In this third instalment of our three-part series, we look at the key success factors driving successful execution of R&D collaborations between smaller biotech/medtech companies or academic research groups (‘David’) with much larger multinational corporations (‘Goliath’).
This article follows on from my two earlier articles, the first of which characterised the hidden reasons for the failure of many David-and-Goliath collaborations, and the second of which described the critical ingredients that should be in place before execution commences. It outlines some of the key conclusions emerging so far from my ongoing research (see the sidebar) into improving the execution of such collaborations, with an emphasis on how to alleviate or reduce execution risk and collaboration risk. We start by discussing how to set up the project model, then we consider how to optimally exploit the “honeymoon period” in the early months of every collaboration, and finally we look at how to drive the ongoing execution.
Project Model Setup
The first key step after consummating the collaboration deal is to set up the project structure, which on the face of it, looks very similar in most David-and-Goliath collaborations i.e. operating team(s), governance committee(s), participants, decision mandates and associated formal processes. You should be careful though not to confuse the project structure with the project model – the latter is a broader concept which (in addition to the formal project structure) also incorporates the working mindsets of the participants, how they interact, and how they contribute beyond just their technical expertise.
Fundamental to managing execution and collaboration risks is an agile team mindset in both the operating and governance processes. The participants need to recognise that they are together negotiating an adaptive journey, with unanticipated problems to solve as well as unexpected opportunities to exploit. And they need to recognise that they will have to proactively work on building relationships, trust and communication channels so that they enhance their capacity to deal effectively and efficiently with these issues as they arise. For example, the governance process will (as mentioned in the previous article) need to dynamically adjust intermediate project goals and detail the milestone definitions – this will test both the participants’ creative problem solving capabilities and the strength of their relationships.
Consider now the team composition. The traditional criteria for selecting participants are that they:
- Have relevant technical knowledge and experience.
- Represent key organisational stakeholders needed to approve decisions.
- Are available i.e. not otherwise committed to other projects and activities.
While these traditional criteria are practical and essential, it is important to also have sufficient diversity for problem-solving i.e. a wide enough range of project experiences, scientific perspectives, commercial perspectives, thinking styles and group working styles. Such diversity dramatically increases the capacity for creative problem solving to both resolve unanticipated issues and exploit unexpected opportunities. Whereas the lack of such diversity can lead to myopic decisions and inability to innovate solutions. This need for diversity applies not just to the operating process but also to governance. As one of my interviewees commented:
“The scientific advisory board was filled with rheumatology experts as the sponsor wanted the next arthritis blockbuster, so nobody noticed that perhaps some of the de-prioritised candidates could have made wonderful drugs for asthma, Crohn’s disease, etc.”
Furthermore, this diverse project team needs to be led and managed by co-project leaders with a broader skill set than traditional R&D project leaders. In addition to an obvious need for sufficient technical knowledge and peer credibility in the subject matter of the collaboration, project leaders of collaborations also need to have the following set of skills:
Collaboration project leaders must be able to nimbly plan and manage activities adaptively i.e. be able to dynamically re-plan, while working within available resource constraints, in response to a stream of unexpected problems and unanticipated opportunities. This goes beyond the usual project management skills of managing activities to set time and budget constraints. Furthermore, for the joint team to address these challenges and opportunities, collaboration project leaders must also have a strong aptitude for facilitating synergistic problem-solving in a diverse team, integrating the team’s capabilities to “co-create” solutions that individual team members would not have been able to come up with on their own. They also need to be good at finding ways to resolve in a “win-win” way those differences in opinion that will surely arise, both within the joint team and in the governance process. And finally, they also need to be skilled at influencing people and networking across their own wider organisation, both to access resources and to generate appreciation and interest for the work being conducted in the collaboration. One of my observant interviewees, an ex-David project leader illustrates this last point:
“Our collaboration with Big Pharma X went extremely well because my counterpart project leader was well-connected in her organisation, could reach out to additional scientific expertise across X as and when our project needed it, and ensured a level playing field for our project in X’s portfolio review process.”
Besides the co-project leaders, it is valuable to continuously have an executive champion from Goliath who is active in the governance process – someone who not only sees the value of the collaboration but is also an advocate in Goliath’s portfolio management process as the project takes its inevitable twists and turns. Many collaborations do start off with such a champion, often the person who had shepherded the deal through to its signing. The challenge is ensuring there is someone in this role throughout the collaboration’s lifetime since many executives move around in large Goliath organisations. Whereas the senior executive/professor from David who is overseeing the collaboration tends to remain the same over time.
The Honeymoon Period
Having set up the project model, it is critical to invest wisely in the honeymoon period, from both a procedural and a relationship standpoint. In the first 9 to 18 months of most collaborations, many of the activities are straightforward and predictable. You should take advantage of the goodwill at this stage to build a strong foundation for execution.
This is the time to establish a modus operandi by “running in” the day-to-day working process, making small practical adjustments through trial and error until both parties are comfortable:
- Formal meetings:
- Frequency, length and format – face-to-face, teleconference, videoconference
- Core agenda topics
- Participants and quorum
- Meeting style
- Other communication:
- Data file formats, protocols and IT sharing platforms.
- Long-form formal written status reports at key junctures.
- Brief e-mail updates at more frequent intervals.
- Routine for informal telephone and e-mail exchanges.
This is also the time to go the extra mile to build mutual understanding and personal relationships – appreciation of each others’ business models, strategic aims, cultural norms and communication styles e.g. how to raise an issue or ask questions in a non-threatening way.
One David CEO I interviewed told me:
“We make an extra effort to start every new large pharma collaboration by having face-to-face discussions and site visits every 4 to 6 weeks in the first year; we rotate a few different people each time so that pretty soon everyone in our team has worked face-to-face and socialised informally with their people. Yes it takes a chunk out of the travel budget, but the reservoir of trust that you build this way enables fast hassle-free problem-solving when all the unexpected things start emerging later on as they usually do.”
Driving Ongoing Execution
Once good foundations have been built, it is down to the operating and governance processes to run the project in a “smart” way. This approach involves agile and thoughtful planning of intermediate goals and activities, in response to new information emerging and within available resource constraints, to keep moving towards the overall project goals without being stuck in a rigid project plan. The co-project leaders play a critical integrative role in this “smart” project execution style by exploiting the team’s diversity to create synergy for solving problems and exploiting opportunities as they emerge. To discover or develop a new product innovation, the project team needs to innovatively address lots of distinct problems and opportunities along the way – there is often no single eureka moment followed by a predictable workflow. Instead the process more resembles a roller coaster ride with many ups and downs. The co-project leaders also need to keep the governance process in the loop as the project situation is constantly evolving, possibly requiring some brief informal discussions with relevant committee members outside of the formal process. Maintaining dialogue with the governance participants is part of the co-project leaders’ wider role to keep the project connected into their respective wider organisations for accessing resources and building interest and appreciation for the project. It can also be helpful in larger collaborations to deploy separate project coordinators in support of the project leaders, the former taking some of the load for task management and activity coordination, so that the latter can concentrate on the more strategic and value-added aspects of their role.
A separate alliance management function is increasingly the norm in most Goliaths. From what I have seen and heard, I have the sense that this investment in resources and skills could be much better exploited by both sides of the collaboration. While all the Goliath alliance management people I spoke to were positive and enthusiastic about what they were doing, many Davids have a neutral to negative view of their Goliath collaborators’ alliance managers, although there are a few positive stories too:
A lot more can be done I feel by the Goliaths to demonstrate the value-added of their alliance management function to their David collaborators, and to supplement the required skill sets of collaboration project leaders. At the same time, it could also make sense for some Davids, especially those with a lot of active collaborations, to consider deploying their own alliance management function, distinct from their project leaders. These David alliance managers could focus on orchestrating relationship building and problem resolution, as illustrated by this quote from a former David project leader:
“Our alliance manager built contacts across their organisation and spends time finding out what’s going on behind the scenes. She is a very warm person whom you could easily talk to, but at the same time is very perceptive of how things are moving, and is not afraid to step in and influence on both sides when the situation calls for it.”
Throughout the project, both sides need to make proactive efforts to stay aligned and keep the collaboration energised. In longer collaborations going into their third, fourth or even later years, there is a risk of “staleness” or “fatigue” emerging and an antagonistic climate soon builds up, as mentioned by some of my interviewees:
“If you’re not careful, after a few years you end up focussing on each other’s bad points, remembering only those arguments you’ve lost and completely forgetting why you got together in the first place.”
The frequent communication of positive aspects and joint celebration of even minor wins needs to be maintained. And the occasional swapping of new faces, carefully thought through, can also keep the relationship healthy and fresh. It is also advisable to conduct a regular “health check” via surveys or perhaps interviews and feedback by an independent third party.
Last but not least, the importance of relevant training and development should not be under-estimated. Not just the project leaders and alliance managers, but also many of the team members who are heavily involved. Such training and development would emphasise the adaptive project execution style, synergistic problem-solving, out-of-the-box thinking, communication and influencing.
In setting up the project model at the start, it is important to have sufficient diversity for creative problem-solving, co-project leaders with a broader skill set, and the continued involvement of an executive champion. The honeymoon period at the start should be used wisely to establish and fine-tune a modus operandi, and to build mutual understanding and personal relationships. This ensures a solid foundation for execution. During the ongoing execution, the co-project leaders play a key integrative role to run the project in “smart” way, emphasising dynamic planning and adaptive decision making. There is a lot more that can be done by both sides to exploit the potential of dedicated alliance managers. Throughout execution, it is essential to proactively stay aligned and keep the collaboration energised. And last but not least, appropriate training and development can greatly improve the efforts of the collaboration participants.
To ensure successful David-and-Goliath collaborations, it is not sufficient to find the right complementary partner, negotiate a win-win agreement and conduct a thorough due diligence. Most importantly, you have to get the execution right (as some industry players are already saying). As we have argued in this series of articles, you do this by focussing on addressing the execution and collaboration risks. Otherwise the gains to be accrued by R&D externalisation and open innovation will be lost in a sea of collaborations that have run aground.
Notes and References
Most collaborations will usually have a Joint Project Team (‘JPT’) comprising functional representatives from both parties, typically led by a pair of co-project leaders/managers. There will usually also be a Joint Steering Committee (‘JSC’) of senior executives from both sides to provide governance. Sometimes you might also have a Scientific Advisory Committee (‘SAC’) of independent experts. In larger collaborations, there could be various operational sub-teams reporting to the JPT, each comprising people from one or sometimes even both parties. And in collaborations with multiple projects under one umbrella, there might be a Joint Operating Committee (‘JOC’) that sits in between the JSC and the multiple JPTs. ↩
For example, one company aims in the team meetings with its collaborators to “have everyone review all supplied data beforehand, and limit presenters to no more than five summary powerpoint slides”. ↩
See for example the second mentioned theme in: “Pharma-biotech collaborations: Eight themes from Biocom’s Partnering Conference”, Mandy Jackson, SCRIP Intelligence 28 February 2014. ↩