Two large, multi-national pharmaceutical companies were in a global alliance to co-develop and co-market a groundbreaking drug for the first non-surgical treatment of a common, unmet, medical need. Having just reported positive Phase III clinical data for a compound that holds blockbuster potential, the partners were both enthusiastic about the drug’s promise and aligned about its strategic and financial importance to each of their organizationsHowever, having been in the alliance for over ten years, the partners had developed a complex and interdependent history together. During the course of the relationship a variety of poorly-managed matters occurred which had set the stage for future operational challenges. Such matters included:
the compound, which was originally not important to one partner, had become increasingly more important as it continued to demonstrate promising clinical results; this initial lack of commitment frustrated the partner organization who had been fully dedicated to the compound from the beginning;
individual players had come on and off the alliance during key transitions in the development cycle, resulting in lost information and knowledge;
although a formal set of governance committees had been created, they did not meet regularly and there was a distinct lack of clarity regarding the specifics of their roles and responsibilities;
ill-defined and fluid membership of these governing bodies made it difficult to receive the right information, make decisions, or make headway on issues; and
the absence of having ever developed a joint project plan led to a series of perpetual disconnects, making it nearly impossible to ever get anything done on the same timeline.
Symptoms of a Damaged Relationship
In the absence of having ever explicitly discussed how to manage the relationship, and in the face of the companies’ significant organizational and cultural differences, issues kept cropping up and were manifesting themselves in ways that were creating significant, paralyzing conflict. Ultimately, the relationship deteriorated to a point where it was laborious to get anything done quickly or done well, and personal relationships were contentious at worst, apathetic at best. In particular, people on both sides of the alliance were reporting:
- A pervasive lack of trust
- A tendency to question one another’s motives and assume bad intentions
- Festering, unaddressed conflicts
- Feelings of being disrespected or coerced
- Belief that the other side is unwilling to be transparent
- Retaliatory behaviors and actions
- Interpersonal issues
- Widespread sense of resignation — "this is just the way it is — we can’t do anything about it"
Projected Implications of Neglecting the Damaged Relationship
Having worked for over a decade with no guarantee of the compound ever coming to fruition, the positive Phase III clinical data finally made the partners come to see the drug as a reality. Feeling more pressure than ever to make the alliance successful, they realized:
They would have to collaborate closely in order to file the New Drug Application (NDA) with both domestic and international regulatory authorities, and
if the current alliance situation was not resolved, they could suffer a domino-effect of serious, negative consequences:
- The target registration dates for the NDA could be missed
- Frustration over the missed dates would likely lead to finger-pointing, anger, and an even further damaged relationship
- The eventual commercialization of the product could very likely not be optimized because they would have to, but not want or be able to, work together
- They would suffer a loss of $1,000,000.00 for every day the drug was not on the market
Recognizing the distressed relationship could potentially derail the alliance, force them to incur exorbitant financial losses, and undermine their unique market opportunity, the partner organizations jointly agreed to use Vantage Partners to design and implement an "Alliance Re-launch" process to get the alliance efficiently and effectively back on track.
Phase I: Diagnostics and Alignment
Vantage engaged in a rapid series of diagnostic interviews with 40 project team members from both organizations to better understand and diagnose the alliance challenges and their root causes. Project Management and Senior Management from both companies agreed with Vantage’s diagnosis and then asked them to develop a Phase II re-launch implementation plan for directly addressing these issues.
Phase II: Implementation of Re-Launch Plan
Vantage and the Core Team of Project Managers and functional team members worked closely over the course of several months on the following series of activities designed to move the alliance out of gridlock and back on track to reach its objectives.
Heeding Vantage’s advice at the end of Phase II, both companies invested in committing a full-time "Relationship Manager" to the alliance, both of whom were jointly responsible for monitoring the day-to-day relationship and for driving the implementation of the re-launch protocols, behaviors, and plans.
As soon as 6 weeks following the end of the re-launch, the Relationship Managers conducted a "health check" on the alliance, which reported the following results:
- Increased efficiency in day-to-day operations as a consequence of more frequent and open communication
- Successful development of their first integrated joint project plan
- Decrease in time taken to get decisions made as a result of clarity around decision-making processes and roles and responsibilities
- Dramatically improved personal relationships — individuals that had originally been identified as "the problem" on the alliance were being perceived as valuable and collaborative
- Less issues arising as a result of the close monitoring by the new, fully dedicated, Relationship Managers from each company who were spending time on site at the partner organization
- Significant decrease in the number of issues unilaterally escalated to senior management; many issues reported being resolved without escalation
- An arsenal of processes and behavioral tools and skills which could be applied to all their other alliance relationships
Caution for the Future
Despite the fact that the alliance is reportedly on course and people are once again optimistic, the partners unfortunately run a high risk of another derailment. Currently, project team members at both companies have adopted the agreed upon processes and behaviors, enabling day-to-day relationship and operational success. However, as time goes on, should the partners fail to continue the discipline of working together according to the agreed approaches, it is more likely than not that their operational and relationship success will cease. After years of working together on this alliance, it is critical that all people continue to exercise discipline in working together in order to optimize the chance of successfully bringing this ground-breaking drug to market.