Pharma companies must manufacture life-saving drugs efficiently to remain competitive. Many have found that sourcing out different aspects of production to CDMOs is an effective way to reduce costs and increase operational efficiency. Partnering with CDMOs has become an attractive option because pharma companies can leverage the regulatory expertise of CDMOs, realize stronger negotiating power with suppliers, and scale up production as needed.
But pharma companies that work with CDMOs to streamline operations and reduce duplicate work may face a larger challenge — an internal cultural resistance to change.
Preparing for change
They say that the soft things (behavioral issues) are the hardest to harness. Using effective change management techniques is critical to ensure that employees accept the cultural shifts that accompany supply chain transformational activities. The Theory of Planned Behavior, an established psychological model used to predict behavior, provides insights about the primary factors that influence how individuals perceive information and behave. Three key elements that determine an individual’s motivation to adopt change are:
Behavioral beliefs about the positive or negative effects of the change
Subjective beliefs — as calculated by weighting the normative beliefs by the motivation of the person
The amount of the individual’s perceived control
When preparing employees for change, Harvard Business Review article authors David Garvin and Michael Roberto stated that there are four key phases in a “persuasion campaign.” The first phase is to encourage employees to acknowledge the need to change. The second phase is to articulate the vision of the plan to employees, receive feedback, and incorporate it into the plan. The third phase is to maintain communication throughout the organization, and the last stage is to reinforce positive behaviors.
A case study
To successfully implement the transformational activity, change needs modelling throughout the organization. IBM published a study analyzing responses from 1,400 people to evaluate the most effective techniques in implementing change throughout a company. Without leadership support and an effective communication strategy to show the value of the change, the cultural shift rarely occurred.
Researchers also found that instilling a sense of belonging in employee teams was effective. Providing timely information increased the amount of perceived control, which positively affected employees’ intention to change.
For example, a CDMO transformed one company’s business processes from paper-based to an Enterprise Resource Planning (ERP) system, after using change management solutions. Although using electronic records promised to provide the client with unprecedented insights, teams expressed initial reluctance and discomfort with using an ERP system.
By applying the lessons articulated in the Theory of Planned Behavior, the CDMO client leadership team created a comprehensive strategy that saw the creation of companywide forums to increase the opportunities for employees to give feedback, ask questions and learn about the benefits of the ERP system. Key stakeholders from each team met to establish and define the responsibilities of each group, which increased the level of accountability. By encouraging discussion between leadership and different teams, they increased the amount of perceived control each employee had over the system implementation.
Key influencers from each team were identified and trained as “Super Trainers” to model positive normative behavior towards the ERP system. Each team conducted numerous trainings, during which they elaborated the rationale and urgency of the implementation.
They created different communication deliverables, such as comparison guides, pamphlets, posters, townhalls, webinars and reference guides to encourage a sense of purpose to unify the teams to use the ERP system. The leadership’s support was critical in communicating a shared vision.
There is little question that most pharma companies can benefit from working with a CDMO. But they must realize that any engagement will result in a cultural shift that will need to be addressed for successful implementation.