Special from BPI Europe 2015

Eliminating fear culture can save operational costs and jobs, says Pfizer

By Dan Stanton contact

- Last updated on GMT

Pfizer's Kim Sandell presented his renegade management methods at BPI Europe last week
Pfizer's Kim Sandell presented his renegade management methods at BPI Europe last week

Related tags: Pfizer

Pfizer reduced costs 40% without cutting jobs at a facility in Sweden using an alternative approach to organisational and cultural behaviour, and hopes to do the same at its newly acquired Austrian plant.

Over a five year period, Pfizer’s biomanufacturing facility in Strängnäs, Sweden increased production five-fold, reduced its operations costs by over 40%, and saw a 30-50% decrease in product lead times, all without having to cut jobs.

The results came due to changes in the plant’s organisational and cultural behaviour, Kim Sandell, Strängnäs’ ex-Director of Supply and Operational Excellence, told delegates last week at the Bioprocess International Summit in Dusseldorf, Germany.

And now Sandell has gone to Austria and hopes to employ similar techniques in the role of Integration Leader, at the Orth ad Danau facility, recently acquired as part of a deal that saw Pfizer buy Baxter International’s vaccine business for $635m​.

Fear holding pharma back

“When building a culture we need to understand what we are doing. We need some sort of system to help drive our business and some talk of reward,”​ he said, but pharma companies including Pfizer, are opting to spend time and money rushing into restructures and ‘cost-cutting’ programmes that inevitably cause stress among the workforce and result in limited improvements.

Instead, to get such productive results in Sweden, Sandell looked at how lack of courage and lack of direction is suppressing innovation, efficiency and financial reward.

“Pharma has direction but is held back by fear,”​ he said. “The first thing I learned at Pfizer is that we have to be careful with FDA, but should we be so scared that we can’t talk to them?”

If a firm has courage but has no direction, chaos pursues, he continued. “But this is actually better than being where pharma currently is, as at least we have courage. Going from fear to courage is actually really hard, but to add some direction to chaos is actually relatively easy.”

Three year-olds and Performance Bonuses

Sandell has previously spoken to this publication about his unconventional ‘American Idol-style’​ hiring techniques employed at the plant, but he told delegates that in his mind ideal candidates would be three-year olds “because they have no fear, are really curious and they ask a lot of ‘whys.’

“We need people with this sort of mind-set to do something different.”

He also urged pharma management teams to reassess rewarding workers with performance bonuses which are “believed in a classical organisational structure to be a good thing, but for me it fosters a behaviour of looking good,”​ and stifles individual creativity and potential.

“Maybe we should give the biggest bonus to the biggest mistake of the year as that was probably someone who was courageous and tried, instead of setting safe targets knowing that we are going to be able to deliver something that looks good afterwards.”

To illustrate this, he spoke of an experiment taken in Strängnäs that saw staff given a project to cut a 40 day lead time for a specific product. The group was given no target and after a week implemented changes which saw a reduction of almost 20 days, greatly surpassing management’s expectation.

“When you ask for results, you only get what you are asked for and never the true potential. If I ask for ten I might get nine, ten or eleven, but if I ask a group of people what I can achieve you get a totally different answer.”

Watermelon-Metrics

Sandell continued to blame passivity behind organisational failure, but also noted fear was driving a lack of internal transparency and led to many drugmakers to operate under “watermelon-metrics – shiny green on the outside but red on the inside.”

When asked, Sandell said his renegade organisational restructure had been done “off Pfizer’s global management radar”​ but the results stood for themselves, and he is hoping to produce similar results in his new role in Austria.

in-Pharmatechnologist.com contacted Pharma's head office to see if the firm was planning to set-up similar organisational restructures across its full network, but did not receive a reply at the time of going to press.

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