Effective governance models in CRO-sponsor partnerships: Lessons from the Bayer-Parexel collaboration

In 2024, the Bayer Group introduced a new operating model worldwide, aiming to sustainably improve performance by reducing hierarchies, eliminating bureaucracy, and accelerating decision-making processes. Longtime partner Parexel joined Bayer on the journey toward implementing the Dynamic Shared Ownership (DSO) model. Achieving Bayer’s goals required significant adaptation of the partnership governance structure to align with DSO and the willingness of both organizations to embrace a change in mindset. The partnership was redesigned according to these core principles:

• Enable study teams in small functional units to make most decisions, with oversight and support at the alliance level.
• Establish more nimble work cycles focused on achieving a short-term objective, with continuous information-sharing and check-ins as needed.
• Focus on mission objectives and customer centricity at all times.
• Link KPIs to value creation and shared goals, balancing short- and long-term metrics.

One year into this initiative, Bayer and Parexel alliance leaders share lessons learned and best practices.

When the Bayer Group embarked on a dramatic worldwide transformation of its operating model in early 2024, Bayer’s pharma organization was wholly on board—recognizing that this new way of working would help them achieve their own goals. The goal of the overall corporation was to improve performance by speeding up decision-making processes, accelerating cycle times, and becoming more customer centric. At Bayer and Parexel, we knew that achieving this would involve overhauling and decentralizing internal processes, reducing hierarchies, introducing a new level of accountability, and thus, an enormous change in mindset. And it would require the right partnership to make the journey together.

Several years before, Bayer and Parexel had launched what we call the “COSMOS model,” characterized by strong cultural alignment and clear delineation of responsibilities. In this original partnership model, we followed a lean, risk-based approach, whereby Parexel was largely responsible for performing project work, focusing on delivery, ownership, and accountability, with Bayer providing oversight. At the heart of this model is open communication and transparent decision-making with a clear rationale.

The Dynamic Shared Ownership model

While our collaboration was successful in meeting its goals, we recognized that the partnership could benefit by reducing the hierarchical governance typical of most large organizations. In this structure, information moves slowly up through the hierarchy for approval and then back down again for implementation, which is conducive neither to speed nor timely decision-making. The new Dynamic Shared Ownership (DSO) model aimed to deconstruct the bureaucracy.

Yet this new model is a complete contrast to the way most partnerships have been managed for decades. We recognized that we would need to realign our partnership according to these changes, and that we would be learning alongside each other. Achieving this would require significant adaptation of our governance structure to align with DSO, as well as, the willingness of both organizations to embrace change and experiment with different paradigms. At Parexel, we would need to empower our own employees and shift behaviors and expectations to allow DSO principles to take hold in our joint teams.

Key principles and practical application

At the heart of Bayer’s new operating model is a flatter organization that moves decision-making to the ground level where the work is being done, following these key principles and team dynamics:

• A mission-first focus on critical outcomes, with teams clearly understanding and aligned on expectations, including deliverable due dates.
• Empowered, collaborative teams willing to share knowledge and resources to achieve their goals, with the autonomy and accountability to make decisions and act.
• Nimble 90-day work cycles focused on achieving a short-term objective, with continuous learning and improvement to allow steady progress.
• A customer-centric paradigm to anticipate customer needs and createvalue, supported by a fluid flow of capabilities and resources.
• An environment that respects differences, embraces inclusion, and encourages people to show up as their best selves.

How does this work in practical application? The following guidelines enabled us to reimagine our partnership along DSO principles.

A clear communication framework

Communication is, of course, paramount. Our communication frameworks are built on continuous information-sharing, with joint study teams at the center. The study teams drive decision-making based on their work cycles and mission outcomes. At the alliance level, we support the teams with monthly partnership meetings to provide an overarching view across all projects and programs. We have moved away from the standard meeting structure, replacing it with regular check-ins as needed, with the agenda driven by the teams closest to the work. These sessions include partnership strategy planning, attended by subject-matter experts or functional leads who can support the decision-making process. This way, we ensure that team decisions are shared across the partnership; we can adapt the partnership accordingly—and do it quickly.

Communication frameworks

Another key element of this approach is a collaborative knowledge repository, available to both companies, that ensures that the lessons learned are not only captured but easily accessible. Integration of real-time feedback allows for immediate application of lessons learned and updates to the responsibility matrix or RACI. Incentivized-knowledge sharing motivates all stakeholders to actively contribute their lessons learned by publishing contribution metrics from individual functional groups.

Analysis by multiple perspectives leverages diverse experience and viewpoints, leading to a deeper understanding of challenges and more innovative solutions compared to traditional single-organization approaches. Adaptive implementation strategies ensure that lessons learned are applied in ways that are most relevant to current situations. This flexibility allows the partnership to remain responsive to changing conditions.

Process alignment
We were already aligned with DSO in that we had employed an easy-to-use RACI, unlike the lengthy partnership manuals often in place in other pharma companies. A RACI works well in the DSO approach, as it is a simple and agile tool that defines functional tasks and ownership that can be quickly updated and disseminated.

Process alignment incorporates regular feedback from subject-matter experts and clear process governance.

Technology alignment
Equally, we had already adapted to agile ways of working with well-integrated systems based on standards commonly defined by Bayer and Parexel, largely based on Parexel technology. We are using the Parexel environment with integrations built in where necessary. For example, the existing CTMS enables transparent partner activity tracking, and integrated eTMFs streamline document-sharing and version control. Enhanced EDC systems facilitate
real-time data-sharing.

Metrics
Our KPIs roll up from the study level to the portfolio and partnership level. These KPIs are based on action plans with traffic lights and a balanced scorecard to sum them up. We improved by linking KPIs to value creation, including risk-sharing metrics. KPIs are aligned with cross-functional shared goals and measure both individual and collective performance.

Critically, KPIs balance short- and long-term metrics and both quantitative and qualitative metrics.

Here is a good example of how this might transpire in accelerating the clinical trial process. We track the number of patients enrolled per month and see whether we can get faster over time. The qualitative metric could be the investigator satisfaction score, while the quantitative score could be the percentage of trials meeting certain milestones. The KPIs are based on the current activity and evaluated via a balanced scorecard, with the more important metrics given more weight. Immediate feedback loops allow us to make adjustments when the metrics are irrelevant or out of scope. We might add a new KPI, for example, if the situation warrants it; everything is fit for purpose.

Escalation pathways

We are no longer organized as a traditional hierarchy of individuals, with upward escalation in the governance model. Instead, we are evolving into a thriving network of teams with value creation at the center.

• Small functional units have decision-making power.
• Empowered cross-functional teams of subject- matter experts supply expertise and provide support where needed.
• The partnership leadership team articulates the vision, coaching teams and enabling resource flow.

This approach involves both advantages and disadvantages, however. The upside is that decision-making processes are accelerated, with the people closest to the problem applying their expertise and taking ownership. The downside is potential inconsistency because teams come up with different solutions to the same problem.

This is where the alliance management team comes in: with clear decision-making frameworks, a focus on the broader strategic implications, and constant updating of the teams to avoid tunnel vision.

Change management

Clearly, each individual needs to change their familiar ways of working, which requires overall cultural change, evaluation of skill gaps, and training. We have applied general change- management practices to accomplish this shift.

One essential aspect of change management is to set realistic expectations. We are well aware that many people who have spent their careers in the pharma industry will need to adjust to a new mindset and way of working. Here, we reframe the concept of change, understanding that everyone will go through the journey at their own pace. The expectation is not overnight transformation, but effort, willingness, and progress. Change is a process, not an event.

Patience, persistence, and flexibility are key to successfully implementing and maintaining the DSO model across the team.

And it’s important to note that another key element in change management is an expectation of respect for different opinions and points of view. Sometimes the least experienced person in the room has the best ideas—and that is not always easy for seasoned managers to remember.

Leadership responsibilities

Managers within the organization need to be vocal in their support of the new model and demonstrate leadership. They need to provide the right frameworks and work with people to put them in a position in which they are confident about making decisions. They need to interconnect at different levels of the partnership to make sure everyone sees the big picture. Everyone should have a good understanding of the potential impact of their decision on the overall development plan.

For example, in our industry, we are all accustomed to achieving perfection in everything we do. But is perfection demanded in every area? While we would never ask anyone to compromise their professionalism, perhaps we can prioritize high-value activities and lower expectations for others. Can we reorganize such that more people are assigned to manage tasks that are the most meaningful to our stakeholders and fewer on lower-level activities? Can we eliminate steps and due diligence in areas with lower risk profiles? Can we utilize technology to execute some tasks? Lower standards can be quite difficult for people in our industry to accept, especially those in a quality or auditing role. But in fact, perfection is mandatory only in certain areas—patient safety and compliance at the top of the pyramid, of course—and we can rethink our standards accordingly.

The path to performance

More broadly, we adhered to the following concepts in our approach to introducing and consolidating change with both Bayer and Parexel teams.

Establish new processes. Develop clear guidelines for making adjustments according to the DSO model and implement collaborative decision-making processes.

Communicate clearly. Explain the DSO model and its benefits to all stakeholders, and address concerns and questions quickly and openly.

Implement in phases. Start with pilot projects of teams and gradually expand based on learning.

Provide training and support. Offer comprehensive training on DSO principles and ongoing support and resources.

Lead by example. Ensure that company leaders demonstrate DSO behaviors. Have them showcase early successes and improvements.

Set up a framework for continuous feedback. Check in with team members regularly and adjust the approach based on feedback.

Measure and celebrate success. Define and track relevant KPIs, and recognize and reward adoption of DSO principles.

Reinforce the long-term vision. Align DSO with overall organizational goals and consistently communicate long-term benefits.

A first step: Nominating a DSO frontrunner

As a good example of these behaviors, we asked one of our joint teams to serve as a DSO frontrunner. Setting a goal of achieving the best timelines, the team leveraged resources across all regions and functions, with internal and external stakeholders. They created a smaller team with a mix of experiences, perspectives, and creative ideas within a “safe to try” and “play to win” environment. Because they were empowered to make decisions, there was a high degree of trust. Working without fixed rules allowed them to keep their minds open to experimentation. With this mindset, the team was able to discover new insights, points of contact, and collaborations within the partnership.

The feedback from the team was quite positive, with the recommendation that, going forward, we identify a few cherries on the cake and pick them. In other words, seek quick wins and don’t try to tackle everything all at once.

Consequently, we are encouraging teams to work as often as possible in these innovative 90-day cycles to act, learn, and evolve quickly.

A journey of learning and continuous improvement

To conclude, we aligned our partnership to move from traditional reactive mindsets to creative mindsets, imbued with a spirit of possibility, discovery, collaboration, and self-authorship. For Bayer, the model is already reaping dividends. It was the right choice for the company’s present circumstances and fits with its organizational goals. For Parexel, it opens the door for team members to enhance the existing collaboration and adds a new management model to the company’s broad capabilities. Yet no single approach has all the answers. Openness to change, and the willingness to adopt a different paradigm to achieve clear management objectives, should always be the overriding ethos.