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Despite the boom in alliance formation over the past decade, at least half reportedly failed to meet their participants' objectives. In this article, I offer some perspectives on how to improve the probability of success for a specific kind of alliance: research collaborations between small and large companies.Differing from traditional contract research, where a third-party company or university is paid to conduct research and furnish the results and intellectual property rights to the payer, a true collaboration is a partnership in which both companies pool their resources and technology in a cooperative manner in order to achieve certain strategic objectives of both companies.Furthermore, while I shall address the concerns of the large company, I write from the perspective of a small company. Symyx Technologies, Inc. is a 200-plus person public company based in Santa Clara, California. A leader in combinatorial materials sciences, Symyx has pioneered the application of high-throughput experimental techniques to materials discovery.Despite its size, Symyx has a strong track record of collaborations with more than 20 leading chemical, electronic materials and life science companies. For example, in the chemical industry, Symyx's current partners include such leaders as ExxonMobil, The Dow Chemical Company, BP, Celanese, and Univation.Drivers of CollaborationThe starting point for a research collaboration should be to clearly understand its drivers. The effort required to put a collaboration agreement in place is typically considerable and requires championship and risk-taking from both sides. Because many large companies tend to be conservative and might be characterized as "risk-averse," a champion must emerge to drive the process if there is to be any hope for a successful and expedient conclusion to the negotiation phase of the contract. Also, senior management must be convinced that the risk and effort will be worth the reward.A typical driver for research collaboration is a strategic business need that has been translated to a priority R&D need, a need that can best be realized by accessing the unique and complementary capabilities of another party. In the case of Symyx, for example, the core competencies offered center on the significant acceleration of materials discovery and optimization at lower unit cost. This capability, when combined with the large company's ability to develop, scale-up and commercialize new or improved processes and products, results in bringing advantaged materials to the market faster and more cheaply.Without a strategic, business-driven need identified early in the process, the collaboration is unlikely to be successful. The overarching driver for a collaboration boils down to value creation, for both companies. As opposed to fee-for-service contract research, the value-sharing element in a collaboration partnership is crucial for a win-win relationship. Because there is both a technology and a business element in the agreement, both functions must be aligned and work together to put it in place.A collaboration should never be duplicative but always additive to each company's needs and capabilities.Although this usually means accessing a capability one doesn't possess in-house, it could also offer the large company an opportunity to increase R&D efficiency. Supplementing internal R&D with third-party research may allow for more cost-efficient management of staffing and budgets through the ups and downs of business cycles. One note of caution, however: setting up a duplicative and competitive program at either company is strongly discouraged as it will likely destroy both value and morale.But whatever the driver, the significant research costs and the attendant risks demand that the collaboration involve a strategic project. Symyx's best relationships and outcomes are always with companies that have well-defined and aligned business and R&D strategies and priorities. …
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