Survey finds disconnect between perceived importance of alliance management function at C-level and actual commitment to it.
A study examining the state of alliance management in pharmaceutical companies has revealed that, despite nearly unanimous agreement among study participants that alliances and other collaborations are increasingly important to company strategies, investment in managing alliances is not keeping pace.
The Practice of Alliance Management in the Biopharmaceutical Industry, co-sponsored by the Biopharma Council of the Association of Strategic Alliance Professionals (ASAP) and The Rhythm of Business, found that while a majority of alliance managers at companies with an established alliance management function believe they are viewed by their CEOs as essential to achieving corporate strategy, they are not being afforded the influence necessary to drive those outcomes.
Two-thirds of participants are not satisfied with the influence they presently have and veterans of functions in existence for more than five years are most likely to be unhappy with the sway they have within their organizations. This phenomenon is further crystallized in terms of alliance managers’ perceptions of their growth prospects; over time, alliance managers are less likely to see the position as a path to senior leadership, despite the fact that the role is a sophisticated one, requiring a savvy business person with multi-dimensional talent.
Despite the perceived importance of alliances, companies’ lack of follow-through can be seen in the amount and quality of manpower committed to achieving company objectives through the alliance function—a majority of study participants report five or fewer full-time alliance management professionals, who are most commonly responsible for three or fewer alliances.
In many companies, alliances generate more than half of both revenue and product pipeline. Sixty percent of participants report alliances in their company’s portfolio that are not managed by alliance professionals. The study examines in detail the role, responsibilities, and organization of the alliance management function in biopharmaceutical companies. Clear differences were found when the data were segregated based on the maturity of the function and its size. Among the findings:
• Alliance management groups take on an increasing array of responsibilities throughout their first five years. After that they relinquish key responsibilities, including planning and evaluation.
• As the alliance portfolio grows, alliance management groups will be required to diversify the alliance management capability with functional managers who have part-time alliance management responsibility.
The study concludes that to realize the strategic and financial objectives of their alliances, companies must take steps to ensure that their alliance and collaboration capability is aligned with the management needs of their alliance portfolio. As portfolios grow larger and increasingly more complex, the risk is that by not investing in the professional management of alliances, they will underperform.