Specialty_Medical_Chemicals

Specialty Medical Chemicals Case Analysis Special Medical Chemicals is company that has uniquely cornered a niche market in the pharmaceutical industry. The company experienced rapid growth, but has now plateaued. Carl Burke, the newly elected CEO, has been given the task of reigniting the growth engine of the company without undoing the accomplishments of his predecessor. For the first few months, Carl spends time in the field trying to understand the business, its people, and how the organization works. After an unsuccessful attempt to create a “Leadership Team” similar to his former company, Carl decides to hire an outside consultant, Laura Burke, to independently assess the functionality of his management team. Laura provides insight as to the issues of the management team and Carl’s impact on that team. Carl realizes that the company has many strengths. Since its conception, the company has created hundreds of patents for specialty chemicals that allow other drugs to be taken more effectively and conveniently. SMC maintains a strong client base by helping them develop new compounds for their new products. Carl’s biggest concern is how the company is failing to grow within the industry, specifically within biotech and generic drug companies. Other weaknesses lie within the organizational culture where departments are entrenched into their own silos. For example, product development is not responsive to new business. Departments such as sales and manufacturing function at a high level, while administration (specifically customer service and personnel) is vastly underperforming. Carl brings to the table experiences in new product development and senior team management. The biggest challenge that Carl faces is to create a cross-functional team where departments are collectively working towards the success of the company. If the team is leveraged correctly, they could accomplish the goal of igniting new growth in the biotech and generic segment of the pharmaceutical industry. Carl’s initial approach to lead his team has proven unsuccessful. Carl isn’t being strong and dominant enough when needed. Carl’s former position within a highly functioning team was ideal. However, getting his new team to that level will require different tactics. To achieve his “Leadership Team”, he needs to practice situational leadership. From the beginning, Carl was very democratic, having little impact on the climate of the executive team. The results were meetings that produced mediocre ideas, consensus remained elusive, and each person became entrenched in their own functional silos. Although occasionally there is a need to be democratic and affiliative; Carl should heavily rely on an authoritative approach in the beginning that mobilizes his people toward a vision of transformation. Carl believes that the top executives within the current organizational structure need to be strategically realigned in order to achieve growth. Laura Wells concurs that broader jobs will allow Carl’s people to eventually behave as a “Leadership Team”. To do this the organizational structure should be redesigned according to Carl’s proposed organization structure that is illustrated in Exhibit 2. Specifically creating 3 general manager’s positions in the areas of pharmaceuticals, biotech and generics will allow for more focus and growth in those areas. Carl should align his top performers into the positions for targeted growth. Michael Everett is an excellent candidate for a position as general manager. Michael is good at solving difficult problem situations and is very innovative. His resume reflects fast growth experience in product development. He ran into problems with his old CEO, probably because he was being controlled and managed improperly. Michael’s abilities would be well aligned in one of the general management positions that is targeted for new growth and creativity. Specifically generics, since he has prior experience with generic based companies. Another candidate for general manager in one of the two growth areas would be Roger Englehard. Roger has proven track record of leadership success, but needs to be challenged in order to stay on track. He would be aligned very well in taking on the task of growth in biotech, especially considering his former experience with biotech firms. Jack Francis could take the final general manager’s position that would entail maintaining the pharmaceuticals line of business that is already being managed well. Jack is more nurturing and cautious. He may not be the innovative force to create growth in new areas, however he has proven that he can maintain current operations. Carl should also act fast in some house cleaning initiatives that would require getting rid of those in the management team that is not on board with the transformation or otherwise underperforming. David Rice is managing the areas of the organization that Carl is most concerned with. Customer Service, Order Fulfillment, Regulatory Affairs, and Personnel are all under David’s jurisdiction. Carl also was very distraught by the elaborate performance appraisal process that wasn’t delivering anything but high pay and role ambiguity. David is older, so his termination should be handled delicately as not to impose any age discrimination suits. His replacement could be George the personnel rep who runs things smoother when David isn’t present. However, in a situation where a department is ran so poorly, it would be wiser to bring in someone from the outside with an accomplished record. George might be elevated to a higher position within Administration to align him as an eventual predecessor. Maybe Carl should ask Laura Wells to come on board as the VP of Administration. The other members of the management team should either be trained more or demoted. Roberta Janis seems to be capable, but needs to be nurtured more to be developed into an effective leader. Carl could help her develop those skills by mentoring her. Craig Carlson, on the other hand, may have been thrown into senior management too quickly. He would be better suited for a position in marketing underneath Michael or Roger, where he could gain valuable experience. Carl would need to actively seek highly skilled individuals from other pharmaceutical firms in order to fill the new positions of sales, marketing and product development within each product division. This is something that Carl shouldn’t just delegate to his newly elected general managers. He has to be involved in this process to ensure that the best talent is being placed. This recruitment strategy could also act as a contingency plan to develop the means to ensure leadership development and succession. After clearly defining a plan of action and strategically aligning the right people into the right positions, Carl must continually monitor the company’s performance to ensure that the plan is being adhered to. There has to be time parameters established to achieving their goals, otherwise consequences must be faced. To engrain this change into the culture, Carl must create a feedback loop and continuous process for review. The current system of performance evaluation will need to be overhauled, so that not only will employees know where they stand, but also how they are performing in relation to the company’s new strategy for growth. The timeliness of these evaluations is important as well. The Monday morning meetings should remain in place for executive positions to stay focused on important strategic and organizational issues. Performance appraisals are a key part of communication and should be conducted for employees every quarter. There should be proper planning for visible performance improvements that recognizes and rewards employees involved in the improvements. Conversely, obstacles to change must be removed while changing systems or structures that seriously undermine the vision. In order for Carl to achieve growth in a company that has grown stagnate; he needs to move quickly in creating a focused strategy, while aligning his staff to be leveraged effectively. Situational leadership is a necessity for Carl if he wants to align the objectives of each individual to his objectives. He must come out of his comfort zone that he was used to having in his prior position. His new position requires him to develop a vision and motivate people to follow him. The advice and analysis of Laura Wells will allow better understanding of his staff’s strengths and weaknesses. However, now is the time for him to step up as a leader and put his plan into action. This won’t be easy as tough decisions have to be made as far as who will stay and be realigned and who will simply have to go. Once the decision is made, Carl must stick to his action plan and ensure that everyone else does the same. In order to create sustainable growth for the future, Carl must engrain these objectives into the culture by institutionalizing the new approaches and articulating the connections between new behaviors and corporate success.