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Changing with the times

Industry leaders should view change management as key to capturing value
Changing with the times chameleon

The pharmaceutical sector has some unique characteristics - and a key one is that more than most other global industries, it uses change as a basis of competitive advantage. The industry as a whole is remarkable in its ability to manage frequent and often rapid regeneration and deliver fundamental strategic changes. This undoubtedly places business leaders under pressure to be able to initiate and drive complex strategic changes on a regular basis.

With that additional pressure, and the relentless search for new drugs or the preparation for the next acquisition or merger, there can be risks. In the haste to push through M&As or drive R&D processes, many pharmaceutical companies fail to adequately develop a comprehensive change management plan or build enduring change capability. While to some this may not appear to be a major omission, there are long- and short-term costs to pay. The inability to capitalise on rapid adoption of change and to build a company-wide change capability seriously undercuts the potential benefits of the change programme.
Whether your company is a centuries old multinational or a scrappy upstart, as the sector continually restructures in a bid to adapt to new, faster-paced cycles, there is a handful of key areas where change programmes are most at risk of failing.

Do it differently
One of these for many pharmaceutical businesses is a repeated succession of lost value when it comes to focusing on and delivering their strategic priorities. This is manifest and compounded by missed opportunities to deliver the promised growth from the successful delivery of change programmes.

Ultimately, value is only captured in the execution of strategic priorities. Rolling out technical solutions on their own is not enough. To be effective, organisational change must transform the business through the successful adoption of change. In other words, people need to do things differently.

This was demonstrated in a recent engagement with a major global pharmaceutical organisation, known for its innovative business model and unique portfolio. We were brought on board to manage the implementation of a major technology change which coincided with the arrival of a new CEO.

Positioned between this specific initiative and the overall business, we needed to demonstrate the value of accelerating the change process by reducing the time it takes to embed the changes, and minimising the disruption to the organisation's overall operations.

As the organisation rapidly evolved so too did the specifications which impacted on the technical teams, and caused changes in their scope and their composition. This required ensuring that the planned changes to the system also included organisational process changes so as be able to bring people along with it. In other words, making sure everyone impacted by the change embraced it, rather than resisted it. While that may sound simplistic, if areas of resistance are not rapidly addressed, change can be short-circuited and the timelines, adoption rates, costs and savings can all be affected.

Leaders must avoid the temptation to delegate the responsibility for delivering value out of change

In real terms, the cost of ignoring stakeholders who have not adopted the change can be high, not only financially but also in business continuity, lost opportunity, unexploited resources and diminished morale. All of these consequences can drain substantial value out of strategic change programmes.

In this case, as the organisation changed its focus, under new leadership, the programme varied widely. Technology providers and client-side resources were replaced or left. It became increasingly important to maintain consistency and coherence in order to keep the momentum going. The aim at all times was to bridge the gap between the aspirations of the executives, the technical project teams and all those in the business who were being impacted by the change.

Repeatedly impeding success
Meanwhile, another recurring issue, faced here and elsewhere, came out of this same initiative. Highly polished repeatable processes, which large industrial businesses hone over thousands of hours of continuous improvement, got in the way. The natural inclination to fall back on these can impede the successful implementation and execution of change. It is often this habit of honing processes, in the absence of a clear over-arching vision, which silently erodes the value sought in change.

Similarly, in the delivery of many strategic priorities, there is a regular danger that change management is something which easily can be delegated. However, we know that this delegation of responsibility can result in leaders distancing themselves from the challenge of implementing the strategic priorities they once championed. And that allows the initiatives to fail. In this instance, however, the change leadership started with the CEO, who seized the opportunity to demonstrate real interest in the management of change, and drew attention to the need for successful implementation.

After nearly two years of significant changes in scope and ambition, the system was delivered with supporting processes and take-up that exceeded expectations.

One of the many organisational learnings from this particular project was that the success of organisational change - supporting the delivery of business strategies - in the pharmaceutical sector is driven by a common and effective organisational change capability. Setting aside the frequent misappropriation and misunderstanding of the term, effective change management should enable leadership teams and their organisations to ensure successful growth and swiftly take advantage of opportunities as they present themselves.

Capturing value
Today the evolving pharmaceutical landscape requires leaders to view change management as key to capturing value. A clear view of the importance of operational change capability is required. The emphasis needs to shift from initiation to implementation, and leaders must avoid the temptation to delegate the responsibility for delivering value out of change. As a result the constantly shifting business environment means that change management is an area requiring considerable leadership attention and organisational capabilities.

In this context it is necessary to see change management as vital to effective strategic implementation. It ensures that value is captured, and must be supported by an organisational change leadership.
As organisations increasingly need to invest more energy and resources in new strategic priorities, they must develop, communicate and execute their change programmes effectively, or risk losing the strategic value they are seeking. 

Article by
David Ferrabee

is director of change management consultancy Able and How

23rd July 2015

From: Research, Sales

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