The goals of managing a change Essay Example

Wilkinson Sword Tetra fish food. Pfizer Animal Health is a leading provider of medications for pets and farm animals. With an annual investment of $4.5 billion in research and development (R), Pfizer Global R plays a vital role in developing over 130 potential new products. This effort is supported by partnerships with academia and industry formed by Pfizer. To effectively address drug breakthroughs, the CEO created seven "centers of excellence for drug breakthrough" (CEDD). In 2005, the merger at PFIZER utilized the concept of the "sigmoid curve" to embark on a new phase after the decline of the previous one.Both legacy companies had sufficient time, resources, and energy to navigate the second curve after the initial one faltered. The successful change management plan was driven by the combined experience and management capabilities of both companies. During this period of change, there was a focus on creativity and innovation to combat rising competition from generic pharmaceutical companies. Expired patents and a lack of new developments led the CEO to divide the R section into CEDDs, drawing inspiration from successful biotechnology firms. This planned transformation is a response to external factors and aims to address challenges faced by PFIZER. According to Ashburner et al.(1996: p.6), significant transformation is expected for D subdivision during PFIZER's post-integration period aligning with key factors of transformative change. This announced change has influenced departmental culture, altered interactions between operations and R&D, nurtured new leaders within each CEDD, and changed individual and team roles. Additionally, PFIZER's proactive management role in planning for transformation indicates their current post-consolidation phase following their merger as they function as an R center (Source: Fiscal Timess: April 2,

2001). The PESTEL analysis provides a detailed examination of the external environment during the merger process.The pharmaceutical industry prioritizes innovation and the development of products that improve human life. There is a growing need for increased investment in new technologies due to geopolitical, economic, environmental, and social factors. Regulations and measures have propelled the industry into a socio-politico-economic turning point, but it is uncertain whether these measures are driven by societal demand or by the industry's innovation of products with limited customer importance. While the relationship between the industry and political establishments has not always been positive, Pfizer Inc., for example, has effectively navigated political factors by providing excellent benefits and wages to its 115,000 employees and meeting their families' needs. Additionally, Pfizer acknowledges its responsibility to government through significant tax contributions in 2004.

Economically, the pharmaceutical industry plays a crucial role in supporting other sectors and is vital for both developed and developing countries. It also directly employs millions of people and indirectly affects tens of millions more, making its impact on society significant. Despite challenges faced by the industry, there is still hope for a brighter future as it continues to contribute to the well-being of all while playing a vital role in the economy.The pharmaceutical industry has transformed society by providing innovative healing and improving overall well-being, resulting in lifestyle and work changes. People seeking a healthier way of life highly appreciate the advanced health solutions offered by this industry. In addition to providing medications, the pharmaceutical industry demonstrates social responsibility. Pfizer, for example, aims to meet the constant global demand for high-quality medicines and healthcare products. Although diverse audiences exist in the

global market, longevity and improved health are universally desired. The pharmaceutical industry operates on a staggering scale with immense influence, facing challenges that are difficult to fully comprehend. It must continuously adapt to evolving technologies, which bring new investment burdens, uncertainties, and risks. Globally, approximately one million new products are created each week within this industry – making them among the most complex items manufactured at such large quantities. The manufacturing technology utilized by the industry represents cutting-edge scientific advancement, with potential for acquiring coordination skills, rational abilities, and emotional sensitivities through untapped electronic technologies. PFIZER utilizes the European Base for Quality Management (Excellence Model) to evaluate its performance (Simmons, 2003).This report utilizes the EFQM model, which has been widely adopted by companies in different industries as a benchmark for best practices in change management. It demonstrates how the relevant change has impacted the components of the model and forms the foundation for this change management audit report. The impact of the change on Pfizer's R&D department is considered a competitive advantage and can be visually represented with arrows within the EFQM model. This visual representation highlights how the change process influences leadership, people, resources, and actions, ultimately affecting customer outcomes and key performance indicators.

Throughout this change process, there has been pressure to adapt leadership styles in both CEDD and overall operations to foster increased creativity (Financial Times, 2005). Management changes were necessary to transition from despotic and task-oriented approaches towards democratic and people-oriented ones. Prior to these changes in CEDDs, scientists believed that the department had a "power" culture (Handy, 1999). However, restructuring the department into a grid-like format with multiple teams interacting resulted

in a shift towards a "task" culture (Handy, 1999). Unfortunately, this rapid succession of changes led to decreased employee motivation as employees experienced mergers between Galxo and Wellcome in 1995 followed by Pfizer's acquisition in 2005.Scientists in R at PFIZER reported that the mergers they experienced had a negative impact on their work, particularly with budgeting issues before, during, and after the mergers (Financial Times, 2003). After the announcement of the change to CEDDs (Financial Times, Oct 24, 2002), employee motivation levels significantly decreased. They felt like they were being treated as a sales department, resulting in increased competition among themselves (Financial Times, Oct 24, 2002).

The decline in employee motivation can be seen as the "Denial Stage" according to the Kubler-Ross Transition model. This model shows how staff members go through emotional states during a transition period from denial to acceptance within a short timeframe.

To accommodate the new CEDDs based R section at PFIZER, adjustments had to be made to all processes while considering potential knowledge management issues and budgeting requirements. These challenges within EFQM's enablers part created dissatisfaction among employees and customers, ultimately affecting communication within the organization.

PFIZER effectively managed this transition by using organizational development theories. The shift from one R&D section to seven independent CEDD teams required not only a structural change but also a cultural shift from role culture to task culture.Consequently, PFIZER faced the important challenge of changing the culture in its department to ensure smooth functioning of the CEDDs (Gibb, 1998). This transformation required a gradual approach due to the complexity and intangibility involved (Gibb, 1998). The model considered both external factors like market preferences and internal aspects such

as leadership, culture, and strategy (Gibb, 1998). Aligning the internal and external environments was emphasized as vital for gaining competitive advantage and delivering value for stakeholders (Chorn, 2004).

The impact of changes in strategy on culture, market orientation, strategy,and leadership style at PFIZER is demonstrated by Gibb (1998). To facilitate cultural change within the R&D department at PFIZER, education and contingency plans were implemented (Atkinson, 2005). However,the question remains: what should management prioritize to change a department's culture? Deciding which interventions will have the most impact is challenging within an organization where countless possibilities exist. Should it be strategy development or team-building? Empowering people or introducing tools and processes? Or perhaps restructuring?

To create cultural change at PFIZER,the company has adopted a four-step plan based on Lewin's force field analysis(1951) (Gibb, 1998). Firstly,it is crucial to understand the need for change in the R&D department. Secondly,a clear vision must be developed and shared for the organization's future direction.Responsibility for change is delegated to individuals, departments, and the overall company. A detailed action plan outlines necessary steps for implementing these changes. To ensure effective change implementation, Pfizer created a sense of urgency by dividing the R department into seven CEDDs. This pressure prevents other priorities from overshadowing this initiative and ensures true organizational behavior changes occur.

The decision to re-align and change Pfizer's R&D department into CEDDs was based on an analysis of the company's current position and competitive environment. During a specific period of time, the company faced difficulties in producing new breakthrough molecules and its innovation patents were expiring one after another, making it challenging to compete with generic manufacturers (Chemist, 2005).

Both management and staff need

to recognize the risks and opportunities they face, which often instigates a sense of urgency. To determine the issue and create a sense of urgency, the company conducted a stakeholder analysis. The company identified the core and secondary stakeholders involved in this change and grouped them together to develop strategies for each group. This classification of stakeholders helped the company successfully bring about the desired change.The diagram below illustrates the various stakeholders involved in the change process: [Diagram]. The diagram represents scientists and shareholders as the primary stakeholders, with a shared vision that creates a sense of urgency (Lewis, 1951). Establishing a clear and shared vision is crucial, similar to the second step in forced field analysis. If there is no clear and shared vision, change may start initially but eventually fade away because people do not understand their purpose (Atkinson, 2005).

It is the leader's responsibility to effectively communicate and demonstrate the vision to employees. PFIZER's CEO, Jean-Pierre Garnier, conveyed a message of fighting and innovation with practicality to the directors. However, they were unable to transmit this message effectively to the employees due to concerns about job security. In order to address this issue, PFIZER identified potential impacts on stakeholders and developed a strategy for managing these effects. A table summarizing stakeholders and their impacts was created.

Ensuring Department Capacity for Change:

Senior management at PFIZER believes that without sufficient capacity for change, both the department and employees will face disruption and frustration. Despite initial resistance, it was observed that people still desired change but lacked resources. Stakeholder attitudes towards change can be evaluated using Ruchelman's 'Prince' System (1985) scoring method.