place, companies are beginning to see
the business value of broad partnerships
to increase operational efficiencies and
reduce ramp-up risks,” says Borzu
Sohrab, principal consultant for
Crescent Biomedical, a Los Altos,
California, USA-based consultancy.
“Many companies have also found that
they can reduce headcount and increase
competencies through partnerships.”
He points to the project to develop a
drug-eluting coronary stent launched by
U.S.-based medical device manufacturer
Boston Scientific and Canadian pharmaceutical company Angiotech. In this
case Angiotech brought the intellectual
property for the anti-clogging drug that
would coat the stents, while Boston
Scientific had the manufacturing
expertise.
“They were able to leverage manufacturing competencies in a complementary
manner,” Mr. Sohrab says, adding that
device and pharmaceutical companies
are developing more joint projects as
they race to bring new products to
market.
But partnerships can also backfire
if careful due diligence is not conducted,
warns Gene Smith, founding partner
of Smith Brandon International Inc., a
strategic management planning consultancy based in Washington, D.C.,
USA.
“There are a lot of inflated credentials right now,” she explains. “Whether
it’s across industry or across borders, it’s
all the same. There are huge issues
involved with choosing partners.”
From verifying that companies
actually exist to evaluating their financial, legal and regulatory issues, it
takes a lot of scrutiny to ensure potential partners are legitimate and solvent
for the long term.
Because of the recession, it can be
particularly difficult to assess the financial stability of potential partners.
Companies that may have been thriving
12 months ago when their last financial
reviews were conducted are now struggling. Funding for projects may also
Get to know your potential
partner and be objective. Ask a
lot of questions and be prepared
to offer your information in return.
—Gene Smith, Smith Brandon International Inc., Washington, D.C., USA
have changed as governments rethink
the value of investing funds in major
undertakings or banks pull back credit
lines.
“Credit issues are the biggest problem
today,” Ms. Smith says.
One of the best ways to reduce risks
and make a more calculated choice is to
thoroughly research a company’s leadership team, recent project success rate,
and any cultural and political issues that
may be occurring in their region or
industry. After that, find out if the company is a good technical and cultural fit
through face-to-face meetings and open
dialog about what each party can bring
to the project.
“Get to know your potential partner and be objective,” Ms. Smith
says. “Ask a lot of questions and be
prepared to offer your information in
return.”
The “getting to know you” part of
the process always takes longer than
expected, but she urges companies to
resist the temptation to skip ahead.
“Step back and be patient,” Ms.
Smith says. “If you do your due diligence on the people, the politics and
the finances, you can avoid having to
ask yourself ‘Should we have known
about that?’ when problems arise
down the line.”
TAKEAWAY: The right partner can
reduce risks and improve delivery time,
but the wrong one can lead to project
failure.
