Managing Alliances with the Balanced Scorecard

Description

Fully half of all joint ventures are a failure. That's worrying, given that partnerships and alliances are central to many companies' business models. The reasons are not mysterious: the partners have divergent strategies; the goals set for the venture are ambiguous; partnership agreements quickly become obsolete; and middle managers don't have clear strategic principles to work from. The problems can be remedied if companies switch their focus from operations and contractual obligations to strategy and commitment. This article describes how Solvay Pharmaceuticals and biopharmaceutical services firm Quintiles used the balanced scorecard and strategy maps to help them define strategic goals, create a governance structure, develop metrics, and align the two groups. The new approach yielded impressive results: The alliance reduced cycle time for clinical studies by approximately 40%, an achievement that brings new products to market much faster and leads to tremendous cost reductions.

Keywords

Balanced scorecard Joint ventures Strategic alliances Strategy maps