Here is an excerpt from an article written by David Thompson, Gary Butkus, Alan Colquitt and John Boudreaux for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.
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Oysters and alliances have something in common: a little irritation can produce a thing of beauty. When partners in an alliance come into conflict, it can be just what is needed to produce a technically and commercially successful product.
Eli Lilly and Company measures the health of its alliances with a “Voice of the Alliance Survey.” Members from each partner organization rate the alliance in areas related to strategic fit, operational fit, and cultural fit. Sample questions include: “Knowledge and information from our partner is freely shared with us” and “Our partner openly listens to our ideas and opinions.” Lilly recently analyzed fourteen years of data to understand the relationship between the health of these alliances (as evidenced by the ratings on the survey) and the technical and commercial success of the products on which they worked.
The results were fascinating.
When the Lilly employees in the alliance were irritated with the partner, there was an increased probability of technical and commercial success. It wasn’t that they didn’t like their partners; they typically held them in high regard. What distinguished successful from unsuccessful alliances was more of a “productive” irritation — creative tension between differing ideas about how to develop alliance products – reflected in disagreements about the strategy and tactics of how best to develop a particular molecule. Even more interesting, there was no relationship between how the partner viewed the alliance and future success. What mattered in forecasting success was how Lilly people viewed the alliance.
Here’s an example. Lilly and its alliance partners might differ in how to design a clinical trial. These design differences have significant resource implications for both organizations. Tensions are often high as experts from both sides argue the merits of each other’s ideas. Professional opinions clash and irritation results as both parties struggle to make the best decision. It is this kind of irritation that forecasts later technical success, according to fourteen years of survey data.
Why does this happen? Enrique Conterno, Senior Vice President and President, Lilly Diabetes, sums it up well. “Nothing great is achieved without some conflict. Conflict sharpens the senses; it invites full engagement in solving important problems. However, you must create more light than heat when you engage in conflict. Heat degrades the substrate of innovation, while light catalyzes it.”
This idea that disagreement and conflict between groups can be productive is not new. We see similar findings in research looking at individual work teams. For example, the research of Amy Edmondson and Alicia Tucker in hospital emergency rooms shows that the failure to speak up can lead to medical mistakes with disastrous consequences. Similar failures among cockpit crews can lead to airline crashes. Finally, there are countless examples of business misconduct among corporations where employees were aware of misconduct but they simply did not feel comfortable speaking up and reporting it. Creating an environment where team members feel “psychologically safe” to speak up and share their point of view can dramatically improve the effectiveness of these kinds of teams. Lilly’s research shows these same effects can happen between members of alliance innovation teams.
The managers in charge of these alliances caution us, however, that a positive relationship between irritation and success does not mean that you should be looking for opportunities to create just any conflict. The beneficial irritation is respectful conflict on the most pivotal issues to the project.
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Particularly with partners, we often try to avoid conflict to avoid irritation. But too little irritation risks failing to create the pearls of wisdom that good conflict can produce. Leaders should look beyond irritation to the benefits of the right kind of conflict, even seeking to create good conflict at the most pivotal value and risk inflection points. An oyster takes up to 24 months to culture a grain of sand into a pearl; but with careful alliance structures, active listening, and other techniques suggested above, leaders can much more quickly use alliance conflict as a source of significant value.
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Here is a direct link to the complete article.
David Thompson, CA-AM, is the Chief Alliance Officer at Eli Lilly and Company in Indianapolis, IN. David is an internationally recognized alliance architect and alliance builder, specializing in making alliances productive and profitable with a track record of: designing and operating effective and efficient alliances; successfully managing and negotiating alliance conflict; and developing high performing alliance management teams. David has published over 20 articles on the topic of alliance management and has been sought out by Fortune 100 companies outside of the pharma industry to consult on their alliance management programs.
Gary Butkus, RPh, CA-AM, is Director of Alliance Management at Eli Lilly and Company. He spearheaded the recent review of Lilly’s Voice of the Alliance survey data. Gary has leveraged his more than 20 years of pharmaceutical experience, his certifications in Six Sigma, Healthcare Compliance, and Corporate Citizenship, and his role on the Butler University Board of Trustees into being a recognized leader in the value of professional development and corporate diversity.
Alan Colquitt, PhD, is the Director of Global Assessment, Organization Effectiveness and Workforce Research at Eli Lilly and Company. Alan is the architect of Lilly’s employee survey strategy including Lilly’s employment lifecycle surveys (recruiting, onboarding, exit), customer satisfaction surveys, 360 feedback surveys, team surveys and alliance/collaboration surveys. His group also conducts workforce research projects in the areas of attraction, hiring, on-boarding/socialization, engagement, performance, retention, innovation and customer satisfaction.
John Boudreau is professor and research director at USC’s Marshall School of Business and Center for Effective Organizations, and is the author of the book Lead the Work, with Ravin Jesuthasan and David Creelman, and Global Trends in Human Resource Management, with Edward E. Lawler III.