By Ameriga Fanigliulo
Managing conflicts is one of the arts alliance managers need to master to enable effective decision making and let their alliances flourish. Seasoned alliance professionals know that alliance conflicts will inevitably occur: it’s not a question of if, but when. This is simply because parties might have intrinsically different company interests, cultures, and short-term objectives that may diverge from joint alliance goals and a long-term outlook. The danger is not in the conflict itself, but in what could go wrong once conflict surfaces.
So how do you handle alliance conflict with care? Based on my experience, I believe that conflicts are best resolved when all parties talk it through, rooted in facts and common sense, and with the priority intention to resolve it. This approach of problem assessment and option evaluation tends to result in creative solutions that improve the overall alliance strategy, and that would not have existed if the team weren’t facing a challenge.
Think of it as the signature dish of a premier chef: a balanced mix of flavors (sour, sweet, salty, spicy), consistencies (crunchy, soft, gelatinous), and genuine ingredients. The ultimate balance in an alliance comes from the combination of components that partners bring to the table, and the key ingredients are fundamental good faith, transparency, trustworthiness, and willingness to solve problems. This is the attitude that alliance managers should role model for the entire alliance team when facing a conflict.
The master recipe
Here’s the foundational master recipe for working through conflict challenges:
1) Get people together. Meet, listen to both parties’ positions, and try to understand where the pain points are. What is driving the partner’s position? What is the ultimate goal they want to achieve?
2) Clarify the problem. Assess where the disconnect comes from, understand the other party’s motivations, and determine the implications of the opposing positions. Understanding the motivation behind a position, whether it’s saving time to market, saving money, saving reputation, helps in framing the problem.
3) Bring in subject matter experts for support. To clarify the problem you need to understand the details. Have your team experts walk you through their pain points and ask them to look at the problem through the partner’s lens. Keep the discussion fact-based and grounded in real-world operational details.
4) Leverage your governance structure. If necessary, take the issue back to your Operating Steering Committee and ultimately to the Joint Steering Committee (JSC) for resolution. The JSC, after all, includes members from both partner companies, and they should be the arbiters of what’s best for the alliance going forward.
The collaborative mindset: kind but firm
We often talk about the “collaborative mindset” in alliances. This is certainly a good overarching concept, but there’s more to it: working on an alliance requires agility, flexibility, adaptability, and quick thinking.
In order to achieve an effective conflict resolution you need to encourage your team to be open, to actively listen, and to find creative solutions that can satisfy both parties. But being open and collaborative does not mean “being nice” and agreeing with whatever the partner proposes. It is in fact fundamental for you, as alliance managers, to safeguard, with equal rigor, the interests of your own company as well as the partner’s: you’ve entered an alliance to generate value for all parties investing in it, and this guiding principle should be respected at all times to prevent major disruptions of the relationship down the road.
Alliance managers should exercise what I call a “kind firmness,” walking a fine line between respecting the partner’s position and preserving the interests of their own organization, using a gentle and savvy touch.
Coffee, cocktails, and conflict
While you’re busy working with stakeholders and your alliance management counterpart to resolve the conflict, the unexpected may happen: You learn that senior executives from both partner companies were talking over coffee and seemingly made commitments that contradict the direction taken by the formal alliance governance boards. Now what?
Senior leaders often encounter each other in settings outside everyday alliance operations: in a social situation or at a conference, at a tradeshow or elsewhere. And over coffee, lunch, or an evening cocktail, they get to talking. If a problem has been reported with the alliance, one executive or the other may say, “I’ll talk to the team and I’m sure they can do what you’re asking and fix it.”
Except maybe they can’t. Maybe the JSC has decided to handle the issue another way, for specific reasons. Maybe the executives’ quick fix has already been determined to be off the table. Maybe there’s more context to the problem than the executives are aware of. Maybe the problem itself has been overblown by one stakeholder or another, and isn’t actually much of a problem at all. But your alliance manager counterpart or your boss or your executive sponsor informs you of the executives’ “brilliant idea” and you are now requested to execute on that.
Having been through this scenario before myself, I have a few pieces of advice for other alliance professionals who may face this situation:
- Keep cool. Don’t get reactive and emotional just because you are caught off-guard. You have to be the voice of reason for the alliance.
- Ask questions. Find out exactly what was said and by whom, what was agreed to, if anything, and whether any actual commitments were made, rather than just a “Wouldn’t it be nice if we could…” kind of conversation.
- Ensure that you have internal alignment. This means going back to your own senior leaders, relying on your subject matter experts, and making sure everyone in your organization is still on the same page with respect to the alliance.
- Leverage your governance structure. Your legal and business development colleagues, and hopefully yourself, have spent an immense amount of time crafting the contract clauses describing the alliance governance to ensure that it supports decision making in real life, especially in situations of conflict.
- Be open to change. Assume reality is dynamic and that external factors as well as internal views may shift. Even the experts’ opinions may change based on new facts. It’s OK then to revise the decision made by the JSC and bring the problem back to the table for a new assessment.
Inside the sandwich
Going back to the cuisine metaphor, I would call this the “sandwich situation.” Senior executive sponsors are the to player, with alliance operations forming the bottom layer of the “bread.” In the middle are layers of governance, most notably the JSC, the “meat” of the alliance, where the alliance strategy should be championed and steered by design. If these three layers are disconnected, or one of the two bread layers is half-baked or burnt, your sandwich falls apart or tastes awful.
What about alliance managers? Well, they’re like the ketchup, mustard, or mayonnaise that holds all the ingredients together and gives the sandwich its flavor: the hard work is to keep those multiple layers aligned, at any point in time, and to reflect this alignment when talking to the alliance partner, at any level. It takes resilience and courage.
Time for a Change
Even with the right approach, however, the parties may not be able to find common ground and move forward. Such an impasse can create a paralysis that requires a huge amount of time to resolve, involving multiple internal and external stakeholders and potentially spelling doom for the alliance. It may require the alliance managers to talk heart-to-heart and eventually trigger a more formal escalation process up the governance ladder.
No matter what happens, as the alliance leader you need to stay ahead of the situation and detect when an insurmountable hurdle may be coming up, one that cannot be managed with the same ingredients just assembled differently, but that requires a profound change of alliance strategy (or even, in the most extreme cases, termination).
If that time comes, don’t be afraid to consider the entire menu of options, up to and including changing your restaurant reservation!
Ameriga Fanigliulo, PhD, MBA, CA-AM, is the director of global alliance management, biosimilars, at Sandoz.
About the alliance leadership spotlight series
The alliance leadership spotlight series is a joint initiative of The Association of Strategic Alliance Professionals (ASAP) and allianceboard to share practical knowledge in the alliance management community. It showcases Alliance Management professionals taking the lead in addressing challenges and driving alliance success.
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