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Dhanaraj is Evelyn & Jay G. Piccinati Endowed Chair in Teaching Excellence, professor and chair of the Department of Management at the Daniels College of Business, University of Denver.
Eli Lilly in India: Rethinking the Joint Venture Strategy
Charles Dhanaraj, Paul W. Beamish, Nikhil Celly
Eli Lilly in India documents the evolution of an international joint venture (IJV) over a 10-year period (1991 to 2001) between
• Eli Lilly, a leading U.S. pharmaceutical company and
• Ranbaxy, the Indian partner that marked Lilly’s entry into an emerging market, India.
The case highlights three distinct phases of the evolution of the IJV and raises relevant management issues at different phases of the IJV's growth.
Transcript
Hey, I'm at Quinn and you're listening to decision point from Ivy Publishing at the Ivy Business School. Thanks for joining us for the final episode of Season One. Today we revisit another classic case, Eli Lily in India, rethinking the joint venture strategy authored by Charles Donner rage, Paul W B Mish and Nikiel Selli. Eli Lilly and company is a leading US pharmaceutical company. Together with India base Rambixi Laboratories Limited, the two embarked on the creation of a joint venture that would go on to last a decade, becoming the forty six largest pharmaceutical company in India in a market with well over tenzero. Today we sit down with Charles Donner Raj, a professor and sheriff the Department of Management at Daniels College of business at the University of Denver Donna. Raj reflects on his case writing journey with Eli Lily, teaching joint ventures through the case method and more. Enjoy so, Charles, thank you so much for taking the time. I know you're busy. I'm really looking forward to this conversation about the case and all of your experience around cases. So let's start with the case itself and the protagonist. Could you set up for listeners what's at stake in the case for Dr Teller Ego Elo Eli Lew is new president of inner inner continental operations. You talk about what's really on the line here? Yeah, first all, thank you so much, Matt. My pleasure indeed to join this. This is a fascinating term what you call an effort that you're putting together. So I'm sure it will help a lot of aculty. The going back to the really like the sea doctor Tar goes challenge. At that point. In fact, I had to tell you when we started writing that case we wanted to write about how to drive an effective joint venture right. So Ed to the the whole thing that this was even at the point of cutting off was not even in our horizon when we started developing the project right. But then as I started getting the so I approached the company said Hey, you, I would love to do this, and when we started developing the storyline, then I come to know that in fact they were going through the process of considering breakoff and we need to read. So Nesson the whole thing was a different so when you, when you at that point. If you take if you put yourself in telarigous position, here is a very what's what's called a very successful joint venture, because really got a lot out of the partnership and run backs. He got a lot out of this partnership. So very successful joint venture. But then over time things have changed dramatically. The institutional context has change, organizational capabilities have changed. So to what extent is the joint venture creating value? So that is why we wefend it as rethinking the strategy. So if I was actually the challenge for the Dr Calibre, like Hey, what do I do with this John Mention? Now, if I break off, it would sound like such a bad olement to my India strategy. If I keep continuing, I'm not getting much of a value. So what do I do with that? So and this challenge is an undoing challenge right to me, whether you are talking about it in two thousand or two thousand and twenty or perhaps in two thousand and twenty five, the challenge of change in the environment and ramp up in organizational capability. Both of these things position of partnership under dures. So you can't have a poet called a static partnership and how do you think about it in as a dynamic entity? And that's a challenge that a lot of place and it's so relevant to many different companies and types of organizations. And that's where I want to go next, because I know that you've got a relationship with the company. How did you originally connect with them? You know, I'm from India, right. So when I read it, in fact it came up in the pay papers about this joint benches, and then I'm a fresh, newly minted Assistant Professor at Indiana University and I really is just like I have to drive past lie every time when I go back from home, to from my office to home. So when I saw that in paper, I said I need to do something about this. Said because I just as have finished my thesis on joinvent Christ. So we had a professor who's who was a lawyer, legal studies professor, who had a husband who was with Lily. So so I walked up to this professor's room and I said, Hey, your husband is working in Li Lily. Would he be willing to talk to me about this joint venture? That's how the whole thing started and learn behold. We connected with human and he said, you know what, I'm not the best in this area, but I'll tell you the guy who is writing the contract for this joint venture. You should talk to him. So Ricky paid was the guy who was writing the contract for the jointment and he was the legal expert for Ali Lially, he was heading the legal team for Lily and he was put in touch with me, with me and we are a rage for a lunch and that the rest is history. In fact, even as of today, twenty four, we started it in one thousand nine hundred and ninety nine. The project like twenty twenty. I'm now good friend with a really with lily and this Vicky paid I'd been instrumental in connecting me with so many people. That's how it started. Yeah, that's such a great story and it illustrates how, you know, sometimes it's just reaching out and asking questions. For authors that are thinking, how the heck do I get started? It's sometimes just those personal connections or just reaching out and asking and you know, developing. It's so great to hear that you've got that relationship twenty one years later and have you know, a few years later in oh seven you wrote another case on the company. was there anything that you could think to share with our listeners what the keys to success were for keeping this relationship so strong over such a long period of time? What did you do to take poster that? That's in fact I wrote a piece on casewriting as academic scholarship. There is a fundamental question in in research faculty. Why would I even write a case when it is not going to be comfortable my penny? One of the rational casewriting I put there is the building the relationship. casewriting allows you to build a relationship with the with the with an organization, and then when you teach their case, the guy comes solver to the guy or the lady who comes solver to the class, and then once they come to the class, they build it up up, and then that leads to you to a series of next few steps. Let me take this, sorry of Lily. So we started as a joint wrench check is study and we connected in two thousand and one, but by the time we finished the project it was two thousand and four. Right, it's it was. It took me fair amount of time because as we started interviewing it has gone through multiple faces and so, in a since I fairly knew the history when it was at the peak and as it went through the multiple stages, and then we finished the case and became a be another best seller. But then internally it allowed me to connect to all the different once I knew doctor Larrigo, then Tarrigo, but wanted me to meet with the CEO, and then then we met with a. They had a very strong alliance management team. So we started working with the Alliance Management Team and in fact that got us a National Science Foundation contract. In fact we did an NSF research grant from on alliance management with the Lily as a what I call as the inkind partner right. So that that's at the huge momentum on my research and we wrote a few follow on cases with that. And not only that, it's sort of allowed me to develop a picture and and a map of partnership strategies in a way I could not have done on my own. Continue the data thing. I really like how you use that word partnership, because you're meeting lots of people at the organization. You're finding different ways to work with them. You've written a number of different cases I think you mentioned as well that you have used and had folks from the company come into the to the classroom as part of the teaching and if you done that, yeah, yeah, in fact were during these last twenty years. They had been piece three CEOS, thats in Nitrell, followed by John Lack like and followed by David and all the three CEO essential up in my class. Wow, it must be. It must be so great for them to see the case come to life in the classroom and again, such a great way to build that relationship with not only the organization but individuals there. That's so great for for authors that are just starting to think about you know, how can you get the folks featured in the case into the classroom, whether it's now via video zoom calls? That's great and from what I've seen, people are willing to do that, really willing and interested to see how students navigate the case. That's very cool. Yeah, actually, I'll give you any one this. In the case we feature one of the guy who's the head of at that particular time he was the CFO for one of the gun benches in one of the funnerships in in Mexic go and but at ten years after he cost me a just out of the blue he said, guess what, I'm in Spain, I'm meeting with this with this some executive, and he said he just did a case in about Alli lely and in his executive program at I ac and key saw of the name past and the sense that this guy's name the Mexico CEOS name. So that is how they even those the references in the case, because we are putting the real names and the real titles and it's sort of makes a lot of meaning for those people who are appearing on the case. So yeah, it makes a lot, I agree, meaning for them. Oh that's great. Now I want to I want to ask you a few questions technically about, you know, how you and your coauthors, you know, fought through the learning objectives and planning of the case early on. So you've got the relationship, you've got the story idea. How did you did you sit down and discuss learning objectives or did they come out through the process of writing the case? Do you mold over times? It follows my advice, as you know, right. And then joint venture we had. In fact, I wrote two cases with Paul, one on Samson. Another one was on IPC, but none of them with joint ventures. So when I finished my thesis on joint which I wanted to have a case on joint venture. So and this came up. follows. Follows extatic, because it said, yeah, that's it, that's that's all our scores as a company to work with. Let's let's go after it. So we originally planned, okay, how to develop a working joint venture? How do you develop a decent working joint venture? But then as we started interviewing and as we move through their faces, then we realize this is coming apart. So so the learning objectives change. And then as we started teaching, in fact you know that there's aid. There are two versions of the teaching, not teaching, not version one, teaching not do so we realize that you can do more than just about trying venti strategy. You can talk about dynamics of an organism. So to some extent, as we taught the learning objectives, the world and the case had enough material in that. So to some extent I think we put reasonably tightcase but also enough information that that allows one to go back and forth see the problem. Most of the joint venture cases have is they don't connect you to the broader corporage strategy, right, and so the this, this case in particular, connects you to that two levels with the you can't think about a joint venture absent the broader corporate statue. So that that's way this case allowed it very well. Yeah, it was great. Yeah, and one thing I want to reinforce is your willingness and your coauthor's willingness to be flexible and to take an and almost let the case guide you as you as you went through the writing and you know ideas of all of etc. And for those listening, the Paul whom you mentioned in the discussion, that's Dr Paul Bemus, who's who was a leader at the school and internationally and case writing and case teaching and a WHO has been a great mentor of I be publishing through many, many decades actually. So that's what the Dr Paul Beamus who were speaking of today. So thanks you for mentioning him, because it's he's great. And then I also tell, like the the case was held up for sometime in fact, that we knew when we want to go. The case was written and I had taught it for at least two years, two consecutive years, but I not published it because we didn't have a teaching note. So it was at that time we had to bring in one more CO author to help us to get it to the finish time. So Nikol came in, very handy. Nikol was a douctless wom at the time and he was finishing his work and he said, Hey, here is one, can you help us to finish it out? So so he took on the teaching notes and then got the the otherwise into this would have come finished right the point I'm trying to tell your audience is sometimes you need to bring in partners when you want to get to the finishing line, because you may have a fantastic story, good to teach, but it at the at the end of the day, crafting the right up and stuff needs work and you need to find coauthors who can come in and work with you to get into the finishing line. Otherwise we have a lot of cases that are that are not and just in the desk. And that's such such great advice. Don't overlook the opportunity to bring in help and another expertise. And you mentioned teaching the case and it's been a best seller for many years. Have there been any challenges or surprises to you or your colleagues as you've brought this case to life in the classroom? And he speaks surprises? Not so much of a surprise, but it I mean we discovered a lot more how to teach. In fact, when we wrote the case we never thought about role place and all this dynamics, but now when I teach it I use role place and stuff like really really team versus and backs the team and how they how they can meet together, creating what I call a final negotiation. Okay, what should be the takeoff pins and stuff. So those are interesting. The biggest surprise to me was how well it was start by faculty who have not been through the case. I mean when you when you see your case being taught in the manner in which you come out and say, wow, that's an interesting one. Right. So to when I give attracted the one of the reason that we wrote the second teaching note was when I saw people teaching the case, I said this is I wrote it as a sign off case in the sense Ja weep. How do we bring a joint venture to a close? But then as I saw people teaching it, I saw them teaching it as how does the joint vent a wall, the stages of the evolution joint venture? How do you lead a joint venture? I mean these were things that we never thought when we were writing the case. So these things, it was a surprise to me how people were able to use the same case and and teach it on a stretch, it on multiple friends. So we came up with the teaching note to the the other one was the video. The pen I developed the video at that point. The video was not that common in most of our case work and I had a very good partner at Indiana, Jim to us, phenomenal videographer, and we basically got this was some one of those tricky things when how do you get senior executive to show up in a video and talk about some of the things that that we had gone so so all those were elements of learning that added the attractiveness to the case. So I want I want to talk a little bit about that. As you you mentioned video and sometimes it is a challenge to, you know, get senior leaders to feel comfortable with that. Any tips for those that are trying to work with the senior leaders. What did you do to make that happen? Yeah, you need to have an internal champion. See, we keep ad turned out to be an internal champion for me. So you need a powerful person who who has access to the senior executive but who may not be there the content expert. But if you can have very strong personal rapport and good friendship with that person, he or she can drive through anything within the cup. And that strategy has worked for me for all my other cases with comings or anything else that we wrote. So I always make it a point to make sure that we have one internal champion who can help you, because a lot of times, when it comes to signing off, organizations are discovers, right. So anything small they think too much. For example, in the lily case, for example in the teaching note, you will find some of the break off values and all that's really how much money leading paid to unbox get stuff. Well, as the organization thought it was a secret they cannot reveal, and I found there was a press release of the actual data. So so sometimes organizations are too to discover. So they are very they want they don't want to say anything that is too sensitive. So it is there at those points when you need an internal champion who can tell you, okay, it's talked to tell ego may not speak on video on this value. But then why don't you take this effense and take take it out? So, yeah, the nobody react. Yeah, yeah, yeah, to wait through, to have somebody guide. Yeah. And and the legal stuff is a pretty big, big one. Like, for example, I did not do that in one case. When I do, when I work with Rolls Rice, we had a fantastic case we develop and unfortunately the CEO had moved on and I did have an internal champion absent him and the new CEO came in and he saw the case and he said, Oh, it's like two sensitive data and stuff. So without the internal champion it's very hard to get good case out. So focus on the best internal champion and treat them very well and earn his or her confidence. Then you have your such a such great advice, and it does you know, that speech back to you know, how did you maintain a relationship through all these years, like maintaining those champions, getting to know the culture of the organization, etc. Now I want to shift slightly because before we were on the call here we were chatting briefly about, you know, new case method initiatives, given that we're working remotely or courses are going digitally. Are there other initiatives or movements that you see and in case method that you're that you're excited about or you're starting to dig into yourself? Yeah, see, the first thing I had, at least for me, my own learning and the one I shared with my faculties, they are not isomorphic in the sense you cannot just replicate the same methodology in the virtual media. When you have bodies present, there is a what I call the psychosocial energy that is out there in a claspel. That is not that is absent in a virtual media. You have on the twenty five pass on the video, but but then there is something about the body language, the air we breath, that g's in the classroom. But one corner of this classroom a statement from one student from one class Pron of the classroom can ressimate with another student, another Cla, another con but in a virtual medium that's absent. So you have to recognize that psychosocial dynamics is absent in the virtual idea. But you have something more that you can do, something different that you can do in the putroon. So to recognize them as two different genres. Number number two is in a in a in a case, coer case me and a typical case class. In fact, I have run case case teaching workshops and stuff. I tell us focused like a okay, have these questions. Okay, what is your pastor one question? What is your pastor to question? What's your pastor P question? So we teach our teachers to think in terms of series of questions and then allow the questions to generate the discussion. Right now, and when I see faculty doing the same thing on the virtual media, it's it falls apart. Right, okay, what do you think? What should this? Should this be a pass on mine? And then they go first. That so. So how do we sow the the solution to that is bringing in structure. Right now, in a typical case we do this what I call a board structure and sort we put this. I mean I think you are familiar with that matter. I think I we we drill it down to death and say, okay, what should be the boat structure and stuff. So use the board structure to create the flow for your for your class. Now, in fact, I use the in fact I use Steven Spiel but so you had to think like Steven Spielberg, not as a professor. So how do you get this? These are a series of movements that are coming in. So you think about Korea grapt being choreographing the session. So you in fact, in a virtual medium, the first five minutes matter a lot, right, you can't just start the case discussion in the same way we do in a physical mean the the cycle, the psycho social dynamics is absent. So the first five minutes is going to be very important, and that setting them up for the prework is also going to be important. So how do you connect their synchronous and the synchroness in such a way that the takeoff will be small? So very clear assignment questions and a very clear prework will make the discussion much more interesting. Right. And then the use of the third one is the use of breakouts. People use breakouts, but what they think is you just tell them to do something under they break out and they come back and that that falls upon actually, when you put them off into breakouts, you literally the energy goes down and then you never reclaim it when you when they have back right. So you have to find a way to make breakouts as energizing events. The only way you can do it is you need to find it what I call that sensitive point, I mean the the tricky point. It has to be. It has to be what he called it has to have enough push and pull in the sense the question that you are leaving, which should not be an sno question. It has to have reasonable argumentation for both sides to talk about it. And then, number two, it should also have a clarity so that they can come back and communicate. If it is too complex, it will be all over the map. So so you should, for example, I like one of Peter killings case where he says, okay, on a scale of one to ten, where would you put this? Put the complexity of this issue right. And I he gives okay, one, anybody can do it, ten, only at this season and phenomenal leaders can do it. And then he puts number five. Even a professor can do it. So just to put a humor it so, but then that that quantification allows these students to debate, but then when they come back they say, okay, my number is saddle right, and that allows multiple groups to connect and create. So you need to co you need to have a way in which designing the Google break out groups, which I think we don't have enough training or enough inputs on that. So those are somethings. And then the final one is the landing part. People turned under the underestimate the landing, the the role of the landing in the typical case discussion we do, the wrap up discussion and and put this right and stuff. So how do you how do you land virtual class and synthesize some of what has gone on? So using the white boats that I'd be created during the stuff and then walking through. Okay, here are the three white boats they went through and this is the great takeaway and this is the so that is important because when people abruptly land the plane, because oftentimes, Oh my God, two more minutes, okay, and next week and then it is so the whole learning gets pricked away. So I always say think about when you do the class that US these all these molecules of learning that they are might but if you don't pull them and seal them, by the time they come to the next class they fitted away. So in that that landing part is important. So those are the three things I think we need to do something to do to train and highlight it for our virtual cans teaching. Yeah, and what I want, I'm pulling out of this is the you know, be very so mindful of the differences in learning styles, the differences in the platform, you know, moving from in class to online or creating and designing your class conversation, the questions that are asked, the tools that you're going to use. It really requires some thoughtfulness and taking the time for the the case user and and if you're thinking about writing a case, including this in your teaching notes a great ideas well, thoughtfully, you know, not just take it from in class to online and the same think about it, think about the tool, think about how this is going to land and in the classroom. And this is really thoughtful advice for our for our listeners. Charles, I know your time is valuable and I really appreciate all of the tips and advice that you've given in this I think I'm going to encourage folks to listen to this conversation a couple of times because there's lots of great advice for writing, for using in the classes and also how to go online which is a huge question right now. Charles, thank you so much for expending some time with us today and I hope and we should try to have another conversation like this in the future, almost like a volume two of the discussion. If you're open to that, that would be great. I'm plea should see the case writing. It's aid you want to. What a FID of time. Now I think we are moving to the new enough education. So to some extent, how do we eat think stuff? So? Well, my pleasure and I'll be able more than happy to talk to the imagine. Thank you for the one of the job you and if you enjoyed today's episode, subscribe to Decision Point on spotify or wherever you listen to be sure to check out the show notes for links to cases, resources and more. have any feedback, send us an email at cases at ID DOC IT