When new technologies and business models transform an industry it quickly comes down to single companies adapting to these new environments. A big part of how successful a corporate transformational effort will be, is the quality of leadership. We talked to a specialist in the area of corporate transformation about what exactly makes good leadership in a transformation process and why that is so crucially important 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:
Who needs to be involved in transformation processes?
Executive sponsorship is essential. If there’s no executive leadership buy-in, you can forget the whole thing. If that sponsorship is there, then management needs to work together to speak with one voice. If there’s no cooperation on executive level, successful transformation is not possible.
What role does the replacement / exchange of key personnel play?
Leadership and trust building skills are a must. If leadership isn’t right and doesn’t speak with one voice you need to make changes – immediately. This is what I would normally always recommend and do, however, in my recent case I chose a different approach. In the beginning of 2018 I made the conscious decision not to change key leadership positions except one - despite my desire to do so. The one key change I made, I did to send a clear signal to the company to say: We need to change now.
My reason for not making more changes early on was that I didn’t speak German sufficiently well to understand everything that was happening. The German pharma market was new to me and a couple of specific items including a planned move of the company to Frankfurt as part of the transformation process. This meant that I would risk business continuity, if I made more changes in key personnel. You need to have patience and accept that you will be in a suboptimal situation for a period of time. Good transformation leaders can thrive in this environment. In my case it meant I could take more time to put the right team together.
It’s not about changing everything. It is important to remember the legacy and what build the pride in a company. If you can locate the ambassadors of the “old” values – and if they are willing to adapt – they can be very powerful. Because you can’t credibly say that everything we used to do was wrong, simply because it is not credible and not true. Employees that are willing and able to adapt can become the driving force in driving culture change.
What mindset is needed in corporate transformation?
Curiosity. That’s before all other things. You need to be curious and keep your focus and not let you get distracted. Resilience and courage to implement the right and necessary decisions are also essential.
What has worked well for me is also the concept of the growth mindset. We use this to praise employees for their effort rather than only the outcome. This way you reinforce the culture of a learning organization. I believe this is an essential part of becoming a high performing learning organization.
What leadership tactics do you think contribute most to successful transformation?
To say: We’re all in the same boat. I moved my family to Germany to clearly say: I’m here for the duration, I dedicate myself to this journey. However, I listen to employees frequently asking them, “If this was your own company, what would you do?”
Also, transformation doesn’t happen within a couple of months. It takes two to three years minimum. Of course, we will see quick wins, but to achieve sustainable transformation it takes longer. It’s important to communicate this right from the beginning, and to communicate transparently that there will be frustration along the way. About three to six months after things start to change, not everything will go smoothly. If you as leader address this early on as someone who has done it before, it doesn’t come as a surprise. It’s important to say: We know there will be frustration but we’ll work with it. Let’s talk about it.
An example, we used to be a company with a lot of small offices. However, in order to embed a more dynamic culture, we decided to move and start over in a new location. So we moved. With the move we changed to an open plan office. I used to sit on the executive floor in an office with glass walls all around, today I sit in the open space with everyone else. I’m always available. And I really AM reachable. In any transformation sooner or later comes the question: “Why?” I want to be able to quickly answer that question.
Leadership in my opinion is more about being a conductor than a coach. A coach understands all roles in depth. Every role and has possibly played the role himself. A conductor knows the instruments and the people who play them and what needs to happen to ensure the best possible music. My role as a General Manager is to only add people to my team who are much better than me. If I’m the best at everything I don’t need any people. That’s not credible. You need to have the courage to say you want to bring your successor into the company. From my experience it’s extremely enriching to work with the best individuals, who support but also challenge each other constructively.
What’s the key factor that makes corporate transformation fail?
Lack of sponsorship from top management – when leadership isn’t aligned and focused, corporate transformation fails. You need to be able to focus. Because when you say that something is important next to 30 other things that are also important, that is not focusing. Be brave, prioritize what will impact the long term. That’s crucial.
You also need to tackle the unpleasant aspects of transformation as soon as possible. Generally, waiting will not make tough decisions easier or better. If it’s unpleasant, get it out of the way as fast as you have a solid base to decide on. You need to have the courage to make decisions. I always say that I need 60-70% of the information to make a decision. If that decision is wrong, then that’s too bad and we need to fix it. But we can’t wait until 99,9%. It’s better to make decisions and move on than to wonder for months whether it should be red, grey or blue.
I make a clear distinction between management and leadership. Management, according to me, is control-dominated. Of course, for certain things you need the appropriate control systems. But why do you control? What do you control? I’m convinced that in 2019 we work with qualified and well-educated employees. And because of that, I believe much more in handing over responsibility within a certain defined frame and empower people. It means that individuals can grow and develop. A company also has a responsibility that their employees keep their market value or develop it. If you just act within a certain controlled environment, you don’t develop.
Thanks Anders Fogstrup for another great interview! Have a look at part 1 and part 2 of the interview series as well.