By Paul Thomas, Senior Editor
Up to 70% of corporate change initiatives fail, notes Bill Wilder, director of the Life Cycle Institute, the training arm of Life Cycle Engineering (LCE). Oftentimes, it is because pharmaceutical and other manufacturers focus on products and processes, but not on people. Contrary to popular opinion, people generally don’t resist change, says Wilder. “They resist being changed when they don't know why.”
In this interview, Wilder shares insights into how drug manufacturers can better manage change and strengthen their organizations from within. (For an audio podcast of the interview, listen here.)
P.T.: You're an expert in change management. Let me give you a general question right off the bat: Where do companies most often go wrong in terms of change management?
B.W.: It's really pretty simple, actually. They start too late and they have no structured process. But let me back up for a minute and just make sure that we're clear on what we're talking about when we talk about change management. In the drug industry, this whole idea of management of change, or change management, is often discussed in terms of changes related to the manufacturing process or to the product that's being created.
But what we're talking about is a structured process and tools for leading people through a change. So it's really about engaging people in the process of changing their behavior, not the changes associated with producing the product.
In that regard, the two things that we see most often is that [manufacturers] think about it too late, so it doesn't come to mind until they already have a problem, and two, they don't really have a structured process. They have these little ideas of things to do, but it's not a structured process.
P.T.: You mentioned the people component being such a critical issue, in addition to the technical component. Are the people issues often over-looked or underappreciated? You mentioned that sometimes manufacturers start too late, but do they just not address the people issues enough?
B.W.: Yes, it’s very common. There's growing awareness of the fact that we can get the technology right, we can get the processes right, but if the people aren't embracing and adopting those, then the probability of achieving the business objectives are slim. In fact, Paul, over the last ten years, there have been a number of studies done on change initiatives, whether it be new systems or mergers or other types of changes, and consistently over this last ten years, 70% of those failed to meet the overall business objectives.
When you look at that 30% who achieved their business objectives, it's typically those that have sponsorship engagement, and have a structured process with dedicated resources to manage the change.
P.T.: You're saying that it's obviously behavioral changes that are needed, but you can have a very structured process to encourage behavior change?
B.W.: Yes. There are a number of different organizations out there that are studying this field. One in particular is a company called Prosci, who does a set of biannual research projects, and it’s their data that suggests that the 30% have a structured process with sponsor engagement and dedicated resources.
And what does that give you? It gives you that ability to help people understand why the change is necessary. Oftentimes, people don't resist change; they resist being changed when they don't know why. And secondly, it gives you a way to identify and manage resistance.
Typically what happens is that organizations will go through a change and then they don't start dealing with resistance until it surfaces and it becomes a problem, rather than being proactive, anticipating it and implementing plans and mitigating that resistance.
P.T.: You mentioned dedicated resources. Do manufacturers sometimes fear the “expense” of change management projects? I put expense in quotation marks because I think you would suggest that these projects would end up, by far, saving money in the long run.
B.W.: I think the data would suggest that that is the case; that in those cases where organizations have invested in a structured process and dedicated resources, that they've actually found that they've been more successful . . . And there's a growing body of evidence to support that.
There is often a bias—I’m not sure bias is the right word—but a resistance to investing in what’s perceived as being a soft area, an area you can't manage. It's hard to get your head around this specific, tangible result of making that investment. So it's easy to say, "Well, I bought this computer" or "I bought this software.” But behavior is sometimes difficult to evaluate in terms of effectiveness.
P.T.: Let's talk more specifically about drug companies and the drug industry. Is it a given that change management is harder in highly regulated industries?
B.W.: No, I don't think so. I think it's pretty consistent across organizations, and even the private sector or public sector . . . change management is hard across the board. As you know, technology and processes don't talk back, they don't resist, they do what you tell them to do. People sometimes are not as easy . . . [laughs] . . . to work with.
Now, I would say that this [pharma] sector is a very dynamic environment, and so I think perhaps the pace of change is higher than you might find at many other organizations, which gives you less room for error, less opportunity to do things right the second time, because there isn't a second time. There’s another change right on the heels of the one you just went through. So I do believe that drug companies tend to be in perhaps a more dynamic environment when it comes to change.