change management pharma

What were the odds that the drug makers would roll the dice and have not only a financial mega hit but in Mergers & Acquisitions and Offshore-Production two “star is born “stories in a single show?

The whole world is moving to more connected and open innovation and Big Pharma keeps pace, despite the global financial crunch, world jobless charts, and a labor market at sixes and sevens. When unskilled youth, is one equation short of ever landing a job, and senior levels are “preparing for the future “as a survival mechanism, not a trivial pursuit, The Trickle-Up Theory of Education is cause for alarm.

Index:

What Is Change? What Is Change Management? What Is Organisational Change? Organisational Change in the Pharma Industry; What Is Transformational Change? What Went Wrong? Is There Something Special About Change Management In Pharma Industry? Current Issues in Pharma’s Change Management What is change?

Change is the business ability to reduce operating costs or gain competitive advantage in a highly competitive global scenario.

The competitive advantage is like “The “Red Queen Effect”: “do nothing and fall behind, or run hard to stay where you are.”(1)

What is change management?

Change Management is the exercise of planning and control over processes and people within an environment for a purpose.

What is organisational change?

Organisational Change affects people, systems, processes, climate, culture, business units, or the entire organisation. There are two types:

1- First-order, incremental, continuous, adaptive, small-scale, change for:

Adjustments in systems, processes, or structures, without major change in strategy, core values, or corporate identity. 2 - Second-order, discontinuous, disruptive large-scale change for:

Transformational or radical; transforms the nature of the organisation and its core (includes downsizing and M&A). Organisational change in the pharma industry

The end of exclusivity and very high-cost structures fueled the restructuring of operating strategies and business dynamics. Big Pharma entered in a large-scaled process of transformational change, involving M&A, offshore outsourcing, BioPartnering, and severe downsizing to secure competitive advantage and support innovation.

What is transformational change?

Transformational change is a major type of change and occurs when the organisation faces significant changes, such as unexpected competition, lack of revenue or other major shifts in organisational strategy.

This type of disruptive large-scale change implies changing the organisation’s mission, strategy, leadership, and organisational culture (how employees perceive management's beliefs and value systems)which is much harder to accomplish when compared with changing the organisational climate (how employees perceive the company's overall mission, vision, values, goals, and strategy).

What went wrong?

M&A gave birth to huge companies, later restructured and fragmented into smaller organisations, like Spin-Off companies, for instance.

Downsizing and Outsourcing are greatly responsible for an aging workforce that is far from being replaceable.

The Reengineering “trap,” is a known problem with this type of change when the goal is major restructuring, downsizing, and consolidation. Focusing on the short-term delivers “expensive long –terms.”

Is there something special about change management in pharma industry?

Change Control is a pharma-specific process to assure controlled and coordinated changes in products or systems.

As FDA states, “Change control is a complex process. Inadequate change control exposes a company to product liability actions, results in product recalls, causes internal confusion, and is a serious violation of the Quality System (QS) regulation” (2)

Current issues in pharma’s change management:

Big Pharma’s Transformational Change and a paradigm shift in the Health Care Industry (from "sickness care" to "wellness") raised some issues that need to be resolved.

M&A - it is crucial to anticipate and prepare strategies to deal with cultural integration. The Healthcare- Reform- competition depends on the company’s ability to meet the needs of cost-conscious and powerful customers in the most effective manner. Supply- Chain - stretching “from raw material to the end-user.” HR management –finding recruitment and retention strategies of Knowledge Workers in order to facilitate innovation/competitive advantage is not an easy task Sometimes, even well-crafted and planned change projects do not handover a spotless review report and the lessons learned from these projects do not gain widespread acceptance in the company.

(1) Metaphor devised by the American biologist Leigh Van Valen for his” evolutionary principle that regardless of how well a species adapts to its current environment, it must keep evolving to keep up with its competitors and enemies who are also evolving.” Thus, the “Red Queen” effect: “do nothing and fall behind, or run hard to stay where you are.”

Adapted from Lewis Carroll's “Through the Looking Glass” (the sequel to 'Alice in Wonderland') – “The Red Queen is the one who runs hard but never gets anywhere because everything else in the landscape is also running. As she tells Alice, “It takes all the running you can do to keep in place!””

(2) FDA, "Device Advice: Device Regulation and Guidance," Quality Systems Regulation section online at www.fda.gov.

change management pharma

When Change Management is about Big Pharma Disruptive Changes ….

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