Choose two case studies for change and two case studies for innovation. When you finish reading the case studies, there will be 2 questions on the bottom of this document which you will have to answer as a reflection response.
Change management 1
PERSPECTIVES Pfizer - changing the pharmaceutical business model
As the world's largest research-based pharmaceutical company, Pfizer specialises in medicinal drugs and produces five of the top mega-blockbuster drugs including Lipitor - the number one selling drug globally. The company is known for its groundbreaking work in the field of medicine and was the first company to mass produce citric acid and penicillin, the world's first antibiotic during the Second World War. Pfizer, established in 1849, is headquartered in New York with 81 900 employees worldwide, serving customers in 150 countries.
Pfizer has grown through mergers and acquisitions with companies such as Warner-Lambert and, during this process, has leveraged on their business knowledge and adapted their work culture to create a seamless transition with minimum hindrances. Similarly, when acquiring Pharmacia in 2003, Pfizer retained their site-based matrix organisational model while introducing some centralised functional reporting mechanisms. During its success period, the company, through significant investment, diversified into animal healthcare and became the largest animal health business globally.
But later, the size and structure of Pfizer emerged as an obstacle to quick strategic decision making and slowed its response rate to industry changes. Challenges like greater competition, expiry of patents, and requirement of greater time and money to invest in the development and production of new drugs, gradually revealed that the conventional pharmaceutical business models were not yielding the required returns. However, changing the entire business model seemed excessively traumatic to the company.
As an initial step in 2007, Pfizer's CEO, Jeff Kindler, announced streamlining operations, renovating product lines, creating five separate business units, increasing communications with customers and restructuring middle management positions. He said he wanted to 'change the focus, structure and culture' to reset Pfizer strategically and rationally for the future and make it the 'right size'. Since then the company has made a number of pivotal strategic decisions including outsourcing some of its production functions to focus on its core activities such as research and development. Pfizer also collaborated with other pharmaceutical companies and shared their expertise, which improved its R&D activities. Thereafter, the company introduced user-friendly internal data capture systems to allow automatic data collection and analysis, which saved time on data collection and analysis, leaving more time available for drug development. Furthermore, internal process reviews have been introduced based on the principles of ISO 9000 - the International Standard for quality management systems.
Pfizer also introduced changes to its HR department. Historically, it had focused on internally developing employee talent based on future needs. But, in recent years, as a part of its global employee recruitment and development strategy, the company began hiring people externally, based on competencies, rather than just job descriptions. Pfizer also implemented change management interventions including senior leader transition programs to facilitate the transfer of knowledge among employees and management, in order to effectively capture institutional knowledge. In recent years Pfizer has introduced the 'Pfizer Performance Scorecard' as part of a larger initiative to drive continuous improvement within its business units. The Performance Scorecard is a management framework that maps the activities of the organisation, including financial data, employees, customers and internal processes, to measure performance.
Over the years Pfizer has moved from a sales-based to a science-based culture. It promotes creativity and risk taking and has created an environment where employees are encouraged to be flexible in order to learn and discover. This culture of experimentation translated into accidental discoveries of wonder drugs including Viagra, which was originally designed to cure heart problems and failed. However, through the persistence of scientists, other benefits to the drug were discovered and it became one of the most successful commercially launched drugs ever.
Today there is great pressure on the company as patents for some of its most successful drugs are expiring with generic versions of those drugs anticipated to be available by 2010. Pfizer has invested billions of dollars into research and development of new drugs to combat this threat and the company is set to launch a series of high-potential new products by 2010.8
Change Management 2
CHANGE MANAGEMENT IN ACTION Sri Lankan cricket: clashes off the field
Bollywood came to cricket on 18 April 2008 when the Indian Premier League (IPL) was launched by the Board of Control for Cricket in India (BCCI) in the format of a Twenty20 competition. The IPL is this generation's version of World Series Cricket; an attempt to take a new and exciting form of cricket to a global audience with astonishing media coverage and a franchise business model duplicating European football. The IPL has generated enormous medium-term financial commitments from broadcasters, sponsors and team owners in the hopes that this version of the game will capture the imagination of cricket fans eager to see the world's biggest stars in action.
The IPL competition has signalled significant changes to the landscape of international cricket, and also to the operations of individual national cricket boards. There have been collisions between the IPL and numerous national boards over the potential to lose players during the traditional season, which would potentially reduce team quality and threaten the success of their programs.
In mid 2008 an announcement that the Sri Lankan team was to replace Zimbabwe to tour England in the following summer sparked resistance from players because of a direct clash with their commitments to the IPL in April-May 2009. The International Cricket Council weighed in by seeking an agreement from all Test nations that international cricket takes priority over club tournaments such as the IPL. Sri Lankan players stood to lose £1 million if they were only able to play 50 per cent of the IPL program. The players argued that their IPL contracts were signed long before the England tour was proposed. On the other hand, Sri Lanka Cricket (SLC) was concerned that it could not send a second-rate team to tour in England and compromise the series, not to mention its associated television rights and income.
By September 2008 the crisis had deepened, with the interim administration of SLC and several key players refusing to move from their respective positions. This forced an intervention from the Sri Lankan Sports Minister, GamiLokuge, who proposed compromise talks to reach a mutual agreement. He urged the SLC and ECB to find a solution that did not disturb the commitments of the IPL contracted players. In December 2008 it was confirmed that the Sri Lankan tour to England was cancelled, making it the first instance of the IPL taking priority over a Test series.
Inevitably, the IPL has led prominent cricketers to reconsider their playing priorities. Perhaps fearful of the potential for a repeat of the 1977 World Series Cricket crisis where players chose a breakaway competition over national contracts because of the financial incentives, national cricket boards became reluctant to ban players from participation in the IPL, even when scheduling clashes occur. Most national cricket boards announced that they would not ban any of their top players from participating in the IPL in 2009. However, it is clear that many cricket boards and the ICC remain concerned about the way in which the wealthy Indian board is trying to influence and control cricket.
Innovation 1
https://www.mckinsey.com/industries/high-tech/our-insights/disruptive-trends-that-will-transform-the-auto-industry
Read the above link and answer the assessment question on the bottom of this document.
Innovation 2
https://www.youtube.com/watch?v=YRCip1KDR18
This one is a video about Samsung. Listen to the video and answer the assessment question on the bottom of this document
Your 1,000-word Reflection-
- What are the key lessons that you have garnered during the 4 selected weeks and/or the perspectives that informed your views?
- How do these lessons and/or perspectives relate to, and connect with contemporary scholarly literature on change management and/or innovation - particularly with reference to the complex aspects of organisational transformation?
References using the HARVARD Referencing Style.