Transformational Leadership – The Courage to Infuse Customer-Centricity
Annmarie Neal talks about the need for transformational leaders in pharma.
The need to reshape the culture of pharma organizations towards a more patient-centric design, or one focused around the needs of the patient instead of the bottom line alone, is becoming more evident to executives. Organizational culture shaping requires a shift in the attitudes and mind-sets of employees, but change won’t go far if leadership is not ready to embrace change on their level.
“If your intention is to elevate the patient as a priority (patient centricity), it stands to reason that your internal processes should support that,” explains Annmarie Neal, Founder of the Centre for Leadership Innovation and author of ‘Leading from the Edge“. Culture change does not happen by simply drawing up a plan or a strategy. The real struggle for organizations is implementing such a plan. Neal, who shared her thoughts about culture shaping in eyeforpharma’s Whitepaper “Patient Centered Culture by Design,” talks about the need for transformational leadership.
Leadership plays a vital role in driving the transformational message down and infusing it into every part of the business. Once a customer value proposition is in place, the whole organization needs to align with it, and all executive briefings and rewards and recognition should dovetail with the strategy and execution plans.
Measurement is another equally vital component of transformation in order for a business to know if the strategy is working. A further factor would be the use of data to support the strategy. Customer Relationship Management (CRM) applications enable a company to understand who the customer is and, in the case of pharma, can assist with a better understanding of how to approach the patient in the marketplace.
The challenges of transformation
One of the most difficult aspects of transformation is that it involves people who are challenging the things that made the organization successful in the past. The organization already knows how to go to market, what the customer culture is, and how employees do what they do, but now employees have to unlearn old habits and take a leap of faith into following a new modus operandi. Those companies that are aware of the work required to make a social shift are usually more successful. They put constant, unremitting effort into keeping things moving forward and are mindful of avoiding the inevitable pushback to revert to the previous model.
There is a real difference between an organization that is incrementally improving versus the one that’s transformational.
Neal suggests that companies create a “transformation office” and appoint an executive to oversee the transformation in the same way that they would any other business operation. The office would coordinate all the various disciplines required to support the strategy. This office would plan the necessary transformational projects, oversee various work streams, and make heavy use of a discussion board filled with interconnected key points that reveal intense collaboration for the organization to arrive at transformational yet actionable solutions.
The need for transformational leaders
Neal explains that the common type of change seen across organizations is incremental in nature (e.g. Perform a little bit better than the previous year, the most recent product or the incumbent leader.) She points out that this kind of change can be handled by leaders who think and decide based on increments and scale. “There is a real difference between an organization that is incrementally improving versus the one that’s transformational,” she says, underscoring how organizational transformation is only possible with transformational leadership.
In her experience, Neal has observed that many leaders are skilled in traditional management, in looking at values, and in driving the guidelines of marketing and sales issues, but they don’t understand how to transform. They work under the rules of a traditional playbook that is motivated by incremental improvement. Neal doesn’t discredit this type of business growth. Hiring leaders who are slightly better than the organization’s current leaders does succeed at pulling the business model and priorities forward, albeit in small progressions. But for organizations hungry and in need of radical improvement in order to provide a modern take on value creation and to keep up with the ever-changing landscape of pharma, they will need leaders who possess the talent for disruption. Transformational leaders, as Neal describes them, should be innovators who like to look at the business from a different perspective and warriors who aren’t afraid to constantly challenge conventional wisdom.
For this reason, Neal feels that anyone who has grown up in a business and likes order as opposed to disruption will find transformation even more challenging. Transformational leaders adopt a management style that’s very different from the traditional ‘command and control’ style that some managers and employees are used to. To be successful, a transformational leader needs to be looking at the entire scope of business through a different lens and succeed at making it clear to everyone why incremental change isn’t the way to move the business forward. He or she therefore should thus be able to arrange the diverse set of talents in the organization to produce creativity and innovation from employees.
Dealing with talent involves intense collaboration to drive success across the entire value chain. This not only requires transformational leaders to be comfortable with a far more inter-personal and collaborative style, but it also implores a strong performance management system. According to Neal, “It needs to be clear that employees can’t march against the rhythm of the new strategy.” Once the direction is plainly stated, managers need to demonstrate that, “This is where we’re going; if you can’t buy into this, we’re happy to have you leave.”
Developing transformational leaders
Transformation will require leaders to constantly test their personal assumptions and push themselves to a whole new level. As Neal has observed, picking the smartest or most agile candidate to fill the seat of leadership no longer satisfies the demands of business. It’s now a quest for courageous and vision-driven game-changers who have the ability to galvanize the business into realizing that unless certain technologies are employed or certain market transitions made, opportunities will be lost and the business could be in trouble.
Neal thus stresses that companies need to be allowed access to multi-disciplinary ways of helping with problem-solving and creating innovative outcomes. She feels that if development can take place around real learning, the change process can be fast-forwarded quite smoothly. However, she recognizes that this takes courage, as many companies are still deeply inclined towards traditional development styles.
Neal also emphasizes how essential character-related qualities such as empathy, authenticity, and humility are. These aren’t attributes that would have been top-of-mind awareness for successful leaders in the 20th century, which gives an indication of how different a transformational management style needs to be. Certain soft skills and management techniques can be learned but character is inherent. Neal recommends recruiting the right leaders into a business and weeding out those who are the wrong cultural fit.
Getting the right talent on board
Organizational culture change involves restructuring the business model and putting transformational leaders in place, but a move towards patient centricity also requires a shift in the type of employees. Neal recommends appointing a “Talent Organizational Architect” rather than a traditional HR person who focuses on processes and compliance. The architect would focus on combining the patient-centric strategy with the performance management system to drive the customer value proposition forward.
In order to execute successful transformation, a business needs to be very clear which skills, capabilities and attributes are needed in its employees. Companies such as Amazon, Zappos, and Virgin are mentioned as businesses that know exactly what it takes for them to be successful; as a result, they ensure they have the talent base to support their vision. Again, as with strategy, while it is crucial to have the right talent in place, this is just a starting point. Employees then need to be trained, managed, and rewarded beyond what Neal calls “old school methodology”.
Everyone in the business has to be aligned to the value proposition in order for the customer experience to be uniform across the board. “You can’t have some groups supporting the customer in one way and others in another,” says Neal. This is what forms the bedrock of culture and promotes enablers to help the business create a great customer experience.
Motivating your employees for transformation
As far as Neal is concerned, all employees need to know where their roles fit into the whole and what their contributions are to the business. She gives the analogy of a coach training runners and then putting them into a swimming pool and expecting them to swim to Olympic standards. She believes that many employees are motivated by being asked to do something they never thought they could do, but the demands need to be realistic and the expected outcomes clear. In fact, Neal feels that companies focus too much on how to motivate staff and not enough on removing the de-motivators that exist in all organizations. She provides the example of a rigid organization that still insists on strict time-keeping and wants private affairs to be scheduled during an employee’s personal time. If, for example, for good service a staff member needs to contact a customer at 8:30 at night, how does this tie in with the rigidity of working hours?
If you’re in pharma and are trying to make this transformative step, this is not something you hand over to HR and have them handle it.
This, Neal feels, is where the Talent Architect would be crucial in designing restrictions that prevent employees from finding their own solutions. She also believes there is a big difference between motivating baby boomers versus millennials. Baby boomers responded well to rewards; millennials enjoy flexibility, are more motivated by social causes, and thrive on being able to work things out for themselves.
Advice to companies embarking on a transformational journey
Transformation should be embodied by the C-suite and infused into the organization by a Talent Architect. “If you’re in pharma and are trying to make this transformative step, this is not something you hand over to HR and have them handle it,” advises Neal. She also stresses that a company shouldn’t give the most important element of the business - the people and the culture - to a department that is traditionally required to be compliance oriented.
Neal notes that so few companies are good at transformation because it isn’t an easy journey to take. It requires a leader who thrives in challenge, lives for change and does so for the benefit of the patient. “It takes somebody who has a great soul to transform an industry; and you don’t find lots of people loving you at the end of the year,” she says. Nevertheless, it’s a journey that must be taken for economic survival and Neal urges pharma companies to have a clear value proposition and then to find the “sweet spot” that differentiates them in the marketplace. She strongly believes that the leadership platform can help to figure this out, and that if companies can find a way to create a different type of value amongst their patient-base, the process of transformation will become that much easier.
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