David Marlow is Company Transformation lead at Bristol-Myers Squibb. He explained more about his role and the nature of transformation in conversation with Stuart Crainer.
Being responsible for the company’s global transformation management office is a big job.
It’s a very interesting role. I report to the Chairman and CEO of the company. He personally asked me to help with the development and execution of the overall plan. It’s motivating and a huge learning opportunity.
What are your foundation beliefs about how transformation works, or needs to work, in a global company like BMS?
The first thing to realize is that strategy on its own won’t transform an organization. The second element is culture. If you put strategy and culture together that will equal success. The culture element needs a similar weighting to the strategy element. People create and evolve the culture of an organization, its DNA. Strategy is the what and the people side of the equation is the how.
One thing I see people struggling with in organizations is the new normal of constant change. This is driven by the external environment where there is a huge amount of activity – think of the rise of political uncertainty, the growth of the digital economy and so on. Internally you can dial up or down the change component in terms of your specific needs, areas of focus and what you want to prioritize. But the point is that constant change is here to stay. So how do you equip the leaders and employees of the company to not only manage the change, but also to flourish in it? I think of this in a positive way as embracing change and how you drive an organization to be ready for any change. It is a matter of becoming a resilient organization, but also one characterized by agility, the ability to act very quickly depending on how these constant change issues come at you.
Another component is change fatigue. It is not so much the physical side of the equation – working 12 hours rather than ten hours today – it is the emotional component. All of these things have an impact on the emotional well-being of employees. I’m used to working a lot of hours, but sometimes I feel like a sponge under a leaking tap which is dripping constantly. You are continually absorbing negative energy from the rest of the organization as people complain that you are trying to achieve too much too soon, they can’t do it and so on. All this negative energy comes your way so you have to step back, not take it personally, and take the opportunity to metaphorically ring the sponge out.
This emotional component to transformation people sometimes under-estimate. It is very easy to make decisions from a strategic perspective about what you want to do, but execution is always very challenging and has an emotional component.
What are the other key elements of making transformation a reality rather than simply a strategy?
First, to drive successful strategy implementation it has to be leader led. There has to be a personal commitment from the CEO of the company. The whole management team at the most senior level of the company must have a personal commitment to make the transformation work.
Second, there needs to be clarity around where you are as an organization and where the organization needs to go and where it needs to grow. You have to be able to paint that picture and to articulate it consistently and appropriately to different levels – board level, senior management level and employee level.
Third, there has to be ruthless prioritization of the critical value drivers of what will be a multi-year programme. There has to be very tangible and specific objectives and accountability for who owns the value drivers.
You have to continually prioritize. There are always competing activities which are ongoing in any organization – the launch of new products, other initiatives in other parts of the company, different functions wanting to do things with a different view of what they want to prioritize. This requires you to look at the enterprise level, at the overall amount of activities that are going on, and do an initiative prioritization assessment once or twice a year. This makes sure you understand where the big value drivers are and that they are properly resourced and prioritized.
Fourth, communicate, communicate, and communicate. There are really tough parts of any transformation which you have to communicate. People, even at the leadership level, often don’t like to talk about the less positive side of the transformation. It is easy to say that you’re designing and creating a new organization, you’re building new capabilities and that is a very important part of driving value. It is much harder to communicate that, to fund the transformation you have to cut back on resources in other parts of the organization, and you are going to let go of some of your colleagues. Of course, this is hard, but if you want people to come with you on the transformation journey you need to communicate with them constantly
Any person can deal with certainty but it is when there is uncertainty that there is a challenge. That is the nature of the beast. If you don’t have certainty it creates a lot of churn. It is okay to say, ‘This is what we know today, but we don’t know this because we’re still working on it. As soon as we know, we’ll bring you into the loop and communicate in an open way.’ That sort of open communication goes a long way.
Related to this, for me personally there are couple of North Stars which I think are key to me being successful in this role. The first is to stay true to the original design principles. If you put a huge effort into creating a vision of where you want to go, you need to stay true to that. People tend to make compromises or to start minimizing some of the bold thinking. This can cause a huge amount of value leakage from the programme. You have to be very disciplined about sticking to the original design principles.
The second personal thing for me is to treat people with respect and dignity. In transformation programmes there is a financial component and a workforce reduction element. You have to treat people fairly and with respect, you need to take into consideration the personal circumstances of people.
These are things that as the leader of this transformation are always in the back of my mind.
The final thing is to always put your best talent on critical initiatives and make sure that you reward them accordingly, but more importantly make sure that they will have roles after the completion of the assignment. If you compromise on that you will get a sub-optimal outcome. People are often very reluctant to free up talent so leaders have to provide people with the motivation to get involved and to offer them future opportunities to learn and grow.
What have you learnt in this role?
First, there is never a perfect plan, there are always bumps in the road. It’s important to recognize that up front so that when the bumps arrive you have the right data and information to make an informed discussion around the topic and then conclude the best steps moving forward. At the same time you don’t want to stifle the original bold inspirational thinking.
The second thing goes back to leader-led change: the CEO of any company has to appreciate that their decisions are vital in achieving success. They need to live with their decisions and not to become frustrated if the organization doesn’t react as quickly or if different parts of the organization move at different speeds. Having said that, relentless focus and follow through is a must.
Is it easier to achieve transformation as an insider in the organization or does it require an external appointment?
When you are establishing the need for the programme, to establish and identify what the burning platform is, it is always useful to get an external perspective so that you can benchmark data or identify the latest trends in the industry and so on. Some of the big consulting firms, like BCG and McKinsey, have enormous databases and experience so it is useful to have some involvement from them in order to benchmark, to run ideation sessions and to understand what the programme could look like.
When it comes to implementation, it has to be a much more company-owned effort. Internal talent must be made available. You can always augment that with external resources – such as additional project managers or a communications specialist – if there is a very specific thing you want to implement which requires a subject matter expert which you don’t have in house
During the phase including the benchmarking, ideation and coming up with aspirational goals you have to make sure that there is a good database and information trail. Consultants come and go so you have to be very sure and clear on the documentation which serves as a base for your programme. Data can be your biggest enemy or your best friend. Good data enables informed decisions and clarity on accountability. But, if you don’t have good data people tend to hide behind it.
Is your finance background an advantage in this role?
I do have a finance background and have also been involved in mergers and acquisitions at my prior company. But I am not a traditional bean counter in that I have an enormous passion for people and culture. It is so important to have the right people and to be able to engage people. If you get the right team together – a diverse group of individuals who think very differently and who help each other – it is amazing what they can achieve.
When it comes to implementation it boils down to people – whether it is understanding their context, where are they in their careers or what motivates them. If you don’t crack the people code transformation programmes do not succeed or will deliver suboptimal results.
Are you fighting against human nature in that people will never really have an appetite for change, especially continuous change?
People don’t like change because it takes them out of their comfort zone. But, if there is a compelling business case for change people can rally behind it. For example, in our line of business we sometimes have huge patent cliffs. Overnight we can lose billions of annual revenue. There is huge unmet medical need for millions of patients across the globe. Up-investing in our R&D pipeline and speed to our patients require resource trade off choices. Those examples are very easy to explain to people.
It is much more difficult to start challenging a successful organization to have a continuous improvement mindset.
What stage is BMS in its transformation journey?
Let me separate that into the what and how. What covers what we want to do in the different parts of the organization and different parts of the organization are on different timelines their journey. In some areas you can achieve transformation very quickly. In others less so. When you are re-engineering entire processes, enabled by technology, in a global company these are multi-year marathons requiring different level of energy. You have to think about how you can engage people in a multi-year transformation.
A holistic transformation across the entire enterprise demands energy, focus and effort from the leadership in order to make sure the right outcome is achieved. And, if you don’t put some metrics and governance in place there is the danger that things will creep back and then in a few years time you will be back where you started
The how is more difficult because that gets into the people side of the equation. Do you have the right capabilities starting at the leadership level? Where are you with the culture of the organization? Where are you trying to take it? You are always trying to advance your people investing in them, so culture change is ongoing, always. And it’s important because it’s what gets you sustainable results. Being purposeful about culture, defining it and modeling it at the top is critical. They key, too, is rewarding people, in big and small ways, for working in new ways that drive the new culture, and making it something you experience everywhere, all the time. Culture is how you get even greater results. It’s not just the soft stuff, though many companies think of it that way. Culture is a critical component of strategic execution.
Finally, it is good practice to pause periodically and assess the initial vision for the transformation relative to actions taken and current trajectory, making course corrections as necessary.
This is an excerpt from Strategy@Work, a Brightline and Thinkers50 collaboration bringing together the very best thinking and insights in the field of strategy and beyond.
