To be effective, alliance management requires successful collaborative planning. From management to milestone tracking to project and partnership completion, an alliance manager must effectively manage every aspect of an alliance, including planning for when things go wrong, an activity essential to mitigate alliance associated risks.
These risks include challenges related to decision-making, power dynamics, and aligning interests among partners amongst others.
Proactive identification of potential issues and the subsequent development of mitigation strategies will not only foster regular, transparent communication but also define clear roles and responsibilities, a crucial step towards establishing robust governance structures.
In the Q2 2023 Strategic Alliance Quarterly, Michael J. Burke, Editor in Chief, identifies the following as just some of those potential alliance risks.
“There are business risks that can affect the alliance: The science doesn’t support the drug candidate. The product technically fails. A competitor gets there first, or with something better. The market changes and no longer wants what you’re selling.
And there are risks specific to the alliance itself. You entered into the collaboration because the partner has something or can do something you don’t have or can’t do—or not very easily or efficiently. But what if the partner doesn’t meet their commitments? Or does so but not on time? What if you can’t agree on critical decisions around clinical trial protocols, joint solutions integration, resource allocation, or manufacturing quality control, for example? What if your partner gets acquired or goes public? Or their strategy and priorities change?”
Burke’s article then explores actions to be considered to mitigate these risks, speaking with industry experts to review real-world examples.
But let’s take a step back from scenario planning and first examine the key elements of best practice that an alliance team can implement to prevent risk.
We identify 5 key elements:
1. Transparent communication and open dialogue:
Establishing open channels of communication encourages regular dialogue among alliance partners, addressing concerns and resolving conflicts proactively.
2. Defining clear roles and responsibilities:
Aligning expectations and clarifying individual responsibilities ensures mutual understanding of each partner's role in the alliance.
3. Establishing robust governance structures:
Designing effective governance frameworks and decision-making processes ensures representation from all alliance stakeholders.
4. Power balance and decision consensus:
Identifying potential power imbalances and implementing mechanisms for consensus-based decisions fosters equitable distribution of decision-making authority.
5. Aligning strategic objectives:
Common understanding of alliance goals and objectives, regular evaluation of progress against milestones, and aligning individual partner objectives with the alliance objective.
In addition to implementing best practice into alliance processes, organizations can leverage alliance management platforms for alliance risk assessment. Technology can automate many of these processes, provide real-time analytics to identify potential governance risks before they grow to a problem, and provide real-time data sharing for enhanced transparency.
As an imperative to minimize risk, alliance professionals should carry out regular reassessment of risks and mitigation strategies, involving all stakeholders, and adapt these based on experiences and feedback.
How allianceboard helps you manage strategic alliance risks
allianceboard makes risk management in strategic alliances very easy.
- Classifying risks – allianceboard allows you to classify your alliance risks in any way that makes sense to you and your organization.
- Assessing probability and impact – Probability and impact are visualized for each risk – and are aggregated for each alliance, for each partner and across the entire portfolio for engaging discussions with stakeholders.
- Mitigation planning – mitigation plans are maintained directly in allianceboard, and compliance with risk policies are visualized for each alliance, partner and portfolio.
- Sharing risk information – risk information is shared easily with strategic alliance partners
- Risk reviews – conduct risk reviews internally and with each partner with ease using our intuitive platform.
You can learn more about managing risks in alliances in this article.
Want to chat to us about your alliance risks? Get in touch; email@example.com.