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Howard M. Guttman is a pricipal of Guttman Development Strategies.
New rules of engagement can help pharma companies to overcome the paralysis of creative conflict.
Few of today’s pharmaceutical executives would argue with the idea that their organizations are tough places to be. Besides coming to grips with digital-age decision making and asynchronous work patterns driven by the vagaries of time zones, flex scheduling, and telecommuting, they must make tough choices: speed versus flawless execution, creativity versus focus and discipline, siloism versus enterprise-wide application.
Take the need for creativity-a strategic priority in pharma. “In our business, we are looking to create discontinuity and out-of-the-box thinking,” says the senior vice-president of marketing for the consumer healthcare division of a major international pharma company. “Creative thinking is required, but it is asymmetric, involves exploration, debate, idea exchange, and often leads to conflict. While we struggle to innovate and come to the next big breakthrough, there is a need for healthy disagreement.”
Failure to manage such cross pressures has made many pharma companies breeding grounds for conflict. Using best- and worst-case industry examples, this article highlights how pharma companies can convert dysfunctional conflict into healthy confrontation and collaboration-and use both to create speed and business results.
The Solomon Solution
A large pharmaceutical company located in the Northeast sought to eat into its rival’s market share by launching a new product in the women’s health category. The time frame was tight, given anticipated competitive moves, but external competition paled compared with the internal cross pressures.
The vice-presidents of marketing and research both agreed that a new product launch was a must for future growth, but the question was, “Which product?” Each argued strenuously for a personal favorite, and they became increasingly intransigent.
The president listened to the raging debate at several board meetings until, in an effort to end the stalemate, he decided to play Solomon. He split the product launch resources in half, giving 50 percent of the advertising and promotion dollars to each product. His move quelled the conflict. But with insufficient resources, neither product could be brought to market ahead of the competition. The company lost market share and its franchise in women’s healthcare took years to rebuild.
Compare the way that team operated to the workings of a senior management team at a pharma company that was going through a complicated merger. Top management of one division realized that there would be great value in retaining the best practices from both companies. But there were strong differences of opinion about how best to run the merged business. And there were significant differences in corporate culture that had to be reconciled. Under pressure to get the new business moving quickly, the division president and his top team decided it was time for a team “alignment.”
Everyone on the Same Page
To operate at peak performance, a senior team needs to reach agreement, in four distinct areas. First, strategic goals and the key operational goals that flow from them must be clear, specific, and agreed upon. Second, the roles of the team members need to be carefully delineated. Third, protocols or ground rules must be established to guide group behavior. Finally, interpersonal relationships-the range of personal styles that members of the team adopt when interacting with one another-must be understood and managed.
It starts with strategy. Michael Carey, corporate vice-president of human resources for Johnson & Johnson, gives an example of how having clear strategic goals, from top to bottom, reduces the potential for in-fighting and competition among functions: “Ethicon is one of the cornerstone companies in our wound care franchise. Its base business is wound closure: sutures, stapling, adhesives. Wound care has declared that its goal is to become the innovation leader in its category. For the franchise’s strategy to succeed, the Ethicon team must be committed to the same goal.
“For example, R&D might suggest pursuing the me-too solution of using synthetic skin to close wounds. Marketing might respond with, ‘No, we need to be more innovative. We need to develop sutures and staples that cause less trauma as they pass through the skin, that produce less swelling and promote faster healing, less chance of infection, and fewer doctor visits.’ If the team is truly aligned around the goal of becoming an innovation leader, the choice should be an easy one.”
The division president of the merging company took a page from J&J’s book. He and his VPs first examined the merged company’s strategy and the goals that had been set for their division. Acting as a business team, they reached an agreement about priorities and how their decisions needed to support company strategy, thus ensuring there would be no “Solomon solutions” for their future product/market choices.
Roles and responsibilities. Next, team members addressed the issue of responsibilities: Who would be responsible for what, and when? In effect, the team determined who “owned” an issue, who needed to be involved in its resolution, and who had to be kept in the loop. The discussion proved crucial in eliminating potential turf wars and bottlenecks, especially on a team whose members came from organizations with different structures and reporting relationships.
Agreeing on protocols. The team members knew that, given the cultural divide, establishing mutually acceptable rules of engagement would be critical. Lack of alignment would open up a free-for-all when inevitable disagreements surfaced. To prevent that, the team moved immediately to outlaw “triangulation”-enlisting third-party rescuers to support one’s point of view.
For example, one vice-president had often found himself soliciting the president on behalf of fellow team members. “People weren’t being held accountable for resolving problems on their own,” he says, “which didn’t do them or the team any good. From then on, issues were confronted and resolved with no go betweens.”
Seeing yourself as others see you. Finally, the team carried the alignment process through to their business relationships and the way they would interact in the future. It was no touchy-feely exercise. Each member needed to become aware of how he or she was perceived-and how that image enhanced or thwarted team performance. They each had to describe their personal style, according to a continuum that stretched from nonassertive to assertive to aggressive. Each colleague then served as a reality test.
The vice-president of marketing learned a great deal during the exercise. “I was told I was impatient,” he says. “I had never seen my impatience as a problem. In fact, I felt that it was good because it was what drove me to succeed. But I realized that others didn’t understand why I was impatient. Now I stop to explain why something is important to me; communicating the reasons behind my sense of urgency has made my colleagues more responsive.”
Since its alignment, the divisional team has started moving faster. According to one team member, “Our decision making is quicker, more powerful. We have achieved incredible collaboration and speed to market. We’ve put seven new products into the market in the last six months.”
High Performance Everywhere
Even a perfectly aligned senior team that excels at managing conflict can’t deliver business results when the people they depend on are paralyzed with strife. Both cross-functional and functional teams must become high performers for an organization to be a strong competitive force.
Cross-functional teams. These groups are not typically composed of people who work side by side. Such diversity can be a double-edged sword. Cross-pollination is great, but putting sales and marketing and R&D and manufacturing on the same team can be tantamount to inviting the Hatfields and McCoys to a garden party.
But it doesn’t have to be that way. Howmedica Osteonics, Stryker’s largest division, is a medical device manufacturer specializing in orthopedic implants; it is one company in which cross-functional teams on several levels are becoming stars. When its business units formed a steering team made up of three executives, including senior vice-president Bradford Williams, Williams found the new arrangement challenging. He was accustomed to having the last word, and the move to collaborative decision making required that he make adjustments. Although the three co-leaders came from different functions, they occupied parallel niches on the organization chart, so they weren’t always clear about who should take the lead and when.
The confusion metastasized. On several occasions, when the steering team made an unpopular decision, the business managers who reported to them attempted to “divide and conquer” by going to one of the three to try to get the decision reversed.
In search of a solution, the steering team went through an alignment process. Simply defining their goals helped to eliminate attempts at triangulation. Once the steering team began relating its decisions to its goals as a team, the executives were able to present a united front to their direct reports. They also began communicating their vision and mission to the troops on a regular basis, which helped them understand the rationale behind the team’s decisions. It also minimized second guessing.
One aha! that resulted from the steering team’s clarification of goals and responsibilities was the realization that it was spending too much time on day-to-day operations and not enough on strategic issues. They upped the ante, making the business managers responsible for many of the operational issues they had been spending time on.
The next step was to put the business managers through an alignment, thus giving them the knowledge and skills to excel in the new environment. The managers began to work more interdependently to resolve issues among themselves rather than escalate them.
Things have speeded up significantly at Howmedica Osteonics. It now takes only 18–24 months-half the time it used to-to bring a new product to market, and in a market in which product lifecycles have dropped from 10 to five years that’s a worthy competitive edge.
Functional teams. Just because these groups are composed of people from the same function or department, conflict management here is no cakewalk. In all departments-sales, marketing, human resources, R&D, finance-intramural conflict can be as intense as on any cross-functional team.
Craig Mangean is director of human resources, field sales, for Sankyo Pharma. Mangean reports to Gregg Russo, vice-president of HR for Sankyo’s US operations. Joining Mangean on Russo’s functional team are the director of compensation and benefits, the associate director of HR for the clinical development group, and the manager of HR for corporate staff.
In the course of his career, Mangean had worked on high-performance teams, and he realized that one of the things holding the Sankyo group back was its culture of politeness-its inability to confront each other constructively. That politeness often led to dealing with conflict by going to someone else on the team and complaining. Members were uncomfortable with being candid and holding one another accountable, which is not at all unusual, given that people are often admonished from childhood on to avoid conflict.
As Mangean puts it, “We didn’t have any of the aggressive behavior that some teams show. But conflict can grow under the surface, like a cancer. You can’t treat it until you acknowledge that it exists.” He recommended that the team go through an alignment as a way of bringing the underlying issues to the surface so they could begin to address them.
Mangean has seen some dramatic changes since the alignment. “Once we were able to clarify our roles and responsibilities and the rules of engagement, and made sure that we were presenting a unified front to our team players, our team took a giant step forward. We are now modeling effective teamwork at the top, which in turn helps us in working together as a departmental team to meet our clients’ needs.”
By agreeing on protocols, the team has short-circuited team members’ attempts to play Lone Ranger. “In the past,” Mangean explains, “those responsible for making a decision might go off and conduct an analysis, then simply present their recommendation to the group. That isn’t teamwork, and it’s no longer how we operate. We now have a protocol that says, ‘If you are the key person assigned to a project that would have company wide or multicustomer implications, you must get input from the rest of the team.’
“People now share ideas freely. During meetings there is a good deal of inquiry: deep questioning, asking for additional information. People get into each other’s turf without a problem. They point out when someone seems to be stuck in their own little silo. We’re still polite, but no longer at the expense of the team’s performance.”
At Johnson & Johnson Germany, high-performance teams cascade down through the organization. When its president, Jean-Paul Rigaudeau, began the alignment process, the German unit was healthy and growing. But Rigaudeau believed his teams’ performance in a demanding environment could be improved by completing conflict-resolution training.
Rigaudeau began by getting his top team aligned, then moved to align the next tier: three cross-functional, product-focused teams representing skin care, baby products, and feminine sanitary protection. Those three “business champion teams,” in turn, focused on the next level down to repeat the alignment process. The process will continue through J&J Germany until all its business teams-cross-functional and functional as well-are on the road to high performance.
Learning New Tricks
It takes a great deal of skill-and courage-to look at oneself through the eyes of others. The self-assessment exercise described earlier is a good place to begin, but receiving feedback on one’s personal style isn’t for the weak of heart. Craig Mangean reports that for his team it was the most difficult part of the alignment process. “The word ‘torture’ comes to mind,” he says, “but the exercise was very revealing and got team members to begin opening up to one another.”
A gap often yawns between self-knowledge and behavior change. At another consumer healthcare company, one category manager made the leap from self-awareness to behavior change -and he is reaping the benefits. He describes his former self as a “one-trick pony,” a marketing manager who used his considerable powers of persuasion to push through his ideas and opinions. Not only did he not believe his aggressive style was a liability, he considered it an asset, the sign of a mover and shaker.
The manager began to see himself differently after his team went through an alignment. The feedback he received from his fellow team members was that he was aggressive, hard nosed, and more interested in talking than listening. He immediately began working with a personal coach, who helped him dial down his behavior to become less aggressive and more assertive. Now, six months later, his peers have told his coach that the executive has done a “180.” He listens and probes instead of lecturing, shows more of an interest in their opinions, and has taken on the role of coach. He attributes his turnaround to the cultivation of “active-listening skills,” especially decoding and feeding back the feelings behind his colleagues’ words.
A while ago, he was assigned to a team charged with replacing, with a single company, the two media-buying agencies used by consumer health and pharmaceuticals. The consumer health group had already decided which company it wanted to go with, but during the discussions the consumer healthcare executive noticed that his pharma-side peer was having trouble committing to that decision. “The old me would have said, ‘I know you don’t know which to choose, but I do, so follow my lead,’” he recalls. “Instead, I decided to hear him out. I said, ‘It seems you are really struggling with this decision. I sense you have some other issues besides cost.’”
This executive’s use of active listening encouraged his counterpart to talk about an issue he hadn’t shared with the team: His unit had recently come under intense pressure from two competitors. “All our product knowledge resides in our current agency,” the pharma peer explained, “and I’m afraid that switching to a new one at this point may undermine our ability to compete.” By the end of the meeting, the two managers decided not to use the same agency. But, observes the changed executive, “If I had continued to push without taking the time to probe, he might have accepted my decision while continuing to have unresolved issues.”
Giving and receiving feedback, adjusting personal style, and active listening are just a few of the skills in which both cross-functional and functional team members need to become proficient and move up to high performance.
But it’s important not to paper over poor team performance and dysfunctional conflict with a quick dose of training. Smart pharma companies will first align their goals, roles, protocols, and business relationships to resolve larger organizational issues. Then, they move on to developing individual conflict-management skills. But timing is everything. Folding the skill-building portion into the team alignment can risk team overload, but wait too long and the momentum fizzles.
The trek to high performance is a continuous one: team alignment, reassessment, skill development, reassessment, and back to alignment if need be. The time frame for the process depends on how rapidly a team can evolve. Typically, progress is immediate; within six to 12 months, expect dramatic performance improvement.
Dysfunctional conflict slows companies down and forces them to focus inward. A growing number of pharma companies are eliminating conflict and creating high-performance teams from top to bottom that are prepared to meet challenges and remain competitive in today’s tough environment.