When it’s time to start a transformation process in a company (which nowadays is pretty much anytime), you need the right expertise in place to answer the essential questions at the right time and to manage the process from within. We talked to one of these experts about the various aspects of transformation processes and the result is this very interesting interview you can find below. Our counterpart in this insightful talk was Anders Fogstrup who is currently leading Mundipharma Germany. The company is part of a global network of privately-owned independent associated companies and operates in over 120 countries worldwide. The company is focused on developing business partnerships to identify and accelerate meaningful technology across an increasingly diverse portfolio of therapy areas including respiratory, oncology, pain and biosimilars. By working in partnership with all stakeholders, the Mundipharma network develops therapies that create value for patients, payers and wider healthcare systems – to move medicine forward.
He describes himself as a generalist with a passion for leadership. He sees himself more as a conductor than a coach and his main focus is credibility and delivering results. Here are his thoughts on leadership and transformation:
What is typically the origin why transformation needs to happen?
Many events can be triggers. In my experience the entry of a new CEO is often a trigger. Also, of course competitive forces or other disruptions can trigger fundamental change in a company or industry. A burning platform and a credible ‘case for change’ is helpful. To build and communicate a credible transformation story you need a “why”. What’s the reason for change? If you don’t have a credible why and a clear future vision, then it’s very difficult to explain why we need to change and where we need to go.
That’s where you get to the first dimension in our transformation model: what is our clear direction and focus ? You need to work hard on the purpose, on the “why” and need solid numbers to support your arguments. In our case, the main business area no longer could sustain our footprint and we needed to adapt our model. That’s the burning platform.
To me, transformation is not incremental change but a fundamental change. I always make the distinction between restructure and transformation. Restructure and/or resizing is unpleasant, but necessary. If there’s less money coming in, you will need to adapt the operating expenses accordingly to have a sustainable future.
How do you plan transformation?
Overall, we plan transformation using the 4 dimensions (clear direction, a new mindset, organizational effectiveness, right leadership), this helps us focus. Personally, I always build a detailed action plan in order to inform my initial diagnosis period. With this, I know what to look for with my fresh eyes and which questions to ask. What’s important, what’s not and what do we need to understand better? I try to listen a lot. We often discuss the first 100 days. I try to make my diagnosis within 60 days and use the rest of the time to assemble the transformation plan with key themes and workstreams. Often I’d like to start implementing change before the 100 days are over, but it’s important to take the time to carefully work out the plan that clearly marks out the “why, how and what”. Where do we come from? Where do we need to be after the transformation? How do we get there? What are the obstacles - and importantly why?
A good transformation plan should be structured and adaptable. Not everything you’re aiming for is tangible. For example how do you assess that culture has changed? When has that successfully happened? You need examples to exemplify behaviours and patterns. Often it’s useless to write values on a wall. Important is how employees and leaders behave. That’s best visible in examples. Examples of how to do it and also examples of how not to do it. There you can see the change in culture reflected.
One essential point is the timing of a transformation. Timely transformation means you initiate the diagnosis and implement the tough decisions in time. If you start transformation too late you have already lost control. This requires that, when everything is going well, your obligation as a leader is to reflect on - what’s the next thing that can challenge us and how well are we positioned to deal with it? This is difficult to do when everything is going well - it’s so easy to get comfortable. In my opinion good leaders always ask the tough questions themselves before they are forced to answer them by others. Timeliness is very important.
What are the biggest challenges in the process?
To keep the focus on what is important longterm, while delivering results short term, and align leadership to speak with one voice, consistently. Keeping the focus means to know: What do we need to stop doing and what do we need to start doing? And to be super-critical with the things you want to keep on doing. Because what you do today may be comfortable, but it may not be the right thing going forward. The really difficult is to provide employees comfort, when they have achieved great results, got promoted, rewarded through the old behaviours. You need to keep that in mind when you say: We’re going to stop doing that.
Employees need to know what their part in the transformation is. Every employee needs to ask him/herself: What’s my role in this transformation? If I manage to make things tangible for my employees then they’ll be able to answer that question and buy into the journey. If you initiate transformation in a timely manner, leadership clearly sponsor the transformation, I am confident it will translate into the company’s growth rate. But when things are off and the company does worse, people quickly get frightened and wonder: What’s my role? Is there still a place for me in this company? I need to evolve, but how? What does all this mean? The strategy and the future vision need to be transparent and clear, the purpose and end result need to be tangible, so everybody knows their role.
How do you assess the success of corporate transformation?
It depends on what type of company you are as well as your timeline. If you’re a listed company you need to show very rapid increased profitability. A private company can take a bit longer. However, I see two key dimensions for both scenarios: 1) Build a clear plan for sustained growth and profitability short and longer term, this may involve a resizing effort. Pick your key KPIs and track them. 2) You need to build the longer term WHY and HOW, and support this with your transformation plan.
What structures are most important in transformation processes?
Again right leadership is the most important – leadership in and of teams but also self-leadership. I need people that want to get in there and get their hands dirty. I do that too. I want to understand the company and I can’t do that just sitting at a nice desk and saying: do this, that and that. No. I’m an ambassador of transformation. My actions will be taken as the first example. I started at Mundipharma Germany in January 2018 and in February we had an all staff meeting . I spoke German in front of everybody. I told everyone that between 7am and 7pm I would be speaking German. To be honest, my German was really not good in the beginning. But this way I also was an example for the transformation into a learning organisation.
I also believe it’s important to bring in external expertise. A company that has successfully worked in stable surroundings for many years doesn’t have the competence to change in a short period of time. For example: A part of our transformation is upgrading our underlying technology platform. To deliver on this priority, we enlisted solid external resources to run our program office. If the delivery of such a complex IT transformation isn’t top notch, you’ll soon face a catastrophe. So key message, invest sufficiently where you must – both money and time.
We want to be a high performing learning organization. It means that we as Leadership have an obligation to set the frame for employees, however, the content within the frame, we fill in together with our employees. We wish to empower our employees to take on responsibility. If you take on responsibility within the defined frame you’re highly empowered to make the right decisions. One of my key learnings is: Not everybody likes that. A significant proportion of employees just want to work. “Tell me what you want and I’ll do it.” I don’t really need that. I need employees that want to grow as individuals, take on responsibility, make decisions and enjoy the learning.
And last but not least: clarity on expectations. Goals for every employee. I, as an employee, need to understand what needs to happen and what good looks like. What is expected of me within my role? Then I know, if sales go up or down, when I deliver against my objectives, I have done well and shaped my part. That’s important for every single employee. A key component not to underestimate in this regard is timely feedback. Feedback is not dangerous as long as it is given and received with the right mindset – to learn and improve. We try to work a lot with feedback. And feedback isn’t just to say: That’s wrong. That’s not feedback. Feedback needs to be constructive, timely and frequent. We’re going to introduce a process this year that contains structured feedback at least four times a year. Because when you set goals at the end of the year for the following year and then follow up only a year later, that’s nonsense. The process of discussing progress documented by examples is important.
Thanks Anders Fogstrup for another great interview! Stay tuned for Part 3 of the interview series coming soon.