Pharma Global (PG), a division of a major pharmaceutical company, embarked on a significant organizational transformation in 2020. This initiative aimed to reshape decision-making processes, streamline its hierarchical structure, and empower employees. The company faced common pitfalls during this high-stakes change, yet its leadership identified essential strategies to navigate uncertainty effectively.
Understanding the Transformation Journey
The atmosphere was tense as PG’s executive team gathered in Frankfurt for their annual strategic planning retreat. For two years, they had deliberated on a transformation plan, yet implementation had not commenced. During a coffee break, Gerrick, head of PG, posed a pivotal question to his colleague Giorgio: “What if we simply proceed with the transformation? What are the potential outcomes?” This inquiry shifted the discussion, encouraging the team to confront a common dilemma faced by executives: how to venture into the unknown without concrete data or guaranteed success.
PG was at a critical juncture. By the 2010s, the company had expanded its research and development pipeline following a major acquisition, complicating its commercial operations. The existing top-down culture and bureaucratic processes hindered the agility necessary for this new business model. Despite recommendations from two leading consulting firms advocating for a substantial reorganization to enhance responsiveness, the executive team hesitated, seeking more data and risk assessments.
This cautious approach stemmed from a misunderstanding of the nature of their challenge. Traditional organizational changes are often technical, with clear solutions, whereas PG’s situation was an adaptive problem requiring innovative solutions from within the organization. Lacking direct benchmarks in the industry, PG would need to pioneer this transformation.
To break free from this analysis paralysis, the leadership reframed their perspective. Instead of demanding proof of change’s necessity, they asked, “Why shouldn’t we change?” This subtle shift in questioning recognized that the real risk lay in maintaining the status quo. With this new mindset, the executive team aligned around a bold objective: to flatten PG’s organizational design, positioning the company as a leader in purpose-driven, empowered work practices.
Key Lessons Learned
A significant lesson derived from PG’s experience was the danger of overthinking major organizational shifts. The executive team recognized the need to ask critical questions: Are we dealing with a technical problem or an adaptive challenge? Are we focused on mitigating risks or avoiding uncertainty? What are the costs of inaction compared to the potential benefits of being pioneers in this transformation?
Another hurdle encountered was the desire for a detailed, comprehensive plan. Previous initiatives had relied on rigid roadmaps with clearly defined roles. However, the complexity of this transformation demanded a more flexible, iterative approach. The leadership team realized that a strict plan could impede innovation and adaptability. Instead of striving for perfection upfront, they set a clear overall direction, empowering teams to experiment and learn throughout the process.
Fostering a culture of ownership was equally essential. PG’s transformation encompassed not only structural changes but also shifts in collaboration and work practices. The leadership invested in employee engagement, soliciting feedback, and ensuring transparent communication about the transformation’s progress. By involving employees at all levels, the executive team created a shared vision, encouraging investment in the process.
As a result of these efforts, PG successfully flattened its organizational structure, enabling faster decision-making and enhancing its ability to innovate. The transformation led to a more engaged workforce, demonstrating that embracing uncertainty and empowering employees can yield significant rewards.
PG’s journey offers valuable insights for organizations navigating similar transformations. By learning from missteps and focusing on key elements of effective change, companies can achieve remarkable turnarounds, positioning themselves as agile and competitive in a challenging market landscape.
