Strategic Alliance Magazine Q2 2017 - 49

EDITORIAL SUPPLEMENT

SEALING THE DEAL-CONTRACT
DRAFTING AND SIGNING
Whether you're agreeing to build a house or a strategic
business partnership, it is during contract drafting and
signing that the parties agree on the final blueprint and
the associated financial commitments. Alliance managers
can add value by incorporating what they've learned from
previous alliance projects and by helping the team avoid
predictable pitfalls. At Lilly, we institutionalize our experience in a centralized contract review document, which
we update as we gain new insights. Our goal is to provide a
robust, systematic method whereby alliance managers help
the strategic transaction deal team develop and negotiate
contracts that minimize risk, reduce inefficiencies (which
are inherent in partnerships), and maximize the value of
the partnership.
You can lay the foundation for an efficient alliance by eliminating high-probability issues and risks upfront. Areas to
consider include: fiscal-year versus calendar-year issues;
clear and unambiguous milestone payment triggers; and
clear dispute resolution guidelines. It is imperative that
the appropriate business and functional leadership representatives are engaged, in addition to the pertinent subject
matter experts. Not only does this help with buy-in; it also
provides valuable context and perspective to optimally
shape the contract and the resulting governance structure.
Additionally, this is an important stage in which to identify and name governance leaders, as momentum builds
for deal signature and implementation. (For more on
governance design, see "Governance By Design," Q3 2012
Strategic Alliance Magazine.)

Finally, alliance managers must recognize-and not
waste-the moment in which they find themselves. It is
easy to get caught up in the euphoria of deal signing; however, once the agreement is signed, the people who crafted
it will likely move on to the next deal, and tacit deal understandings can be lost. Don't let this happen! Now is the
time to:

Capture and prepare alliance onboarding materials.

Ask whether the deal team can be used to help
with the start up.

See whether the attorneys that drafted the contract
can also draft simplified alliance guidelines with the
alliance partner's attorneys.

Record segments of the alliance kick-off meetings
to be used for future onboarding of alliance
employees.

Develop an off-boarding document for those who
will exit the alliance.

Alliance managers who take an active role in the three
phases of alliance building put themselves in an excellent position to reduce risk and minimize inefficiencies
throughout a partnership's lifecycle, thereby creating more
long-term value for their companies. n
Brent Harvey, CA-AM, is director, alliance
management, at Eli Lilly and Company. Brent
leads teams focused on maximizing the
value of partnered assets at each stage of the
development and commercialization cycle.
David S. Thompson, CA-AM, is chief alliance officer at Eli Lilly
and Company and is a member of the ASAP board of directors.

49
Q2 * 2017 | STRATEGIC ALLIANCE MAGAZINE

Table of Contents for the Digital Edition of Strategic Alliance Magazine Q2 2017