Driving Change: Focusing on the Long-Term
Do you know how the industry will look in 15 or 20 years, and are you prepared for that future?
Today, pharma is faced with several scientific advancements, digital developments, and paradigm shifts that will shape the future of the industry. Failure to respond in time will be costly, if not a deciding factor to a company’s staying power, and so companies increasingly need to adapt and think in the long-term.
However, aiming for long-term gain can lead to short-term loss, as highlighted in the Whitepaper ‘GSK’s new ‘ethical’ customer approach: Is it delivering?’ So, what are the prerequisites and challenges to achieving long-term change and how can companies ride out the short-term losses?
Pre-requisites for long-term change
Major changes typically involve a strategic shift (market place evolution, change in product, change in leadership, and more), which can be laborious and time-consuming for large organizations that are often slow to react. To prevent getting lost along the way and ensuring they get over the ‘change curve,’companies need to thoroughly consider some important elements during the planning process of long-term change:
- A clear business need and strategic vision
“The first thing that really has to be put in place is a clear definition of the business need,” says Craig Flanagan, Global Head Field Excellence & Capabilities at Sanofi.Outlining the purpose of the long-term change, tying it to a business opportunity, and building out how the organization will look at the end of the change period are important preliminary steps.
Companies also need to understand how robust the change is going to be.The long-term plan must be strategically aligned towards a clear vision. As Gordon Blake, Design Thinking & Change Management Consultant, asks, “What kind of environment will be required in 5, 10 or 15 years’ time? How can you ensure you address the external context? What capabilities do we require now and in the future?”
- Early investment from stakeholders
Preparing for long-term change involvescreating a foundation of readiness throughout the organization. It is ideal to conduct “listening without solving” sessions, says Flanagan, which are open conversations with employees – generally about what’s going on with them individually and what’s on their minds in relation to their work environment. Key themes can be identified during these sessions that can be utilized in defining the short-term wins.For Ben Whitter, Director of Organizational Development at the University of Nottingham, Ningbo, China, one standard to planning for change is, “The application of stakeholder analysis models, whereby the key people within the change are identified early and – subject to their assigned status – are fed information or actively brought in to be change champions.”
- Setting up the infrastructure
Long-term change needs to be supported by updated infrastructure and systems.As George Katzourakis, SVP, Europe, GSK, told eyeforpharma, “We had to build a lot of capabilities, skills, competencies, [and improvements in the] medical, digital and marketing [functions],” referring to GSK’s shift away from target-based sales force incentivization and physician-speaker payments.
- Transparent and inspirational leadership
Another prerequisite is trust in - and integrity from - senior leadership. Executives need to show support for the change and to be honest with employees about what the long-term approach is and what it will bring to them, the business, and the customers they serve. “If employees believe in their leaders, they will believe in, or at least respect, that the long-term change is in the interest of the organization and its people,” says Whitter.
Sustaining the desire for change
Developing a plan is a relatively easy part of the change process – execution is an entirely different story. During the implementation phase, the ‘people’ aspect of change becomes extremely critical. As Emmanuel Blin, Chief Strategy Officer, Bristol-Myers Squibb, aptly asked during a talk on ‘The Future Commercial Models of Pharma’ during the FT Global Pharmaceutical and Biotechnology Conference 2016, “How do we win over the hearts and minds of our own colleagues to want to change?”
In the short-term, there will be potential losses in employee engagement (among those who do not understand or prefer the new direction) or productivity and sales (due to unfamiliarity with new procedures and tasks). Short-term losses can cause the organization’s inspiration for change to dwindle. Frustration can be especially high among first line managers who need to guide their teams through experiences that are also unfamiliar to them. Somehow, managers will be required to show a level of vulnerability and to accept that it is possible for them not to know all the answers to their team’s questions.
Executives need to empower people to persist despite any short-term losses. According to Blake, it is necessary to develop a Governance Structure or a Change Charter that defines how commitment towards the same goal can be ensured. This charter should include the design of a realistic ‘burning platform,’ methods to create an organization that accepts the change and perceives its necessity, and steps to spark traction around the change agenda with mid-level management.
A burning platform refers to creating a sense of urgency for change and providing constant communication to build understanding, support and desire for change. Time and time again, employees will need reminding of why they must weather out the hassles associated with accommodating incremental workflow changes.“Companies need to facilitate people’s understanding of the change journey to ensure they are happy to continue with pursuing the solution and that they are aware of what comes next,” says Blake.
Furthermore, the purpose of the change needs to be communicated well enough that it becomes emotionally binding.“If the purpose is clear and built into the fabric of an organization,” says Whitter, “then the eye is constantly on achieving that purpose. And the fixation on short-term results becomes less intense; any pain or costs up front are viewed simply as stepping stones on the way to something greater.”
Utilizing metrics
Metrics will also play a key part in securing long-term change. What would happen in the first 90 days, the next 90 days, the first year, etc.? In answering this question, leaders are compelled to align incentives and reward systems with a new set of desired short-term activities and behaviors. “As you plan the long-term destination, you have to have some short-term visible wins signaling that change is happening or that it is being accepted,” explains Flanagan.He adds that publicly recognizing individuals who set a good example (with regards to embracing the change) can help convince others to think, “Maybe, I should also get on board.” Katzourakis also shares that one method of building internal belief in the change is to “share some early wins or aspects that are working so that people get motivated and engaged with the new model.”
Companies need to identify the specific organizational areas that require more support and additional training. “This can be achieved through metrics- or impact-driven survey analysis to better understand the employees’ situation or specific context (e.g. region, language, function),” says Blake, which could inform the design and iteration of intervention portfolios that target individual and/or group needs.
Embedding a change mentality
Despite the presence of several well-known organizational change models, the rate of failure among change projects is high."The difference is the discipline, courage and expertise within the organization to implement the change,” says Flanagan.Such expertise should lie in a core group of change agents, separate from senior leadership, who are tasked with leading and orchestrating the change.“Orchestrating change involves balancing the need for program rigor against ‘running with it’,” explains Blake, “and knowing how to push the organization towards meeting goals without breaking it in the process.”
The ability to infuse structure with flexibility becomes crucial during the reassessment of the change process. According to Flanagan, “You need to become savvy in how you approach your key performance indicators (KPIs). You need to be comfortable with seeing short-term loss, but also have a defined point where the KPIs are supposed to turn up.”
In addition, companies need to learn to approach change as a process rather than as one major outcome.“Organizations need to build change into everything they do [rather than] see and experience them as isolated projects,” says Whitter.
“Businesses should ‘hack away’ at change rather than have major course corrections. Small, steady, and planned iterative changes are more effective ways to succeed at change because this prevents markets, customers and employees from leaving the ship, sinking or not,” adds Blake.
Embedding change in the organizational culture should be done from the outset of the change with the adoption of ‘Design Thinking’, which Tim Brown, CEO of design firm IDEO, defines as “a discipline that uses the designer’s sensibility and methods to match people’s needs with what is technologically feasible and what a viable business strategy can convert into customer value and market opportunity.”Essentially, it is a learning-by-doing method to increasingly empathize with customers and develop customer-focused solutions.
The danger of complacency
Poor outcomes such as low market share, high customer dissatisfaction, and high employee turnover rate are symptoms of the need to make a change. However, even in their absence, companies might already need a change."What is difficult to discern are the changes we need to make by the time we get to that point where we need to be making them. Typically, we catch them [the symptoms] halfway through their decline,” says Flanagan, emphasizing the need for foresight when current practices require change.
In GSK’s experience, Katzourakis reveals,“[We were] fortunate to have a visionary leader with Andrew Witty, who recognized that there was an issue and we needed to do something about it,” explaining how major changes require people to be bold and to challenge themselves.
In the current environment of the health market, there is no place for complacency.A decade or two from now, the top players in the industry will be those organizations that thrive in change and are fully capable of adjusting incentives and performance metrics to guide behavior and are flexible in amending their current trajectory to better respond to the needs of the market.