Executing Strategic Success: Merck s Experience in Building Capability & Executing to Deliver Results

Transcription

1 Executing Strategic Success: Merck s Experience in Building Capability & Executing to Deliver Results Presented by: Donna S. Pearce, MS Executive Director Merck Corporate Strategy Office

2 Capabilities in Support of Merck Strategic Needs 1st Black Belt Wave Dick Clark Named as CEO & Change Exec. Methodology Launched Integrated Program Rollout Ken Frazier Named as CEO MPS (Merck Production Systems) Started Plan to Win Announced Merged with Schering- Plough Merck Sigma integrated into Corporate Strategy Office 2

3 Transformational Change Defined Intent driven; designed from the future (leap; innovate) Modifies behaviors, beliefs, and assumptions No right answer; many right answers Designed with a customer focus Different, unrecognizable, challenging A significant number of changes required across a large span of the organization Major disruption of people s expectations Planned from an outcome perspective Multiple interdependent components to integrate High shift to the politics of the organization A significant number of people will be unwilling or unable to complete the journey 3

4 The Case for Action Critical concern Weakening ROI Only about 30% reach full intent Symptoms Disasters Poor utilization Problem focus Human dynamics Problem location Implications Crucial issue is how, not what Recommendations Disciplined attention to human dynamics in execution 4

5 Major Organizational Change Option II. Major Change Option III. Major Change Option I. Minor Change 5

6 Adapting to change means recovering from a significant disruption in expectations 6

7 PERFORMANCE Proactively Managing Transitions Duration BASELINE PERFORMANCE Depth DISRUPTION TIME Even desirable change is resisted. Disruption must be planned for and managed. 7

8 Adapting to Change 8

9 Anticipated Current How Pain Drives Change Problem Opportunity Immediate discomfort The loss of a gain that is within our grasp Impending discomfort The loss of a gain that was possible to achieve 9

10 Installation vs. Realization Installation: Putting something new in place Installation occurs when projects are first introduced and deployed into a work setting Realization: Achieving the expected return on investment Realization occurs when the fundamental purpose for the change is achieved 10

11 Realization Mindset Minimum Acceptable Realization PRESENT STATE Solution Installation DESIRED STATE Realization Implement Time Sustain Installation Indicators Realization Indicators Full Realization 11

12 Key Roles in the Change Process CHANGE SPONSOR CHANGE AGENT Individual / group who has the power to authorize or legitimize the change Individual / group who facilitates the development and execution of implementation plans CHANGE TARGET CHANGE ADVOCATE Individual / group who must actually change Individual / group who wants to achieve a change but does not possess legitimization power 12

13 Strategy Execution: Integrating Intent, People & Delivery Strategy Execution Intent Clarifying, communicating, and maintaining the integrity of the end result People Shifting individual attitudes and behaviors to bring the solution to life Delivery Taking the necessary steps to deliver the intended value on time and within budget 13

14 The Case for Execution Discipline & Risks Management Type of Change # of Studies Median Success Rate Culture Change 3 19% Business Expansion 1 20% Software Development & Installation 6 26% Re-engineering & Process Design 7 30% Mergers & Acquisitions 9 33% TQM-Driven Change 5 37% Mixed Collection of Change Efforts 1 39% Technology Change 5 40% Restructuring 9 46% Strategy Deployment 3 58% 49 33% Smith, M.E. (2002). Success Rates for Different Types of Organizational Change. Performance Improvement 41 (1), pp

15 Intent Risks 15

16 People Risks 16

17 Delivery Risks 17

18 PREPARE Change Execution: Four Phases DECIDE DEFINE IMPLEMENT SUSTAIN Full realization of critically important endeavors requires disciplined execution of: Decide Clarifying what it will take and committing to the path ahead Define Implement Sustain Reframing, designing the solution, planning how we will get there by when & at what cost Achieving minimum acceptable realization; no turning back Achieving realization of intended business benefits 18

19 % Targets Impacted PREPARE Impact on Constituencies by Phase DECIDE DEFINE IMPLEMENT SUSTAIN Targets Local /Operational Sponsors Senior Sponsors Senior Team 19

20 Delivery People Intent Change Execution Risk Framework: Proactively Monitor & Mitigate Risks at Each Phase DECIDE DEFINE IMPLEMENT SUSTAIN Clarity Alignment Solution Enrollment Integrity Sponsorship Capacity Culture Resistance Synergy Oversight Portfolio Critical Path Resources Partnership Focus During Change Execution Phase High Medium Low Conner Partners All rights reserved. 20

21 Consulting vs. Tools 21

22 Lessons Learned Educate sponsors early their role is critical Define a portfolio of change aligned with strategy You can t do it all at once Build capability as you do the work Don t lead with methodology focus on business results & becoming a trusted advisor Use a fit for purpose approach not all change is transformational Don t underestimate the power of culture Creating a common language and tool set is worth the effort and cost 22

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24 Contact Information Donna S. Pearce O: C: