ISSUES The partnering · During my years of consulting with corporations in the organisational arena, as was the case when I worked as a pharmaceutical executive, I have seen all

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If you know of any pharma or biotechcompany with no strategic alliance,collaboration agreement or partnership,

it is probably located on Mars. The oldcompany model used to read: ‘corecompetencies’ and ‘the rest’. The rest wasalso called outsourcing and it meant acheaper pair of hands. That was around acentury ago. The new model reads: don’t

know where ‘me’ ends and ‘they’ start.Sourcing – in and out – and partnering-collaborating-’alliancing’ are part of thefurniture. The Spanish philosopher Ortegay Gasset’s most famous quote is: “I am Iplus my circumstances”. Had Ortega been amodern CEO he would have said: “I am Iplus my web of connections”.The newmodel also implies ‘sleeping with the

enemy’ because roles are imposed bypartnerships and are not necessarily whatyou would have chosen.The possibility ofinteractions with others in your sectormake you likely to be competitor andpar tner all in one, at the same time.Collaboration plus competition hasgenerated co-opetition, a managementconsulting term that is very clever and verymuch a buzzword.

If partnering is now a way of life, the wayof life, you would have thought that theindustry had learnt a thing or two abouthow to do it. The statistics are morepessimistic than that – many partnershipsand alliances fail.The percentage varies withthe method of assessing them, but somepeople claim that only 10% are reallysuccessful, another 20% or 30% so-so, andthe rest fail miserably. Failing is not just aquestion of not deliver ing expectedoutcomes. It is often the case that it wasdelivered, but then space and time are takenover by two legions of lawyers fightingagainst each other for a grey IP.This is oftenan incredible war where legal generals andsoldiers on both sides win and go homewealthier, with a healthier bank account, nomatter what.

If you are interested in the nitty grittyof partnering, google it. You’ll find morestatistics than you can digest and a long

The partneringdramaLike the components of a Greek play,

the key to successful deals revolves

around three main characteristics,

says Dr Leandro Herrero

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litany of reasons for success and failurewith their inevitable cr itical successfactors. It’s worth reading all those books,listening to all the scholars (well, a bit) anddiligently following the multiple mile-longchecklists of dos and don’ts. Fine. But Ithink that we could take partnering as adrama in the Greek sense: like performinga stage play.

As a drama, the partnering performanceneeds three components: a stage, a plot andcharacters.The stage, or the set, hosts thingssuch as the framework for the deal, thecontractual agreement, the conditions incompany A and company B, the nature oftheir relationship, the IP, the statements ofgoals and transactions, the rationale for thecollaboration, all the financials and all theintended and unintended PR. The plot iswhat actually happens in the relationship,the dynamics of the deal itself, the chain ofevents, the project-managed life of thealliance, the script generated for internaland external consumption, the hiccups, thejoy, the tears and all the outcomes. Like anyplot, it may contain intr igue, passion,surprises, narrative, tragedy, comedy andeven murder. Finally, the characters are theobvious players, from the leading actors –the headline-making CEOs – to thesupporting cast of project managers,scientists and commercial people.There maybe very few characters involved, or lots ofthem, as troupes. Like in any play.

During my years of consulting withcorporations in the organisational arena, aswas the case when I worked as apharmaceutical executive, I have seen allpossible combinations of stage, plot andcharacters developing into a dailypartnering and alliance drama. The mostsignificant of these combinations have beenthe following:

•Great set, good plot, pity about theacting. The partnering deal had a goodset-up, a solid programme of activities and awell crafted and project-managed plan. Thealliance was killed by the players who didn’tunderstand each other, became paranoidand spent all the time fighting, one way oranother. Cultural differences, as usual, wereblamed and brought in to explain the fiasco,which was, however, clearly due tomanagerial incompetence. This category ofpartnering drama is in my experience a bigone.

•Low-budget set, terrible plot, savedby excellent acting. The partnering set-up is minimal or non-existent. Things feelhalf-baked despite the declared intentions ofthe PR people. It star ts bad, butmiraculously it carries on despite a terribleplot. Tragedy is always at the door.However, incredible actors seem deter-mined to make it happen. They navigatethrough all the obstacles with great spirits,often recreating both set and plot as they goalong. Outcomes are delivered by thesedetermined people, not because of, butdespite the original conditions set up bytheir companies.

•Unmemorable set and unknownactors, but, boy, what an adrenaline-fuelled plot. Nobody at the end reallyremembers the companies involved, letalone the players who never got anypublicity but seemed to have done a goodjob, perhaps. However, everybody doesremember the plot: the exciting promisingdata that rocketed stocks and triplicatedmarket capitalisations in a few days, only tofall off the cliff a month later afterunexpected safety concerns. The deal iskilled, not, not yet; forgotten, not, not yet –a phoenix resurrects in the form of an out-of-the-blue acquisition that rescues theproject. Are they mad? Do they knowsomething we don’t know? Stay with us,after the interval.

•Luxury set, Oscar-winning actors, butthe plot is impossible. Huge amounts ofmoney have been poured in and the PRpeople are billing high. This is theequivalent of another Disney blockbusterwith Elton John playing at the piano. Thestakes are high. Suddenly, months later,impolite members of the audience startshouting that the emperor has no clothes,that the plot is impossible and that it wouldtake a miracle to show any meaningfulresults, unless one is prepared to endure tenyears of clinical tr ials, involving a fewhundred thousand patients, which,incidentally, no epidemiological study hasever shown to really exist.Why on earth didthey start that enterprise, becomes a goodquestion. The impossible plot makes senseonly from the perspective of corporate andpersonal egos which are finally analysed. Bywhich time, the public has left theauditorium.

•Poor set, amateur actors, ends intragedy. This is, together with my firstcategory, another big one. Everything thatcan go wrong goes wrong here because,among other things, nobody in the dramahas a clue of how to deal with relationships.The deal or iginated one day on a golfcourse between two, not very busy, CEOs.The performance ends in tears. In one caseI remember well, the scenario was exactly asdescribed. The deal was ordered with duediligence as minimal as the amount of toxstudies that ‘the seller’ had performed. Youwould have thought that the play was shortdue to murders early on in the first act but,believe me, it went on and on accumulatingtragedy potential for a long time.The powerof amateurish mediocrity is enormous.

Greek tragedies often involved thepresence of ‘the chorus’, which apparentlystarted as a soloist singing about some sort

of hero and then developed into a troupe ofsingers joining in and singing to each other.Proper dialogue was then injected and a‘tragedy’, the Greek version, was born.There are partnerships and alliances thatresemble the Greek chorus. Bits and piecesare added all the time and new players,commercial ones, for example, come in andelevate the partnering to an ever higherlevel of complexity. Suddenly it’s all chorus,everybody is singing, accountabilities beginto dilute and it feels like ‘a big thing’, nevermind the original plot. Greek tragediesdidn’t always have a predetermined script.The actors improvised as they went along.At some point, they would generate aprogressively impossible and implausibleplot, full of loose ends, unfinished sub-plotsand, quite frankly, what you and I wouldcall ‘a fine mess’. Solution? Of course. Thedeus ex machina (this is the Latin version)was born.A mechanical crane would deliver‘gods’ on stage to solve the plots by decreeand end the improbable journey towardstotal incoherence and chaos. In our strategicdeals and partnerships we have ourequivalent of deus ex machina.

Months later, members of the

audience start shouting that

the emperor has no clothes

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As in Greek drama, I am not sure whodecides when to lower the crane and sendthe gods. Maybe a god of gods? – which iswhat we in business call ‘the market’.Whenour plots get very, very messy, incrediblymessy, the god-market sends an M&A, atakeover, a boardroom coup and the firingof CEOs, an investigation by the USSecurities and Exchange Commission, aninside trader with perhaps a timely leak ofscientific data, or a really ugly challenge ofIP rights. Believe me, bad as they all maysound, it is sometimes the only way to getout of the mess and save at least some face.After all, the actors are no longer followingany script, if there ever was one, and are justhostages to fortune – that is, caught by ‘themarket’. I have always understood theexpression ‘market forces’ as a combinationof intense gale-force winds, very dark skiesand a colossal bearded god pointing itsfinger at us with an ‘I told you so’ look. Soperhaps I am not that much off track withthe similarities between Greek drama andbusiness deals.

From the three factors of partneringdrama – stage, plot and characters – I ameducationally biased towards the importanceof the latter. I do know that good actors cansave the day, and that, sometimes, we mayhave to settle for the statistically higherpresence of mediocre plots and more or lessacceptable sets. But actors can make thedifference. The virtual non-existence of an‘acting school’ for our partnerships, alliancesand strategic collaborations never ceases toamaze me. Our scientists and technicalpeople are often sent to ‘do the deal’ withhigh scientific and technical knowledge andvery poor understanding of anything else.They often know little about negotiation,the psychology of the deal, the differencesbetween people in such dimensions as theway we make decisions and use information,team management, people management,conflict management, relationship manage-ment and, dare I say, plot management. Inthe best of cases and, in bigger companies,there may be some sort of ‘training’involved. But relationship management has

less to do with training than skilldevelopment. Our partnering drama couldbe much better if we were to focus on thecharacters and support them with all thenecessary tools and education to mastercollaboration. Mastering collaboration istoday’s competitive advantage, not 24/7worrying and fighting the competition. Butwe treat it intuitively. As a leading pharmaexecutive declared at a recent prominentpharmaceutical conference on partnerships:“We create the deal and then we pray, orsend in the lawyers, or both.” I see nodifferences with Olympia. No wonder theGreeks used to say “nothing new under thesun”.

Dr Leandro Her re ro, a psychiat r i s t bybackground and long time pharmaceuticalexecutive, is the CEO of The Chalfont Project,a consulting firm focused on organisationaldes ign, leadership, behavioura l c hangemanagement and human collaboration in thelife sciences. He writes the monthly column‘Management matters’ in Scrip Magazine.