When industry partnerships flop: Take lessons learned and keep moving forward
Excerpted from the January 2023 issue of University-Industry Engagement Advisor. UIDP members can view the entire issue here.
Every industry engagement manager has stories about “the one that got away” — partnerships that never progressed to the desired level, or projects that didn’t pan out. Despite these experiences, it seems that few have specific tools or formal processes for examining what went wrong, and most debriefings are internal rather than external. And yet, their combined “stories” provide a fascinating picture of how they respond to such disappointments.
“Projects are all so different,” notes Geanie Umberger, PhD, MSPH, RPh, Penn State’s associate vice president for research and director of its Office of Industrial Partnerships. “They’ve walked away, and we’ve walked away. But universities don’t really see where they do a formal ‘Let’s go talk to them and find out why it failed.’ Universities are eternal optimists; they always hope it will turn around and be OK.”
Kent Glasscock, president of the Kansas State University Institute for Commercialization, agrees. Glasscock notes that KSU has created a database of over 300 companies that have in the last 10 years had some kind of relationship with the university — largely transactional in nature — which it continually tracks. Then, there are eight to 10 “truly strategic” corporate relationships, which they also track.
“As we do those constructs,” he continues, “we either find or don’t find certain appropriate matches and desired interest, whether we have the capabilities, and whether or not there is a cultural match — the values, the decision-making processes. What we have found is that very few companies sort of get beyond that desired stage — for whatever reason.”
There is not a formal response to a failed partnership effort at the University of Utah, but there are both internal and external engagement after the fact, adds Keith Marmer, chief innovation and economic engagement officer. “It’s two sides of the same coin — whether you call it debriefing or negotiation,” he says. “You try to understand why a partner wouldn’t want to proceed with something they’re enthusiastic about. If communications break down, we want to see if there’s a way that we could support it the next time. Was it the wrong partner? Were the partner’s expectations not well managed? If so, by whom?”
Different events, different reasons
One of the key variations in why collaborations falter, says Joseph B. Havrilla, associate vice chancellor for innovation and entrepreneurship in the University of Pittsburgh’s Office of Industry and Economic Partnerships, is the type of collaborative activity you’re talking about. He delineates them as follows:
- The collaboration doesn’t make it through contracting for any one of a number of reasons:
— Parties can’t align on a Statement of Work, including a budget, that meets the needs of both parties.
— Parties can’t agree on certain contracting terms, with IP rights and indemnification being the usual culprits.
— Contracting takes too long and negotiations break down.
— Strategic priority changes at the industry partner.
- The collaboration doesn’t deliver the expected results.
“Given that the nature of a sponsored research collaboration is research focused on advancing the science, validating hypothesis, and/or developing data, they generally deliver against the objectives in the agreed SOW (Statement of Work),” he says. “However, the results aren’t always what was hoped for or expected, but that is the nature of scientific research. Generally, both parties understand what did or did not happen, so here again no debrief or extensive follow-up is required.”
- The collaboration had performance problems, contract compliance issues, or conflicts during execution.
Potential challenges are:
— Publication without following the process outlined in the contract, and/or without the required reviews or approvals.
— Disagreement regarding publication (what/when), or authorship.
— Disagreement regarding IP inventorship arising from the collaboration.
— The research path or interim results indicate a potential need for amending the SOW, and agreement can’t be reached.
— Budget/expenses estimated at the beginning, and agreed upon, change for any one of a number of reasons.
Adjustments to problem areas
The responses to these issues, he notes, vary accordingly. Take negotiations, for example. “Because these breakdowns occur during ongoing negotiations, both sides are aware of the issues and therefore no debrief with the partner is needed,” he says. “We do, however, debrief internally, and as a result we are working on improvements that will mitigate some of these issues going forward, e.g., more IP flexibility, improved contracting processes, and having a defined real-time escalation path so that contracting issues can be resolved more quickly.”
When expected results are not delivered, says Havrilla, there is no formal debriefing, “But we stay engaged with the company and the PI throughout the process. Often, we have an SOW that has multiple steps or themes and never progresses to the second, third, or fourth step because the scientific [steps] did not deliver the results we were looking for. Now, if you hit a ‘black box’ [and determine that] the company or alliance management function at the university were not heavily engaged there might be a debrief, though we try to avoid it. But at a minimum, in non-strategic partnerships we have some point of check-in.”
As for performance problems, “our approach at Pitt to managing these types of issues is to have an Alliance Manager from our industry partner group stay in touch with the partner and the Pitt research team throughout the collaboration, to facilitate and hopefully prevent issues,” says Havrilla. “We do this fairly well with our strategic, large-scale partners. Regardless, we aren’t always able to prevent performance failures, in which case we go into fence mending, relationship rebuilding mode.”
And what does that look like? “It depends a little bit on the severity of the breakdown; it can go from a pretty extreme, pretty significant interpersonal breakdown to [one that is] less extreme, to [one that is] more process related, communication related,” he says. “Usually where there’s a communication breakdown, one side gets kind of frustrated and disappointed, and it leads to results not being achieved.”
In such cases, he continues, “you try to focus on whatever relationships you had that had not been fractured and try to explain what we’ll do in the future; ‘Can we find ways to work together?’ In all cases, the key is to find opportunities based on what the university is interested in doing, based on what the company you had a break with is interested in doing, and finding a new opportunity to fix it. You need an opportunity as an entrée. It could be other contacts at the company you leveraged through another contract with the philanthropic group or an investigator to begin the fence-mending process.”
There’s a similar approach, he shares, when a desired strategic relationship is not accepted. “Again, I think the best way to do it is through identifying opportunities to work together,” says Havrilla. “’We have this success, we have these other opportunities, is there a way we can engage on these?’ You build one block at a time, one investigator at a time.”
He adds that “you continue to revisit, but on a sensitive kind of basis. You do not bring it up in every conversation.”
JoonHyung Cho, director of corporate relations and business development at the University of Virginia, agrees that different circumstances call for different approaches. “It’s actually two big questions — project failure is not the same as something in the transactional state,” he observes. “Transactional relationships may be on the path [to strategic], but project failure happens more often than what we perceive, and like in any relationship, there are signs; we know in three or six months that it’s not working. Both sides — the PI and the external partner — understand what’s not working, or why they’re behind, and they try to make it work. If that fails, sometimes it’s ‘We tried it,’ and you walk away.”
He says he does do debriefings, either with the faculty member or the company. “If they are willing to do a debriefing with me, there is a chance to work in the future,” he says.
If long-term relationship fails to blossom, he continues, “that’s more of an internal disappointment; the partner is not being strategic, they may be content” with a less fulsome relationship. If that’s the case, he says, “there’s only so much you can do. Maybe you’re not the partner they’re looking for, and at some point you have to acknowledge that. If it’s something we can change, that’s different. It all comes down to managing expectations.”
‘Try to understand’
When things don’t work out, industry engagement leaders agree, whether it’s done with a formal protocol or not it’s important to know why. “If there’s a ‘bad’ transaction, we try to understand what happened,” says Glasscock. “Sometimes attending to corporate relationships is not something that research faculty naturally gravitate to. Or changes develop in company strategy, or faculty on our part changes and the relationship just needs time to recover; that can be months, years, or never. But we keep checking that list to see how things are going.”
Based on the tracking KSU does of the companies in their list, they can see that sometimes the researchers change, “and sometimes we attract a researcher that has a relationship with one of the companies on the list and can re-engage in that fashion,” says Glasscock. “Sometimes the transactions are getting consistent enough that we may go for visit. We’ll send a little delegation to the company if they will meet with us. Everything is ‘feel your way along’ until you identify whether or not you can get past transactional, or if it’s time to revisit.”
There have been a limited number of occasions, he continues, where the transactional relationship was not optimal, and “perhaps we didn’t perform according to the company’s expectations, or the company’s expectations were not clearly defined enough for us and it did not work out,” says Glasscock.
Of course, he continues, sometimes things happen that are beyond your control — and you’ve got to learn how to react accordingly. “One of the things we’ve found is whenever there’s a CEO change, then you can just plan on a year of the company’s reassessing its direction and potentially taking new directions,” he says. “When that happens, we mentally go, ‘Okay, the relationship may be temporarily in ‘time-out’ until the company makes whatever adjustments it needs to in strategy.’” After that year, however, Glasscock notes that there “could be an improvement” and efforts should be made to rekindle any stalled projects or negotiations.
“You’ve got to learn to ask the right questions and, based on [the answers], continue to ask questions,” says Marmer. If a company is reluctant to advance beyond the transactional stage, he notes, “I’m not sure there’s a ‘blanket’ answer, but in my experience dealing with those situations you really just ask the question, ‘Is this how you operate normally? Is this because you don’t have the experience?’ Occasionally there is discomfort dealing at a higher level, or the individual you’ve been working with just does not have the budget or the authority to make those decisions.”
“What I generally do is an internal debrief with the key players who were involved on my side and ask them why they think this happened,” says Umberger. “It could be a dean, or an associate vice president of research. A portion of the time [it’s because] they had some type of internal change — your champion disappeared, and you were not embedded. Or it was such a top-down initiative they were not getting staffing in place, and they did not do what they needed to do to move forward. Sometimes the university did make it fail, but it’s usually a combination.”
Real world ups and downs
The best practices for turning around collaboration disappointments will work — sometimes. For example, in two recent cases in which the research focus needed to change, “one never could quite get turned around; another did,” says Umberger. “And it really took senior level people to do it, and it took some time. Everyone on both sides had to be committed to fixing it — that’s the key. If you have the right person you can talk to — the relationship holder — they will be candid to make sure you get the accurate picture of what’s really happening.”
In the case that got turned around effectively, “the deliveries and direction of research were not meeting goal enough, so the company understood why there were delays. We had to have conversations with faculty to make sure we got things straightened out. It was pretty tense for a while; there were a multitude of things required to get people to understand what they needed to do — for example, that they should not be on autopilot, but [instead] constantly in touch with their counterpart.”
Once such efforts to change are made, she adds, “take the temperature; is it getting back on track? That’s what it comes down to.”
When she was at Purdue, Umberger recalls, the team was trying to get a company to interact with several facilities in a “very spectacular” relationship. “In that situation there was an internal corporate power play and [the winner] turned it into a purely transactional type of thing, which was not within the mission of the university; we were not a job shop,” she explains. “We walked on that one. It hurt; [we had put in] a lot of time and effort. But again, we had other things to put in place.”
“There was one situation where there was not a happy ending, but it did not impact the overall relationship with the company, although that faculty will probably never want to work with that company again,” Cho shares.
It came down to a change of ‘lead’ at the company after a sponsored research deal had been inked, he recalls. “It happened three times in one year; it really disrupted continuation. Peoples’ understanding of the project was not the same, and when it came to the third person, nine months in they had no idea why the company was paying this money out.”
The sponsored research project, designed to take two years, involved one postdoc and one student, says Cho. “The lack of communication was challenging, and it really disrupted their research. We went back and made sure to revise the milestones, but it was very difficult to [get support from] someone who was not interested. I was meeting with my person at the company on a monthly basis to share my frustration and to find a way to make it work, but after 18 months we mutually agreed it was going to be difficult to make it work, so let’s close it,” he relates.
But as he said earlier, this shutdown did not impact his relationship with the company. “It allowed us to identify what could go wrong. We went on in the future to do other collaborations with this company,” he says.
“It’s not only about the science, the research, or the engineering; sometimes operational issues do not work,” Cho continues. “We want to know and know now; that’s better than 10 projects later. That time it really allowed us to look back [and figure out] how to make sure this does not happen again.” In this case, he explains, going forward when a project lead changes, the company makes sure the external collaboration piece is discussed early on in that person’s onboarding process.
“The key person at the company felt disappointed, but also appreciated that the handoff was not clear,” he adds, noting that that understanding “allowed us to be a stronger partner.”
A situation at KSU where the parties had to “settle out” was nobody’s fault, says Glasscock, “but the CEO and I had cultivated a strong enough relationship from the outset that it allowed for continued conversations on subsequent projects to go forward with,” he states. “A lot of that is the strength of the relationship built upfront. A lot of that is don’t always focus on the transaction; you’ve got to be able to build a rapport with somebody such that they do not feel you are just trying to squeeze that next deal out of them. There’s even a social aspect; get together so you can trust each other. Then, if something goes wrong you can lean on that trust.”
Marmer agrees. “In my experience it’s largely based on the relationship you had before something went sideways, and how you managed it when it did become a challenge,” he says. “If the relationship between individuals is still there, if there’s another opportunity . . . it should be open to us. It should be independent of a past experience.”
Discovery process can avert bad outcomes
Of course, in an ideal world these disappointments would never happen. While some are inevitable, Glasscock asserts that an effective discovery process can minimize them.
“What we want to do is to the best of our ability recognize early on whether or not there’s a match,” he says. “There have been occasions where we believed there should be a more strategic match, but the company was not ready, or they could not see the value of a long-term partnership with us; that’s natural. Also, it’s possible we had some of the capabilities they needed, but not all of them. Then, part of that conversation becomes, ‘are you going to get these other capabilities?’ That becomes a question for department deans and associate deans for research in the colleges.”
Situations in which capabilities are lacking “are very hard to overcome,” he continues. “Sometimes, however, we know of other universities that have these capabilities. These are sophisticated companies; they already know where the other capabilities reside. We want [poorly matched] strategic relationships to flunk out early. Then we do transactional [work] to the very best of our abilities and the company’s abilities.”
“There are always signs — sometimes good, sometimes bad, and it’s important to see that,” adds Cho. “Sometimes there are personality differences — more often than I’d like. Or a faculty member changes. It’s not unusual [for that to happen] at a company. You draft up a proposal into funded research, and then there’s a new project lead. All of a sudden, the faculty member feels lost; there’s no mutual interest. That’s the kind of thing you watch very carefully as an alliance manager. They communicate with other folks in the company, and they know and care about the relationship.”
Havrilla offers another strategy for avoiding major disappointment — and that’s to take it slow at first. “We have a partner now where we both have pretty big hopes in terms of a broad strategic alliance, but we both realize that probably the best approach is, ‘Let’s start a pilot project that we’re both interested in, to make sure we can work together, and we can match beyond the science,” he comments.
For Glasscock, it often comes down to faculty. “We have probably 20 or 25 company relationships that might materialize into more strategic ones over time, and we have a relationship lead for each of those companies,” he says. “The balance of companies might be coming through the colleges, the Office of the Vice President, or it might be the university foundation or economic development engagement — so there’s no single portal of engagement. What we see in the end is that these things rest on the talent and capabilities of faculty and the education enterprise of the university; so much is driven at the faculty level.
“No university in the world has a firm fix on all relationships,” he adds. “We do the best we can and try with our list to follow transactions and engage, but faculty are individuals, with individual areas of expertise and interest, so ultimately everything we do in terms of [relationships with] companies rests on research faculty who want to engage the private sector.”
Accordingly, he concludes, “When the time comes to revisit [a relationship], we have to stay very close to faculty. Only their interest can be the catalyst.”
Contact Cho at 434-422-0731 or joonhyung.cho@virginia.edu; Glasscock at 785-532-3900 or kentglas@k-state.edu; Havrilla at 412-383-3773 or joseph.havrilla@pitt.edu; Marmer at 801-587-2347 or Keith.Marmer@utah.edu; and Umberger at 814-867-0137 or gumberger@psu.edu.