Reference no: EM133109006
Globally Distributed Pharmaceutical Procurement
Guiding teams to work effectively in large, complex global organizations can be daunting. This case study provides an overview of a performance challenge in pharmaceutical firm headquartered in China with operations in the United States and Europe. There were two teams that were part of the procurement function which was undergoing change. Both teams reported to a manager, who was based in New York City. The one team was located in New York City, and the other European team was based in Brussels, Belgium. The European team was led by a different on-site manager. When the New York-based manager joined the firm, she decided to centralize these two teams and, based on customer feedback in proximity to the client, she decided that the European team would report to the U.S. team. The European team, who for many years had had global direct contact with her internal client and was moving from being customer service oriented consultants to transactional "order takers." The U.S.-based team was moving to become more consultative and would provide direction to the European team.
Early in the transition, the European team was strongly resisting the change. After 2 months, the New York-based manager decided to reach out to an external performance consultant to help get the teams aligned, to get through the transition, and to become fully productive. The performance consultant began by trying to fully understand the goals and desired outcomes of the changes that were initiated, as well as the impact on business outcomes. She approached the performance analysis phase by collecting data from several sources using multiple methods. She didn't want to rely solely on the New York-based manager as the source of information and insight about the situation - although that manager freely shared her opinions and frustrations. To cast a wider net, the performance consultant also interviewed members of both teams, the manager of the European team, and the internal customers. She also reviewed reports that detailed productivity metrics, customer satisfaction scores, work backlogs, and other performance measurements. Additionally, a survey was conducted of all members of both teams to gain their feedback. This and other data collected became the basis of the interventions created and implemented to help with this change effort.
Through the performance analysis effort, several themes and root causes began to emerge. The European team was clearly resisting the change. They were unclear why they were being asked to change, felt like they were losing client access, and they felt that the expertise they had developed was being grossly underutilized. In large part, the European team was conducting their work as they always had Josh calling your customers, interacting with them, and continue to perform as they had in their rules previously. In fact, when asked why they were not doing the new task they were being asked to do now, the highly seasoned and experienced team members became belligerent, even questioning the authority of the New York-based manager and demonstrating their passive-aggressive behaviors. The New York-based manager and the U.S.- based team found a very challenging to deal with the European team, in the managers struggle to build strong relationships with them. Some European team members even expressed angry sentiments directly to them.
From the analysis, the performance consultant learned that a great deal of duplicative work was being done, and the productivity of the team had dropped, moral was plummeting, and feedback from the internal client (those who needed to work through the team to purchase products and services) was negative due to confusion, delay, and negative attitudes. Further, the European-based manager, the leader of the Brussels team, appear to have little or no influence or authority over her own team and was largely ineffective. The New York-based manager found herself making frequent trips to Brussels to try to deal with the situation directly.
In addition to the performance consultant, two internal HR professionals were involved. They helped to navigate the performance management conversations, issues of insubordinate, performance improvement plans, and other HR issues. In addition, administrative assistant played in important role with scheduling, logistics, tactical support.
After gaining a clear understanding of the issues and root causes, the intervention began to emerge, starting with the 2-day off-site meeting held in Brussels in which both teams participated. The off-site meeting was designed to focus on clarifying the original vision of the team and organizational benefits. It included restating the expectations of the team and servicing resistance issues and addressing them head-on. Embedded with several opportunities to build relationships and solidify the rule of the European manager by having her play a key leadership role during the meeting. The 2-day intervention was painful and slow at times as the performance consultant guided the group through the process. By the end, there was at least an acknowledgement of the need to change an agreement, although still grudging, to perform the role as articulated in the New York-based manager's vision. In order for the European team to feel more empowered, the New York-based manager was careful to acknowledge that their skills and capabilities are not being fully utilized. Also, they would have the opportunity to post for other rules that were more aligned to their skills if they choose not to stay in their newly defined rules.
The performance consultant also recommended a local executive coach to work with the Europe-based manager. When she joined the team, she had established herself as a peer and friend rather than their manager. The team liked her but did not see her as an authority figure. This left her unable to set direction for the team and get them to move towards their newly defined rules. The team would argue with her, and she was unable to inspire them to change. The local coach helped her to improve her effectiveness as a leader of the team over the next 6 months.
Similar work was done with the U.S.-based team to help them understand their new role and what was expected of them. While this team welcome the change, Manny did not have the basic consultative skills or management skills they needed in order to operate effectively. Therefore, an extensive up-skilling program was instituted to build the new skills that are needed. Another intervention that emerged unexpectedly was the one of the European team members announce his decision to retire rather than assume the new role. The fast-thinking performance consultant approached a U.S.-based manager with a proposal to ask him to extend his retirement by 6 months and during this time take on a peer coaching role focussed on developing the U.S. team members. He agreed with this and actually became more motivated than he had been in years. He saw that this new role as a way to leave his legacy and exit the organization with a great deal of pride, respect, and credibility. The arrangement was highly motivating to him an extremely helpful to the U.S. team members he was developing.
Over time, the metrics began to trend in a more positive direction. Some of the outcome that were seen including higher client satisfaction, and team alignment and improved morale. Productivity was gained through shorter cycle times. Importantly, lower prices on purchased products were realized and faster delivery times were achieved. The two previously divided teams that had operated as separate entities became one unified team.
The performance consultant as well as the client learned a number of valuable lessons through this experience. First and foremost, culture matters. The performance consultant recognized a big difference culture makes in how people see authority. Also, the way in which people respond to change very widely, and sometimes this is based on culture. Respect is a critical commodity for leaders to have, but it must be earned. Being open and flexible when emerging solutions arise along the way what is another important lesson learned. Finally, sometimes it takes an unbiassed third-party to bring clarity to the issues in dynamics and identify and work toward a viable solution.
Questions:
What is the exact nature of the problem or performance improvement opportunity?
What is the cause of the problem - and how was that information obtained?