Joint team activity- People support what they create Sets expectations and builds trust Sets standards for behavior through operating principles
- 14. Alliance Core Values/Operating Principles Govern How the Team Works Together and Shapes the Alliance Culture Source: Rolls-Royce Starfish Alliance The Secret Sauce for Successful Collaboration 3/6/2014
- 15. Stakeholder Alignment How does behavior change with commitment and accountability? The Secret Sauce for Successful Collaboration 3/6/2014
- 16. Competency for Collaboration Soft Skills - Conflict Resolution - Cross Function Team Management - Influencing Others Core Skills - Strategic Alignment - Selection & Qualification - Leading without Authority- - Governance - Problem Solving & Critical Thinking - Alliance Negotiations -Cultural Sensitivity - Co-opetition - Metrics - Fostering Collaboration Business Knowledge Aptitudes - Industry Trends -Lead & Influence - Business Strategy -Take Initiative w/Little Supervision -Marketing Processes -Strategic/Global Thinkers -Sales Processes -Network across Org Boundaries -Change Management -Flexible -Innovative/ Resourceful People Oriented The Secret Sauce for Successful Collaboration 3/6/2014 16
- 17. Influences on Culture Leadership Processes Influencers Culture Norms & Values Control Structures Behaviors The Secret Sauce for Successful Collaboration 3/6/2014 17
- 18. WHAT IS A CULTURE FOR COLLABORATION Win-Win Attitude Empathy Diversity is the source of Innovation Confrontation is the starting point for Collaboration Flexibility Commitment Lead with Trust 18
- 19. “In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed.” Charles Darwin The Secret Sauce for Successful Collaboration 3/6/2014 19
- 20. Go Forth and Partner and Prosper! The Secret Sauce for Successful Collaboration 1/14/2014 20
- 21. We specialize in best practice partner strategies, programs, and marketing. We help companies transform their partnering practices to drive corporate growth, innovation and build shareholder value. Companies we have served: www.phoenixcg.com ph:1 408 848 9514 email: normaw@phoenixcg.com The Secret Sauce to Siccessfi; Collaboration 3/6/2014 21
Editor's Notes
- Ask class why they partner?Does it vary from partner to partner?Why does your partner – partner with you?Some of the differences when the objectives are different. Different functions involved Different metrics Different governance
- Lilly White PaperCuring Tuberculosis in the countries where it is endemic is a bigger problem that providing inexpensive drugs. Tuberculosis has become very resistant to most treatments and in order to control the disease, patients need to stay on the drug regime nearly two-years. This is difficult since people tend to stop taking the drug once symptoms abate and the net result is an even more drug-resistant strain. Lilly knew that if they wanted to make an impact on the toll this diseases takes, it needed to do more than partner with a low cost manufacturer. It had to surround the patients with an ecosystem that would support compliance for the full course of the treatment and further to address prevention. The partnership included many health organizations across the world as well as local support groups targeted to families and local health professionals. Over 27 organizations are involved. Lilly won the first Alliance Excellence Award for Social Responsibility awarded by ASAP in 2008
- Most of the respondents acknowledged a culture and predisposition to outsourcing; but only half indicated a strong history or experience-base in outsourcing development functions to the countries of interest though all did actively outsource to U.S. and European based research organizations. The other half were in the early stages of this journey:doing the discovery, due diligence, and pilot projects leading up to a more extensive effort. Other countries mentioned, but not a focus of this study, were: Russia, Poland, and generally Eastern Europe and smaller Asian countries. Cost was not the primary driver.Building capacity or external capability, access to innovation, flexibility and adaptability in the business model, and time to market were all mentioned as more important than cost. Cost was maybe the 3rd priority…but intrinsic to the execution model.