Turn Conflict into an Advantage!

Lena Frank

Kevin Little

David Thompson

September 15, 2017

WHY DOES MANAGING CONFLICT MATTER?

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Types of Risk

Total Risk = (Business Risk + Legal Uncertainties)

Human Risk

©2017 Eli Lilly and Company - Do Not Duplicate 3

Ris

k

Inefficiencies

Functional Inefficiency

Territory(FIT)

• Successful alliances reduce risk and inefficiencies

• Eliminate risk first then start eliminating inefficiencies

• At what point are you efficient enough? How do you know that?”

Inefficiencies

©2017 Eli Lilly and Company - Do Not Duplicate

AgendaOften, alliance members consider conflict to be negative and strive to reduce or eliminate it from the relationship. However, this session will show attendees how conflict can actually be positive for an alliance. Well-managed conflict can result in growth, innovation, enhanced communications, and improved decision making.

• Introduction to the value of conflict

• Case Study 1

• Conflict Modes

• Round Table Discussions – Managing conflict and alliance inflection points

• Building the conflict value toolbox

• Wrap up

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INTRODUCTION TO THE VALUE OF CONFLICT

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There are are four distinct ways that human beings can resolve conflicts in organizations*:

Avoidance (do nothing, allowing the passage of time to change the circumstance and perhaps resolve the conflict);

Power play (use force to bring about change);

Higher authority (a boss, grievance panel, arbitrator, judge, or jury decides the matter);

and Collaboration (the parties work together through direct talk or through an assisted process such as mediation to create a mutually agreeable solution).

*Controlling the Costs of Conflict: How to Design a System for Your Organization. Karl A. Slaikeu, Ralph H. Hasson. 1998.

Responses to Conflict

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Precedents for Constructive Conflict

Within a Learning Organization

• Creative tension: “The gap between vision and current reality is also a source of energy. If there were no gap, there would be no need for any action to move towards the vision.”• The Fifth Discipline: The Art and Practice of the Learning Organization. Peter Senge. 2nd ed.

2006.

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Conflict in Innovation Management

• “…very few ‘disruptors’ are savvy enough to exploit conflict for commercial gain. Doing so means exploiting disagreement, fostering debate, being open to one’s limitations, and managing emotions.”• “How to Use Conflict to Unlock

Creativity”. Sudhir Venkatesh, 2015, Fast Company

“The Capabilities Your Organization Needs to Sustain Innovation”. Hill et al. 2015, HRB.org

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Creative Conflict• “Through conflict, design teams work to

become aligned in their understanding”. • “Designing Together: The collaboration and conflict

management handbook for creative professionals”. Dan M. Brown. 2013.

• Pixar BrainTrust: “…candor is only valuable if the person on the receiving end is open to it…”. • “Creativity, Inc.”. Ed Catmull, 2014.

• Despite differing opinions, requires Trust in shared goals

• So, what about Alliances…?10

HBR On-Line Article: The Right Kind of Conflict

https://hbr.org/2016/12/the-right-kind-of-conflict-leads-to-better-products

Analysis:• Lilly recently analyzed

14 years’ worth of Voice of Alliance data

Finding:• Irritation with the

alliance partner increased the probability of technical and commercial success of an alliance product

©2017 Eli Lilly and Company - Do Not Duplicate 11

CASE STUDY A

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Group Assignments

• Table Introductions

• List the major issues with the meeting from a conflict standpoint

• For each issue, list the best way(s) to manage or prevent

• Table leads to report out

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“Terrible Meeting” Video

Terrible Meeting (Part 1)

https://www.youtube.com/watch?v=rFeA-pM0o8Y

©2017 Eli Lilly and Company - Do Not Duplicate 14

Group Assignments

• Table Introductions

• List the major issues with the meeting from a conflict standpoint (5 minutes)

• For each issue, list the best way(s) to manage or prevent (5 minutes)

• Table leads to report out

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“Terrible Meeting” Video

Terrible Meeting (Part 2 –What the experts say)

https://www.youtube.com/watch?v=rFeA-pM0o8Y

©2017 Eli Lilly and Company - Do Not Duplicate 16

CONFLICT MODES

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Thomas-Kilman Conflict Modes

Competing(Win/Lose)

Collaborating(Win/Win)

Avoiding(Lose/Lose)

Accommodating(Lose/Win)

Compromising(Lose/Lose)

Ass

erti

ven

ess

CooperativenessLow

Low

High

High

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Managing Conflict

• Productive Conflict• Reinforces and builds trust

• New ideas

• Solves problems

• Improves performance

• Allows creativity

• Improved processes

• Increased understanding

• Improve relationships

• Non-productive Conflict• Poor morale

• Destructive behavior

• Reduced productivity

• Increases poor performance

• Lack of results

• Waste of time

• Potential ruined relationships

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Productive Conflict

• Managing your return on conflict• As an Alliance Manager, when do

you step in and when do you let it go

• Which topics will need close management

• How do you manage the variation between different relationships, teams and individuals

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Managing Productive Conflict

• As a group discuss• What trigger points do you use to determine when conflict (or lack of conflict)

has become non-productive

• When do you intervene and when do you let it go

• What are the ways that you can intervene

• 10 minutes

• Table leads to report out

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Bringing Out Productive Conflict

Do you know what the “hot” topics were during the agreement negotiations

What is the best way to manage these items?

Understand other cultures Is conflict very uncomfortable?

What phase is your alliance in ?Be aware that alliance teams may become too complacent 4-7 years into the alliance

Scanning the horizonWhat major risks could be coming up and need early discussions that everyone is ignoring

Check up on the teams to find out what has been “swept under the rug”

Make sure risks and issues are being identified and discussed

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ALLIANCE INFLECTION POINTS AND GETTING VALUE FROM CONFLICT

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Value Producing Conflict

• In tables, list those inflection points in biopharmaceutical alliances that ensuring the right level of conflict will result in the greatest return (4 minutes)

• Discuss if this list differs between small and large biopharma (4 minutes)

• Discuss how this list may differ when working with academia, non-profits, and other industry participants (4 minutes)

• Examples• Ph2 or Ph3 study design

• Commercialization preparation

• Decisions concerning early compound targets

• Publications

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A few Value Producing Conflict Inflection Points…..

• Ph2 or Ph3 study design

• New indications/studies

• Commercialization preparation

• Patent cliff

• Public announcements

• Regulatory submission

• Discovery target selection

• Publications

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What’s in your tool box

1. Too much conflict

2. Not enough conflict

3. When conflict adds the most value

4. Key inflections points to manage

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Conflict Intervention

• Before start of meeting the Alliance Manager requests permission to intervene if needed

• Alliance manager works with internal team to understand how to manage anticipated conflict

• Alliance managers from both companies work together to coordinate intervention strategies

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Pearls of Wisdom

✓Manage Risk

✓Optimize Inefficiencies

✓Focus Resources where they Matter Most

✓Ensure Strong Governance

✓Document Wisely

✓Sharpen Conflict Management Skills

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Wrap Up & Q&A

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Time summarySections Who minutes

Introductions All 2

Why does Managing Conflict Matter Dave 5

Value of Conflict Kevin 5

Video A Part 1 (conflict) Dave 5

Team Exercise – Video A All 15

Video A Part 2 (conflict) Dave 5

Conflict Modes Lena 5

Managing Conflict Exercise All 15

Product Conflict Exercise (inflection points) All 15

Tool Box Summary Kevin / Lena 10

Wrap up / Q&A Dave 8

Total 90

Turn Conflict into an Advantage!

Session Workbook

September 15, 2017

• This Workbook is to assist your discussion group’s capture of various discussion points as we move through today’s workshop

• The Workbook will be turned in to the session organizers at the end of the session• In addition to the materials on the flip charts, we will incorporate the

workbook information into:• A publication for the ASAP Strategic Alliance Magazine

• Materials for the ASAP Member Resource Library

Group Assignments – Video A (part 1)

• List the major issues with the meeting from a conflict standpoint

1)

2)

3)

4)

5)

6)

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• For each issue, list the best way(s) to manage or prevent

1)

2)

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5)

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10)

Managing Conflict

• What trigger points do you use to determine when conflict (or lack of conflict) has become unproductive

1)

2)

3)

4)

5)

6)

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9)

10)

• When do you intervene in conflict and when do you let it go

1)

2)

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• What are the ways that you can intervene

1)

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Value Producing Conflict

• List those inflection points in biopharmaceutical alliances that ensuring the right level of conflict will result in the greatest return

1)

2)

3)

4)

5)

6)

7)

8)

9)

10)

• Does this list differs between small and large biopharma – in what situations

1)

2)

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• How does this list differ when working with academia, non-profits, and other industry participants

1)

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What’s in your tool box (1)Briefly list tools and techniques that you can use for each of the following items:

• Too much conflict1)

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• Not enough conflict1)

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What’s in your tool box (2)Briefly list tools and techniques that you can use for each of the following items:

• When conflict adds the most value1)

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• Key inflection points to manage1)

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What’s in your tool box (3)Briefly list any other thoughts you have here:

• Other1)

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Any Other Ideas that should be included in an article: