Rapid Restructuring in Pharma

Making Restructuring Journey Successful

Before launching any changes in restructuring journey, pharma leaders should carefully reflect on lessons from their own experience and from others who have taken this path before.

Though, it is difficult to make such efforts succeed, but one recent research on what makes transformation programmes succeed, however, underscores the fact successful outcomes are promoted by a set of specific tactics.

• Be aspirational. Programmes founded solely on fear rarely lead to long-term success. Motivate your employees with a clear, compelling view of the future, not just aggressive cost reduction and performance improvement targets. Some 56% of transformations where well-defined stretch targets were established succeeded, as opposed to 21 % where they were not.

• Assemble a winning team. It is all too easy to delegate leadership of performance improvement teams to second-tier managers with the rationale that the most capable are needed to run the organization. This is a recipe for mediocre results.

• Lead from the top. Personal leadership sets the agenda as a priority for the organization and maintains momentum. Force objectivity by insisting on facts vs. opinions. Ask tough probing questions and maintain the pressure to deliver more: What are the benchmarks? What do staff and stakeholders say? What would happen if we were more ambitious in the depth or speed of change? What roadblocks need to be removed to get this done? Transformations with strong CEO involvement were more than twice as likely to succeed (a 49% success rate as opposed to 24% without).

• Engage the front line. Ensure that the changes are understood and owned throughout the organization or delivery chain – right down to the front line. Programmes which ensured frontline ownership of change were 71% more likely to succeed than those that did not.

• Align mindsets and behaviors. What kind of culture are you trying to build? Communicating this isn’t enough. Make sure you reinforce with the right measures and incentives and get your management team to proactively role model and reward the behaviors you want.

• Don’t get lost in the short term. Even if conditions demand a strong focus on near-term performance, find a way to emphasize investments to build new areas of capability, in order to provide the organization with a positive view of the future. Balancing positive and negative messages increased the chance of success by more than a third. Make sure senior management maintains long-term focus, rather than shifting to other initiatives.

Each of these factors is important on its own. In combination, they have the potential to radically improve the chances of success.