The challenge
The new MD, Kate Simpson arrived at Merck in September 2018 to find a leadership team exhausted by a succession of short-lived MDs, weak performance and poor data systems to support decision-making. In addition, (and not surprisingly, given the above) there was a culture of low risk-taking, falling engagement and low trust. The staff at Merck ANZ felt weighed down by process – an overwhelming sense of ‘busyness’ where everything was urgent and yet not strategic. Even relationships suffered, as fiefdoms protected their own goals and difficult conversations were not had to build and develop capability. The Country Leadership Team (CLT) worked together in an operational way but without a shared strategic direction or commitment, or trust to give honest feedback or even give their opinion in many instances.
Kate and the CLT recognised that their number one priority was to shape a new purpose and vision for the business. This would be underpinned with improved financial and reporting systems to give sales visibility and enable data-based decision-making across the business. To support the team in improving the way they worked together, each member of the CLT took an individual leadership assessment Human Synergistics – Life Styles Inventory (LSI) and the team together ran a team assessment tool, Squadify, to better understand their own style and the way they worked together, and to develop a plan both individually and as a team.
The LSI profiles of the CLT were combined to provide a team view, which revealed a clear tendency towards passive/defensive leadership styles.This manifested itself in a preference to avoid conflict and even feedback in favour of just getting the job done. With a combination of competition between team members and a lack of focus on collective achievement, this team was not delivering to its potential, but focusing more on functional goals, and this was evident from the financials – the business was missing targets. The slightly stronger scores in the affiliative area indicate a team more focused on ‘being nice’ than on performance and honest, respectful feedback or coaching.
Seeing these results, the CLT recognised the need to work together to reimagine the business from top to bottom and to work on strengthening their collaboration so that they could operate as a true leadership team instead of a group of senior functional leaders.
The solution
Setting a clear purpose and direction
The CLT engaged in a two-day offsite in November 2018 to develop a purpose, vision and strategy for the business. The workshop was facilitated by Merck’s leadership development partners, LIW who brought a framework and processes to enable the CLT to improve the quality of their thinking and their collaboration. The CLT identified a clear purpose and vision for Merck ANZ and four key strategic pillars addressing performance excellence, innovation and product launches, customer experience, and business culture and employee engagement.
The most powerful driver of this new direction came from the purpose and vision the team defined for Merck ANZ: We make life better: we all proudly believe that our ground-breaking therapies will improve more than one quarter of a million lives by 2023. This statement galvanised the team to rediscover the passion they had when they joined the business and recognise the value that Merck brings to people in ANZ. One particular exercise during the offsite had a powerful impact on the team – they worked in small teams on a construction task with limited information. When frustrations were running high and there was a temptation to give up, the facilitators revealed that the item they were building was a prosthetic hand for land mine victims in Cambodia. This clear purpose reinvigorated the team to finish the build and see the benefit of their collaborative work.
Following the workshop, the CLT shared the new vision with their teams and committed to a series of projects to implement the new strategies. First among these was a project to upgrade reporting systems to enable teams to get visibility of business performance. In addition, skill-specific training was identified and kicked off to upgrade capability in financial understanding and decision-making; sales; coaching and feedback skills; and enabling successful work-life flexibility in a performance culture.
The third priority was to develop a process to identify talent and initiate conversations about succession. The outcome would be to build robust and meaningful development plans and create a culture of coaching-driven development discussions within the business.
With this clear statement of direction, each CLT member aligned their own objectives to the plan to make the strategic priorities real for themselves and their team. They also committed to ‘walk the talk’ in terms of focusing on these strategic priorities, to replace the culture of ‘busyness’, with a more deliberate culture of experimentation; trying new things without the fear of making mistakes, as well as prioritising to get the right things done in the right way. The team has developed dashboards to track their own key performance metrics and to provide the data and insights for robust performance discussions with teams.
Once the CLT had their strategic objectives set they started the cascade of these plans by getting all employees to set their own 2019 objectives in line with the strategic objectives of the business. The intention was to help all staff see how their role contributed to the achievement of the Merck ANZ vision
Cultural transformation
The second phase of the program was to underpin the new strategic direction of the business with a refreshed culture focused on people and performance – enabling all staff to feel inspired, challenged, and supported in order to deliver strong business performance and improved patient outcomes.
In late 2018, the CLT introduced monthly Country Performance Reviews to provide a forum for marketing, sales, and medical managers to discuss all parts of the business with the Business Unit Directors – to challenge and support across functions and share best practice. This genuine curiosity has led to more interesting discussions among the team and new ideas to grow the business.
In January 2019, Kate created a new CLT role of Commercial Excellence Director with the specific tasks of establishing the tools for performance visibility and developing the governance of performance discussions. This involved building excellence in skills and technology through the sales and marketing teams and KPIs for all roles and levels in the business. Improved data visibility enabled these KPIs to be developed with transparency around the business assumptions which drove them. This appointment was an important part of the CLT’s drive to build a performance culture in Merck ANZ.
"There is a real solutions focus now among the CLT – we work together to identify and address pain points, to try new things and to get the business moving forward."
Our approach to this engagement was underpinned by LIW’s 3Cs methodology, the Conditions for Success: Clarity, Climate and Competence.
In this framework, teams are able to recognise the importance of creating clarity first – strategic and operational – then develop a culture of collaboration and trust in order to deliver results through the development of competence, accountability and disciplined execution.
In Q2 2019 the CLT undertook their first team health and effectiveness assessment tool, Squadify, to assess the conditions in the team. This, together with their individual leadership assessments, provided a baseline for them to create individual and team development plans. As a team, they focused on active listening to truly understand each others’ perspectives and to have deeper discussions on the important strategic issues facing the business.
These assessments have given the team a common language to discuss concerns, an effective decision-making process, and an openness to address uncomfortable topics with the genuine shared intention to improve performance and strengthen relationships.
The new team performance mindset is anchored in accountability. Historically, the senior team tended to have a victim mindset and inappropriate or unsupportive behaviour was tolerated as long as results were delivered. Now there is a clear values alignment so that poor behaviours are called out, and clear expectations are set among the senior leadership team and throughout the business
What does this mean? these are the scores for the Conditions for Success in your squad. the inner ring (grey) shows the importance score and the outer ring (coloured) shows the presence score ie, how present the condition is now.
During this cultural transformation work the business consolidated two offices into one location with activity-based working. This change has supported the new collaborative culture, enabling greater mixing of staff across functions and levels of seniority, and was reinforced by improved structure around Merck’s strong Work-Life Flexibility focus. The CLT is sure this cultural change in working would not have occurred without the shift in performance culture and training of employees and managers on conversations that relate performance to work-life flexibility.
The CLT has made deliberate efforts to present a profile now with the rest of the business, as a team, not just as expert individuals. They are demonstrating that the strategic direction, priorities and culture are set by the CLT and not by the managing director alone and provides a context in which all employees can participate. The CLT also shares a WhatApp group to connect more socially and personally which builds personal connections and trust. To boost broader communications the CLT launched monthly Town Hall meetings and coffee round tables chaired and run by a rotation of CLT members. These events provide a forum to listen to employee ideas and concerns and to share their progress on the strategy throughout the organisation.
CLT Squadify scores tell the story of the CLT transformation
From Q2 2019 to Q1 2020 the CLT used the Squadify tool four times to help them to identify areas of strength and development.
The CLT Squadify scores show an interesting pattern of decline and growth which overall shows good improvement, but also demonstrates the reality that culture change takes time to embed in an organisation. At the start of this process, the baseline scores were at or below average for a comparable team and there were clear areas for improvement in direction, trust, collaboration and engagement. The second Squadify scores reflect the success of the first direction setting exercise which improved Clarity for the CLT and the organisation. However, in this time, the Climate (primarily culture and processes) declined slightly. This may in part reflect a recognition by the team that their conditions may have been worse than they originally thought, or that they have a new measure against which to judge themselves. With a change of purpose and direction comes uncertainty and specifically, the function vs CLT tension was exposed as members had to give up individual objectives in order to deliver against the business goal. Competence scores too fell at this time, particularly in the team’s willingness to actively participate and listen to each other.
But consistent behaviours that demonstrate a commitment to a new culture pay off and the two subsequent Squadify scores show consistent improvement across the board. A particularly positive change is the improvement in Climate since July. This reflects the deepening relationships across the team, resulting in greater trust and a willingness to challenge and drive each other to be better. It also represents the improved data systems which have enabled the team to define processes for effective decision making.
The improvements in Competence are most obvious in improved listening and curiosity. Also, in a greater willingness to talk straight and give honest and practical feedback. Coaching is also improving but this remains an area for further attention. The Clarity scores have further strengthened and are well above average now. The greatest improvement was in setting clear measures of success and creating a clear plan to achieve the team goals. Furthermore, there is a welcome bounce-back of the rating of a ‘belief in what we are trying to achieve’ which reflects the re-envisioned purpose and strategy for the business.
Bringing the organisation on board: Own the vision
Whilst the Vision and 2019 strategic priorities had been core to the 2019 employee communication, and the Purpose ‘We Make Life Better’ had resonated with employees, the final step in the transformation for Merck ANZ was to build the 2020 steps of the business vision and strategies with the broader employee group and to build engagement through accountability. There was a focused intent to remove the historical victim mindset which lived below the surface of the organisation, and to build personal accountability among all staff for delivering the strategy and the culture transformation.
Results from the Company engagement survey revealed that while the rest of the business could observe the top team transformation, they had not yet gone on the journey themselves and needed to be engaged in the transformation personally. The CLT recognised that whilst all employees had aligned their personal objectives with the strategic imperatives of the business back in 2019, more work needed to be done to help staff feel fully aligned in their 2020 objectives. In February 2020 the whole business attended a two-day Sales Conference where the CLT shared the 2020 strategic priorities based on the vision already communicated in 2019. All staff were invited to contribute to the business strategy and to engage with the CLT in discussing the opportunities for Merck ANZ.
The CLT recognised a different tone to the sales conference this year, with greater participation and everyone feeling like they had a voice. In particular, there were more cross-functional conversations, breaking down barriers between functional silos. One CLT member observed that they could no longer hear the ‘hum of discontent’ but instead a renewed energy for the ‘One Team, One Goal’ message.
To support the accountability of all employees to ‘Own the vision’ of Merck ANZ, three pillars of behaviour were identified to deliver the business performance:
Since the 2020 offsite there is a greater buy-in from employees to connect with the strategy and to align their individual objectives with team and business goals more meaningfully. The staff recognise their role in delivering the results and the culture transformation.
The Impact
The results have been dramatic and positive – both financial results and engagement scores have improved and the CLT report much greater satisfaction, happiness at work and a belief in the purpose of their role.
- Merck ANZ delivered 113% against budget in 2019
- Engagement decline turned around and increased 11% since 2018
- Squadify results improved 11%
- Alignment is dramatically improved within the CLT (Squadify range is reduced by 56%)
The global business crisis caused by the Covid-19 pandemic has introduced new challenges to business leaders, in particular to provide clear direction and reassurance to staff working in changed and difficult circumstance. The latest engagement scores from 2020 reflect the impact of the dramatic cultural transformation with Merck ANZ scoring significantly above Merck benchmarks.
- ‘I have confidence in the senior leadership team to make the right decisions for Merck in this time’, ANZ scored 97% compared to 87% globally.
- Furthermore, 94% of Merck ANZ employees respondpositively to the statement ‘I would recommend Merck as a great place to work’ compared to just 77% one year ago.
Next Steps
Reflecting on the transformation the business has been through since he appointment just 18 months ago, Kate Simpson Managing Director of Merck ANZ remarked:
In May 2020, the CLT decided, based on their own positive experience, to adopt Squadify across the business and for all Business Units and functions to use this tool regularly to support their development. This use of Squadify will support teams to ‘own the vision’ and be accountable for delivering against the strategic objectives of the business.
Kate and the CLT are planning the next company off-site in August 2020 where the CLT will identify projects to lead with teams from across all functions and levels within the business to further drive collaboration and accountability. They will also take the opportunity to re-envision the future for Merck ANZ post-Covid-19, in ‘the new normal’. They will consider what changes the business will implement to harness the positive changes that have emerged in these months which could enable them to support customers and patients better as they return to clinics and hospitals.
The CLT and the business are committed to making life better by putting patients at the heart of everything they do to provide access to the right medicines at the right time and the right price.
"Our cultural transformation through the last 18 months to a strong performance culture rewarding output over input has enabled us to respond quickly and effectively to the new state of play." - Kate Simpson, Managing Director