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Thinking about Life Sciences

http://blog.aesisgroup.com

Sunday, July 08, 2007

Chief Partnership Officer: An Idea Whose Time Has Come?

In light of today’s hip resurfacing posting and its implications for corporate partnerships as well as last year’s
posting on the importance of partnerships more generally, I wanted to share with you another idea I’ve been
mulling over – namely the concept of a Chief Partnership Officer (also referred to as a Chief Alliance
Officer).
Partnerships are Important
Clearly, the concept of corporate partnerships is not a new one. As outlined in “Intellectual Property: Does
it Matter,” a significant proportion of Microsoft’s core competency and hence corporate valuation resides
in its ability to form powerful partnerships. Quoting from that posting:
Particularly in the early days of its development, Microsoft’s major strength was the ability to partner with
much larger companies (such as IBM). It was through these intelligent partnerships that Microsoft was able to
attain its immensely strong market position rather than [from] any specific patent protection rights.
As everyone knows, Microsoft partners with all the major personal computer OEMs, thus ensuring that
Windows ends up residing on virtually every desktop and laptop in the world. No one can say that
partnering doesn’t make for a formidable business model. The same applies to the life sciences industry
written about in more detail in: “A Time to Make Friends: More Partnerships in Biotech, Med Tech.”
Quoting from that posting as well:
The future of medical technology will be dominated less by huge behemoths taking a single idea linearly from
concept to market but rather by fluid partnerships that take technologies at different stages of development and
bring them together. In the 1960s and 1970s, research was king (hence the prominence of Merck as a leading
pharmaceutical firm). In the 1980s and 1990s, marketing became increasingly ascendant (hence Pfizer was
able to take over the title for the biggest pharmaceutical). As we move further along in the 21st century, the
ability to partner will be a key advantage.
The Role of a Chief Partnership Officer (CPO)
In a typical corporation, who is responsible for sourcing, initiating, implementing, monitoring and
potentially terminating partnerships?
For small companies and certainly for major partnerships at larger firms, the key point person is often the
CEO. For Microsoft and its catalytic epoch-setting agreement with IBM, Bill Gates was the one; the
history of that agreement is enormously telling:
In 1980, IBM first approached Bill Gates and Microsoft, to discuss the state of home computers and
Microsoft products. Gates gave IBM a few ideas on what would make a great home computer, among them to
have Basic written into the ROM chip. As for an operating system for the new computers, since Microsoft had
never written an operating system before, Gates had suggested that IBM investigate an OS called CP/M
(Control Program for Microcomputers), written by Gary Kildall of Digital Research. Kindall had his Ph.D.
in computers and had written the most successful operating system of the time, selling over 600,000 copies of
CP/M, [making his OS the] standard at that time. IBM tried to contact Kildall for a meeting, executives
met with Mrs. Kildall who refused to sign a non-disclosure agreement. IBM soon returned to Bill Gates and

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gave Microsoft the contract to write the new operating system, one that would eventually wipe Kildall's CP/M
out of common use.
No doubt, Bill Gates was acting as a Chief Partnership Officer; Mrs. Kildall was not. … And Bill(ions) of
dollars later the outcome is self-evident.
However, the CEO is tasked with myriad other responsibilities and in many organization charts, the job of
fostering corporate partnerships falls to “Business Development.” Unfortunately, the business
development role is often considered an off-shoot or after-thought of sales. The incentives, the
time-frames, the skill-sets, etc. of a partnership executive (such as the skills Bill Gates so amply
demonstrated in the story above) are quite different from those of a master salesperson. In rarer cases, the
partnership position falls to a corporate communications or public relations figure; unfortunately, in this
case, the lack of significant business decision-making authority renders such a position notably impotent
for the role.
Any Examples Out There Already?
Not many and certainly not many in the life sciences field.
Steve & Barry's – the casual apparel chain – has a Chief Partnership Officer position held by
Howard Schacter. One of his recent projects was a partnership agreement with Universal
Pictures in which a “marketing campaign built around [the studio’s] upcoming release of You, Me
and Dupree [involved an] in-store sweepstakes that will send the grand-prize winner on a trip to
Hollywood.” As Schachter said: "We're canvassing the world of entertainment...filtering to
[partners] that make the most brand relevance … it's a very important part of our brand strategy
…"
Sun Microsystems during its heyday in the 1990’s was also a brilliant initiator and executor of
partnerships. While it did not have a formal CPO role – indeed the partnership culture was
driven mostly from the CEO level - Sun set the standard for partnerships during that era.
Ironically, the one Achilles Heel of a strategy relying on partnerships is, by definition, its
dependency on others. Indeed, when the dot-com boom imploded, Sun was hit particularly hard;
its partnerships were great but its many partners were no longer so great.
What Would a CPO Role be Like?
The closest analogy to a proposed Chief Partnership Officer position would be that of the U.S. Secretary
of State. For the most critical relationships it would be President Busy, for example, who would need to
meet with Vladimir Putin. But for nearly all relations with other nations it is the Department of State and
the Secretary of State (SoS) who lead that work.
The CPO would be the SoS for companies. (I know: bad pun)
Like the Secretary of State, the CPO would be a very senior level position. In fact, as codified by
the U.S. Constitution and federal law, the Secretary of State is the highest ranking cabinet
member in the line of presidential succession. AAs so many partnerships have a global flair, the
CPO position would also require an international perspective and experience. The functions of
the Department of State may appear to some surprisingly “commercial”. According to the DoS
website, these functions are:
Promoting peace and stability in regions of vital interest;
Creating jobs at home by opening markets abroad;
Helping developing nations establish stable economic environments that provide investment
and export opportunities;
Bringing nations together to address global problems such as cross-border pollution, the
spread of communicable diseases, terrorism, nuclear smuggling, and humanitarian crises.
While entertaining guests at fancy ambassadorial balls may be a certain perk of the job, that is by
no means what it is all about.

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For a corporate Chief Partnership Officer the key functions would be to:
Source, initiate, develop, monitor as well as potentially terminate key business partnerships;
Work with sales and business development to manage critical client relationships;
In combination with the Chief Marketing Officer, the CPO would contribute to building and
leveraging an organization's brand awareness and identity;
Develop critical networking relationships (i.e., with industry groups, government and other
third-party entities) that promote business development and advance the community mission.
Does your organization have a Chief Partnership Officer?

Ogan Gurel, MD MPhil

gurel@aesisgroup.com
http://blog.aesisgroup.com/

Convergent Medical Technology Convergent Medical Technologies Chief Partnership Officer Partnerships CPO Aesis Research Group Ogan Gurel MD

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