Their union didn't start out as a particularly award-winning one. The contract research organization (CRO) Quintiles and Brussels-based Solvay Pharmaceuticals came together eight years ago and agreed to a functional service provider relationship, with Quintiles taking over Solvay's trial operations. And like many marriages, it went along fine. Nothing spectacular; just…fine. A few buzzwords and business catch phrases but nothing extraordinary.
“It's typical of most partnerships [in the industry],” says Ron Wooten, Quintiles' executive VP of corporate development. “You go in with top-line sort of benefits in mind,” but don't get into any serious detail about how you're going to accomplish them. “Solvay wanted to be more virtual, to not have tons of staff globally conducting its business. We said, 'OK, great—we'll provide that for you.'” And Quintiles did.
But when it came time to rethink their contract at the five year-mark, the two companies met and agreed that though things were good, they weren't notable in any way, they weren't outstanding.
“What wasn't happening was increasing efficiency and accuracy, and quite honestly, it's what I call aiming too low, and it's extremely common in these partnerships,” says Wooten. “We shot too low for the first five years.”
But at the re-up meeting, the two parties decided to aim higher. Much higher.
Quintiles suggested trying an intense process-improvement approach called balanced scorecard. A cousin of lean sigma and six sigma, which ClinPage has covered here , balanced scorecard involves nearly obsessive attention to the details of even the tiniest business process. The goal: to make all parts of all operations as streamlined and smooth as possible for greater speed, efficiency, accuracy and ultimately, happiness. Traditionally, companies in many other industries have used the technique to beef up internal operations. But now firms are using the ideas to make partnerships and alliances uber-efficient.
Solvay was intrigued; its executives agreed to give it a whirl.
Flash forward three years. Now both sides are beaming. Both dug in with vigor on the balanced scorecard approach, and as a result, cycle time for Solvay's trials are down by a whopping 40 percent.
This month, the firms' effort was described in the Harvard Business Review, which has not traditionally located a lot of illustrious business case histories from the pharmaceutical industry. (Here's the HBR piece, as posted on Quintiles' site.)
What exactly did Quintiles and Solvay do? It's all about establishing metrics and executing careful planning, says Wooten, that will push the envelope to improve all operations.
“The balanced scorecard approach lets you give yourself a better way to get at what you're trying to accomplish,” says Wooten. “It's better planning with very defined metrics. You set high goals and underpin those goals with great processes and metrics that help you get there. We shot too low in the first five years, so we spent the next three years planning together in a more formal way.”
It wasn't fun. “It was very painful,” says Wooten. “The number-one problem with managing alliances is the resistance to change in both organizations. But having a formal process like this forced people to acknowledge where the barriers are.”
In the case of Quintiles' marriage with Solvay, inefficient operations and layers of bureaucracy that had been in place for decades had to be undone. How to do that? For starters, by separating the alliance out from the two partners' other operations.
“The only way that you can manage this is to isolate these partnerships outside of the mainstream business,” explains Wooten. “You create a very discreet set of goals for the alliance and oftentimes they are quite different from the overall corporate goals of each member of the partnership. You have to invest in it like it's a new company. It's a very defined and serious partnership process.”
Your New Boss
In the smallest details, how does that play out? Wooten says it's a matter of choosing driven, committed employees, putting them in charge of teams, and letting them know that their goals are no longer the goals of the company, but the alliance. Their incentives change right along with that, almost as if they've got a new job with a new firm. In balanced scorecard-speak, it's called “living the alliance.”
“You get a dedication of talent, and you say, 'For X period of time, this is how we're going to judge you, and these are the metrics and objectives.' That is a technology of partnering that's a must if you're going to overcome the history of alliances, which is poor,” Wooten says.
As part of the balanced scorecard-infused partnership, the two formed joint clinical teams for each compound that Solvay had in development. In addition, functional teams were formed and staffed by people from both companies. A joint development committee handled oversight, set goals and scrutinized progress. Of course, it all came with a very detailed strategy map so there was no ambiguity about what the goals were and what everyone needed to focus on.
Wooten acknowledges that the rest of the industry is catching on to this. “The more enlightened pharma companies” now have alliance management groups, he says, adding, “They've figured out that, over time, if they don't have a true methodology for partnering, then they're not going to be successful.” But are they doing the extremely granular, aggressive and team-focused balanced scorecard approach? Not that Wooten's seen. “This is a little novel,” he acknowledges, adding that it really shouldn't be.
Says Wooten, “There's nothing magic about coming up with initiatives to increase efficiency and productivity. It's: how can you do it within a bureaucracy that was built over the last 40 or 50 years, with more bureaucracies built around those bureaucracies to support it. That's what's key.”
Together, Quintiles and 10,000-employee Solvay have worked on 90 trials from Phase I to III. Now, productivity's way up, time lines are much shorter, both parties are ecstatic and Harvard thinks they're the most. Only downside? Solvay is being acquired by Abbott, and thus the future of the hyper-productive alliance now hangs in the balance. What will happen? “That's yet to be determined,” says Wooten.
—by Suz Redfearnd9A2t49mkex