How should your firm find culturally compatible outsourcing partners?

To talk through it with the Redica Systems community, Stephanie Gaulding stopped by our virtual studios for a webinar she titled: “Cultivating Successful Outsourcing Partnerships — The Power of Cultural Fit.”

With 25 years of experience in quality management systems and leadership roles in the regulated life science industries, Stephanie Gaulding is a managing director at Pharmatech Associates, an ASQ-certified quality auditor, and a pharmaceutical GMP professional.

“For any of us who have worked with outsourcing partners, we know that sometimes we’ve had good relationships and bad relationships,” says Gaulding. At the bad end, it can get really bad, she says, ending up in drug shortages for patients or even delayed approval of drugs for conditions that currently have no available treatments.

On the other hand, “I think the two most important benefits of cultural alignment really get to risk reduction and mitigation, and the long-term sustainability of the relationship.”

So, it’s crucial to start that relationship off on the right foot.

“You kind of go through a little bit of a speed-dating process as you go through partners looking for the right one.”

The Right Foot

“I talk about ‘courting’ outsourcing partners,” Gaulding says.

First, understand your organization’s own culture. “You can’t go having conversations with intent to look at the cultural fit if you don’t know what you’re trying to fit with, says Gaulding, recommending a few questions firms can ask themselves to better understand the internal culture.

In an ideal relationship with this partner, how would you handle communication, escalation, and day-to-day operations?
How involved do you want to be in critical decisions or issues? Which events or decisions do you feel are critical?
What level of risk-taking are you comfortable with? Do you need to know about all risks immediately?
What level of flexibility and transparency do you expect from your outsourcing partner? How responsive do you need them to be?
For this potential partnership, what would constitute success? For your company? For your partner? For your patients? For your investors?

Once you better understand your own firm’s culture, you can use that knowledge to inform your due diligence process. While that process is beyond the scope of Gaulding’s webinar, she recommends developing a checklist at the same time that incorporates oversight, cultural, regulatory compliance, financial, technical, and business matters.

Figure 1 | What do you want in an outsourcing partner? Spaulding suggests creating a checklist based on these components. Source.

Gaulding singles out the “oversight” component for more explanation — it’s in a somewhat reciprocal relationship with trust, she explains. When you have high trust in your partner, you don’t feel the need to conduct as much oversight. But when you don’t trust them, “you’re kind of looking over everybody’s shoulders trying to see what’s going on,” she says.”

Be careful because that can snowball, Gaulding adds. “It’s sending signals that you don’t trust your partner, and that can help actually feed into a deterioration cycle.”

Research Your Potential Partner Using Redica Systems

“There’s actually an opportunity in Redica Systems’s enforcement analytics modules to really dig into companies and get a feel for questions that you might like to explore with them — maybe where their culture might be, and things that could shape your due diligence efforts,” says Gaulding.

When she’s helping a client look at a potential manufacturer, Gaulding uses Redica Systems to get details on a variety of qualities. “Understanding how this company performs [somewhat] universally throughout their facilities is beneficial,” she says. (Request a demonstration of Redica Systems capabilities here.)

Figure 2 | An example of inspection data available in Redica Systems’s enforcement analytics tool.

“You start to see this diversity of their inspection basis,” in the list of inspections by country, Gaulding says. “And then I also like to come in and look at the general statistics for the organization: Do we see enforcement actions? What kind of 483 issuance rate do they have? Do they have any warning letters?”

If there are 483s, “we can figure out where those are — go take a look at that,” she says, adding that the existence of 483s isn’t necessarily bad, they “just mean there’s an opportunity to improve an organization.”

Looking at the sub-categorization of observations “really helps me understand where this organization as a whole performs across the six inspection areas that the FDA model uses,” Gaulding says.

“You can actually dig into a particular site,” she says. “You see the corporate level of this larger CDMO organization, and then you can look at a very specific [site]. And what I find really interesting here is you can see the difference between this site and corporate-level performance.”

Figure 3 | An example of the site-specific detail available using Redica Systems enforcement analytics, including average inspection interval, top cited regulations, and a breakdown of the origin of observations in the six quality-system areas.

“This is one that I would want to read more about. If your organization’s being flagged with quality units inadequate, what does that mean?” says Gaulding. “Is there an issue with the culture? Is this a one-time thing? That may be an area where I want to actually dig into” as part of a due diligence process.

Other Early Considerations

Build a strong assessment team with significant “soft skills,” rather than one that’s heavy only with technical skills.

With a strong technical team, it’s easy to “miss the signals that [the partner’s] business practices operate differently, or maybe they’re a bit more secretive, and they want to keep you at not just a hands-off, but both-hands-off, distance,” Gaulding explains.

Instead, choose “strong people-readers, people who understand body language and tone, and the stuff that people don’t actually say but is communicated through their 3-D presence,” she adds.

“Look at the dynamics of the courting stage,” Gaulding says. “That can tell you a lot about a company as well, how they actually interact with you.”

Pay attention to the timeliness of their responses to inquiries, such as when you request a meeting, visit the facility, or want to talk with people. “That may be a signal of the way they actually work,” she says. “And that could cause us to go back and ask some questions or just discount the value proposition that they bring to the table.”

“Look for those red flags,” says Gaulding, “not only from the technical space, but as you get data from going through the courting process to understand your suppliers.”

People-readers “should see red flags if there’s a cultural mis-fit,” she adds. “My recommendation is for the team to take them seriously, because if they’re seeing those behaviors in this evaluation and courting process, you’re gonna see them in the relationship.”

It Can All Depend on the Data

Gaulding offers plenty more tips on how to kick off your new partnership right and how to keep communication strong for the long term. Be sure to watch to the end, as it includes a lively and detailed Q&A session with the virtual audience.

So much of an outsourcing relationship can depend on your ability to get thorough, trustworthy information about a potential outsourcing partner. It’s well and good to speak to people who are familiar with an outside firm, but be sure to pair that information with empirical data.

With Redica Systems, you’ll be able to draw upon the world’s largest searchable, sub-categorized database of regulatory enforcement documents to make the best possible decisions on who your firm partners with.

Request a demonstration today!