You Can't Hurry Change: How Not to Burn Through Billions

Lasting change doesn't come from the top. Systems that no longer work must be rebuilt from the bottom up, says Fred Hassan.

In 2003, Schering-Plough was burning through cash at the rate of a billion dollars a year. Profits were down 72%. And the company's problems went deeper than productivity: exclusive patents on revenue-driving drugs such as Claritin were about to expire, while legal battles - including the largest fine in FDA history - had left the pharmaceutical giant in need of life support.


Sponsored by:

That year, Fred Hassan was hired as CEO. Hassan had a reputation for producing dramatic turn-arounds from ailing corporations in the health care industry, having successfully resuscitated and sold Pharmacia to Pfizer in 2002. The change of course at Schering-Plough was no less sensational, culminating in a $41 billion acquisition by Merck.

A rarity in the era of the rockstar CEO, Hassan's success seems to be more attributable to his skill at putting out fires than igniting them. His strategy for restoring Schering-Plough was based on two principles:

  • planning from the bottom-up
  • engaging managers in his vision to create front-line advocates for change
  • Instead of forcing an agenda on employees dictatorially, "if one can get them to be a part of the change, if one can get them to start to understand the strategy so they can repeat it without a PowerPoint, they can internalize it and become ambassadors of it to their people." 

    This process takes both time - 3 to 5 years - and trust, neither of which are plentiful in the post-2008 environment. But it pays off in the end. Once momentum has been built organically, "it is amazing how quickly productive energy gets released and the change process occurs."

    What’s the Significance?

    The bottom line is, you can’t force growth from the top. “You have to get the whole system to be a part of the change process and you have to make the case for change," says Hassan. That happens by showing, not telling. Communicate your observations and make your actions a model that people can aspire to. Most importantly, "Do not over-promise about what you’re going to do. Just get in there and listen to people.”

    Whatever the goals, says Hassan, a good leader ensures that everyone contributes to coming up with a plan for achieving them. Compensation is an important part of reinforcing a company’s culture, but it’s not everything. Even more essential than financial rewards is recognition - giving employees that sense that their perspectives have been heard and that no success has gone unnoticed.  

    Frontline managers can play a major part in seeing that this happens on a day-to-day basis, as well as in the long-term. “There may be many ways you can reward people, but it’s a cycle of motivation. It’s showing the way. It’s going the way. It’s being fair on compensation, differentiating among those who are the locomotives versus those who are valued team players, and then reinforcing that whole process all over again." 

    That means hiring people who are “very good in their own areas, but who also believe in the team succeeding together, who root for the person next to them.” Hassan’s challenge: “You cannot have passive resisters. You must have culture carriers as you go forward.”

    This content series is brought to you Cadillac. We are proud to partner with Cadillac to bring you this special series on the Nantucket Project.

    LinkedIn meets Tinder in this mindful networking app

    Swipe right to make the connections that could change your career.

    Getty Images
    Sponsored
    Swipe right. Match. Meet over coffee or set up a call.

    No, we aren't talking about Tinder. Introducing Shapr, a free app that helps people with synergistic professional goals and skill sets easily meet and collaborate.

    Keep reading Show less

    4 reasons Martin Luther King, Jr. fought for universal basic income

    In his final years, Martin Luther King, Jr. become increasingly focused on the problem of poverty in America.

    (Photo by J. Wilds/Keystone/Getty Images)
    Politics & Current Affairs
    • Despite being widely known for his leadership role in the American civil rights movement, Martin Luther King, Jr. also played a central role in organizing the Poor People's Campaign of 1968.
    • The campaign was one of the first to demand a guaranteed income for all poor families in America.
    • Today, the idea of a universal basic income is increasingly popular, and King's arguments in support of the policy still make a good case some 50 years later.
    Keep reading Show less

    A world map of Virgin Mary apparitions

    She met mere mortals with and without the Vatican's approval.

    Strange Maps
    • For centuries, the Virgin Mary has appeared to the faithful, requesting devotion and promising comfort.
    • These maps show the geography of Marian apparitions – the handful approved by the Vatican, and many others.
    • Historically, Europe is where most apparitions have been reported, but the U.S. is pretty fertile ground too.
    Keep reading Show less

    Why I wear my life on my skin

    For Damien Echols, tattoos are part of his existential armor.

    Videos
    • In prison Damien Echols was known by his number SK931, not his name, and had his hair sheared off. Stripped of his identity, the only thing he had left was his skin.
    • This is why he began tattooing things that are meaningful to him — to carry a "suit of armor" made up the images of the people and objects that have significance to him, from his friends to talismans.
    • Echols believes that all places are imbued with divinity: "If you interact with New York City as if there's an intelligence behind... then it will behave towards you the same way."
    Keep reading Show less