Alliance Case Study: The Off-Site Governance Meeting By Steven E. Twait, CSAP and David Thompson, CA-AM Eli Lilly and Company uses case studies as Anticipation is high part of its internal when Xander Klung’s alliance management company arranges a training. Learn from summit in NYC to the fictional Xander’s all-too-real story. work through alliance You even can get the management issues authors’ discussion with its Finnish partner guide and attend their ASAP Virtual Workshop organization. Yet things on Jan. 29, 2015 go horribly wrong. What (details on p. 44) could Xander have done in advance to ensure a productive and successful meeting of the alliance teams? Steven Twait, CSAP, is senior director of alliance management and M&A integration at Eli Lilly and Company. David Thompson, CA-AM, is chief alliance officer at Eli Lilly and Company and is a member of the ASAP board of directors. 2 STRATEGIC ALLIANCE MAGAZINE | Q4 • 2014 EDITORIAL SUPPLEMENT Alliance manager Xander Klung stepped aboard the Boeing 737 and wedged himself into his coach-class seat, glancing around as he did so at the seven colleagues who would occupy many of the seats around him for the next several hours on the return flight to Indianapolis. He turned on his iPod, put on his noise-canceling headphones, and closed his eyes to tune out the pandemonium of luggage and people surrounding him. What had happened during the past 12 hours was an experience Xander would rather forget. Unfortunately, the events of the past day would undoubtedly resurface at year’s end as a “miss” on his performance management plan. How could the meeting of the alliance steering committee have gone that badly? He replayed the last day in his mind to figure out where it had all gone wrong. Touching down 12 hours earlier that day, everything had seemed perfect. It was a gorgeous Monday in New York City, and everyone on his company’s alliance team was in good spirits. The shuttle was waiting, just as he had arranged, to whisk the group straight to the hotel for the governance meeting. When they arrived, Xander asked the clerk at the front desk to direct them to the Birchwood Room. “Oh,” replied the clerk, “do you mean the restaurant? It’s downstairs.” Having arrived at the hotel 15 minutes late due to heavy traffic, Xander and his team hurried down to the restaurant where steering committee representatives from the partner company were already waiting. The partner 3 Q4 • 2014 | STRATEGIC ALLIANCE MAGAZINE EDITORIAL SUPPLEMENT team’s trip had originated in Europe, and their group had arrived at the hotel the evening before. Xander quickly scanned the huge dining area, noticing the large kitchen doors swinging open and closed. Small dining tables had been pushed toward the outside of the room and had been replaced by a large conference table and 20 chairs. “Not an ideal setup,” thought Xander, “but we’ll get through this I’m sure.” Team members exchanged pleasantries as they settled in for the day-long meeting. It had been several months since many had seen one another, so some catching up was in order. While Xander was enjoying a doughnut and his second cup of coffee, a partner team member tactfully reminded him that the meeting was already several minutes behind schedule. Given the full agenda, Xander realized they would do well to get to work. Xander noticed that the co-chairs were catching up over a quick conversation. Alan Peabody was the co-chair from the partner company. He was a For Xander, the shuttle-bus ride back to the airport seemed to last forever. He looked over at his company’s manufacturing representative, and the look on her face was one of frustration. 4 dynamic speaker who, if given the podium, could make even the most uninteresting topics come to life. Alan looked the part of a corporate executive, from his custom-made Italian shoes to his perfectly manicured hair. His reputation in the industry was matched only by his expertise in fine wines, and he had even published an article on a particularly rare and desirable vintage. STRATEGIC ALLIANCE MAGAZINE | Q4 • 2014 Alan knew the business well and had a knack for choosing team members who were extremely talented and sticklers for detail. Joe Simmons was the co-chair from Xander’s company. He was a no-nonsense leader who let the facts speak for themselves and had a reputation for being able to digest and draw relevant conclusions from copious amounts of data. His ability to synthesize information and transform it into working strategies and tactics had made him a powerful force in his own company. Joe surrounded himself with talented people whom he rewarded for openly challenging his own views. Joe felt that this collision of ideas made for better overall results. As he called the meeting to order, Xander quickly reviewed the agenda. While all of the topics—manufacturing capacity, the recent alliance health survey, and launch readiness in Mexico—were important, they paled in comparison to the first topic: how to improve the performance of the alliance’s product in Finland, the partner’s home country. The steering committee needed to leave the meeting with a clear decision on what strategy to employ and who would be responsible for implementing it. The eight-hour meeting got underway with the introduction of four guests from Xander’s company’s Finnish affiliate, who worked closely with five members of the alliance partner’s team who were also in attendance. This was the first time the steering committee had invited this many guests to a meeting. Both groups from Finland presented their side of the story and recommended strategies to address the product’s poor performance. “We just need another six to nine months,” committed one participant, “and everything should be back on track.” As the morning wore on, the guests from Finland continued to dominate the discussion as they defended their marketing strategy and asked for EDITORIAL SUPPLEMENT more time. When the steering committee co-chairs reached the limit of their patience, one of them spoke up, and the group agreed to stop for lunch. The plan was to regroup after the break with the goal of resolving the strategy question and deciding on the best way to move forward. After the meeting adjourned, people quickly packed their briefcases and hustled out of the restaurant to catch a taxi. Everyone had a plane to catch or wanted to beat the traffic home. For Xander, the shuttle-bus ride back to the airport seemed to last forever. He looked over at his company’s manufacturing representative, and the look on her face was one of frustration. “We never even got to my topic today,” she commented, “and this took up a lot of my time.” Xander also knew he would soon be on the receiving end of a voicemail from the representative from the Mexican affiliate, who had stood by on the phone all day waiting for his topic to be discussed. Unfortunately, things didn’t go much better after lunch. The debate continued about the product’s poor performance in Finland. Fingers were pointed, and people in the meeting seemed generally unhappy. Several options were brainstormed—new marketing materials, adding to the sales force, alternative dosing strategy, and so on—but the group couldn’t seem to align on an idea. The next thing Xander knew it was 5:00 p.m. International flights were due to take off in two hours, so he had to end the meeting without recording a decision on how they would proceed in Finland. The steering committee co-chairs agreed they would follow up via phone and try to resolve the issue. None of the other topics on the agenda were even discussed. D FOR Q uestions Actually, Xander knew exactly how they felt. The countless hours he had spent on the alliance health survey presentation seemed wasted, as his presentation never saw the light of day. Xander felt like all eyes were on him. “All I can hope is that the plane is full and they ask for one volunteer to take a later flight,” he thought. “If they do, I’m on it.” n iscussion 1. What issues have unfolded during the past 48 hours? 2. What first-order, second-order, and third-order consequences will likely result from this disappointing governance meeting? 3.What could have been done prior to the governance meeting to make for a more productive interaction? 4. Give examples where Xander should have used his vision, judgment, and influence to improve the outcome of this governance meeting. 5. What human risks are unfolding at this governance meeting? 6. What business risks are unfolding at this governance meeting? 7. What legal uncertainties are associated with this meeting? 8. At which life cycle phase is Xander’s alliance? 9. How do the personalities of each company’s leaders affect the dynamic of the governance meeting? 10. How can Xander add value to his company and to his partners? What is his role? Who are his customers? How will or should he be measured as it pertains to this meeting? Get the answers to these questions—and learn from Xander’s disaster—on January 29, 2015 at our ASAP Online Workshop. Turn the page to find out more. Q4 • 2014 | STRATEGIC ALLIANCE MAGAZINE 5 ASAP Virtual Workshop Thursday, Jan. 29, 2015—12 p.m. to 1:30 p.m. EST “LESSONS TO LEARN—OFF-SITE GOVERNANCE MEETING CASE STUDY” 1 Presented by David Thompson, CA-AM, and Steve Twait, CSAP, Eli Lilly and Company REGISTRATION IS SUPER EASY.... 2 Join the authors of this month’s editorial supplement, “Case Study: Off-Site Governance Meeting,” for a unique 1.5-hour training session based on the fictional (yet all-too-real) story of Xander Klung’s disastrous one-day meeting in New York City. Based on Lilly’s in-house training programs but designed to be relevant to alliance managers in any industry, this online workshop will explore in depth how alliance executives can prepare for and manage effective governance meetings under the most trying of circumstances. All virtual workshop participants receive the Off-site Governance Discussion Guide and Answer Key (also available for purchase separately). Thompson and Twait are donating their time and training materials for this event; all proceeds go to support ASAP and Strategic Alliance Magazine. 3 Space is limited! Register today at strategic-alliances.org—click on the Events tab. The Discussion Guide and Answer Key also is available on the site at the ASAP Store tab. Virtual Workshop: Members $99 USD | Non-members $179 USD Discussion Guide: Members $39 USD | Non-members $69 USD Below is a Sample Excerpt from Off-Site Governance Meeting Discussion Guide and Answer Key— Question 3 (previous page): Xander was the “owner” of the meeting. To ensure the highest probability of success, he could have done several things: a. Because the partner’s representatives were arriving on Sunday, Xander could have encouraged other members of his own team to travel to NYC that day to have dinner with the partner. Often, important business discussions occur over dinner, and a number of issues might have been resolved ahead of the actual meeting. b. Even if Xander wasn’t able to influence other members of his team to spend their Sunday traveling to New York City, Xander could have flown in the day before his team arrived Many of the logistical issues could have been resolved if he had arrived the night before, and it would have been an important gesture to the partner. c. Xander should have held a pre-meeting for his company’s steering committee members to review the key topics that would be discussed and to gain alignment on any issues prior to the meeting. Xander should also have scheduled a pre-meeting for the co-chairs to meet (via telecom) to discuss the agenda and align on which issues would be discussed at the meeting.
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