I’m missing something here. Ernst & Young just released their annual report on the pharmaceutical industry, Progressions – Pharma 3.0 (2010). Their comprehensive study’s message is that “Successful firms will build a core competency in learning how to attach their unique assets and attributes to the changing business models of nontraditional players in complex and dynamic collaborations.” However, what is of concern is a statement from the press release, “Despite near universal agreement among pharmaceutical industry executives that nontraditional companies will help reshape the healthcare marketplace, most feel unprepared to address the challenges these new creative alliances will bring.” Unfortunately, what is not mentioned in either the report or the press release is why these executives feel unprepared.

Perhaps there is a hint of what’s causing this angst in an IBM research report issued in March 2006. In its Global CEO Study – Expanding the Innovation Horizon – the principal conclusion was that “CEOs believe collaboration is absolutely critical, but there is a problem: Although collaborative aspirations were high, actual implementation was dramatically lower. Citing a lack of the skills and expertise needed to partner externally, many CEOs refer to partnering as ‘theoretically easy’ but ‘practically hard to do.’”

I realize that these reports offer a strategic look at business model innovation and, as such, aren’t intended to delve into the operational challenges to successfully building the collaborative relationships upon which the resulting models depend. Nevertheless, what I find surprising is that the executives interviewed in both studies – four years apart – apparently either fail to recognize or skirt the reality that managing across the boundaries of “complex and dynamic collaborations” requires a different way of managing, just as they represent changing business models.

What bothers me is that there seems to be a disconnection between words and actions. If CEOs are unprepared for this new world, what IS being done to prepare? The Third State of Alliance Management Study (2009) from the Association of Strategic Alliance Professionals (ASAP), reports that investments in alliance management are stable. It would seem to me that because alliances are a type of collaborative network, alliance professionals should have a leg up on easing the feeling of unpreparedness in organizations today. Investment in collaborative skills and managing networks should be increasing. We have some evidence it is – the number of new people at the ASAP Global Summit earlier this month; some increasing press interest in alliances and alliance management; and (shameless self-promotion warning) even an increase in the number of people asking The Rhythm of Business for help in developing an alliance management capability. My concern is that it isn’t enough to bridge the knowledge and experience gap.

In addition, while managing a two party alliance and the boundary crossing that entails provides a basis in managing dynamic collaborative networks, it is just that, a basis. The business models Ernst & Young believes will reshape the healthcare marketplace will require innovating alliance management to manage the network. That is, network managers have to become ever more like choreographers or orchestrators, designing the networks, crafting value propositions that make sense for the network overall, shaping the economic opportunity so that necessary players will participate, and facilitating the appropriate level of collaboration to realize the network’s purpose. (For more on the role of the network choreographer, see our white paper, Collaborative Networks Are the Organization.)

Thus, my questions to alliance management professionals, especially those in the biopharmaceutical industries, are simple: “What are you doing to help your organization meet the challenges collaborative business models present? What are you doing to innovate yourself?

 Contact me to participate in the Practice of Alliance Management in the Biopharma Industries Studies, sponsored by Ipsen, Astellas, and the ASAP BioPharma Council.