Managing Director & Senior Partner
The content of this report is excerpted from BCG’s contribution to Leading Pharmaceutical Operational Excellence: Outstanding Practices and Cases. The book was developed in conjunction with the University of St. Gallen; edited by Thomas Friedli, Prabir Basu, Daniel Bellm, and Jürgen Werani; and published in November 2013 by Springer.
It was an increasingly familiar story. A well-established and successful biopharma-production site, accustomed to large, relatively stable production volumes for blockbuster products, was starting to see the effects of wider changes in the industry: products going off-patent, fewer products coming through the R&D pipeline, and a shift from churning out blockbusters to ramping up new, smaller products and focusing on the increasingly competitive period after the loss of product exclusivity. These macro trends were creating new pressures for the manufacturing site, including reduced and more volatile demand, less certainty about future volumes, much more intense cost pressure, and more of a need than ever to deliver the highest possible levels of quality, safety, and compliance.
Leadership’s underlying worry was that the organization might not be sufficiently ready, willing, and able to meet the site’s goal of becoming operationally best in class in this brand-new production environment. If employees were not able to bring to fruition earlier investments in change, any new performance initiatives would likely not pay off as planned. The site would be unable to advance from performance that met expectations to performance that exceeded them. Top management’s worry—couched in language such as “How on earth can we achieve such a step change in performance without our people fully onboard?”—was typical of the concerns of many biopharma-operations executives.
Because of these concerns, this biopharma-manufacturing site tapped into the science of behavior to tackle areas in which employees’ actions fell short and thereby impede transformative change. We call this the ABCs approach—antecedents enable behaviors, and the consequences of those behaviors are what truly motivate behavioral change—which is based on a simple principle from behavioral science. Indeed, all organizations, including biopharma production plants, can leverage basic facets of behavioral science to substantially improve operational efficiency and effectiveness. The science brings behavioral data into the workplace, establishes and accelerates feedback loops, and deliberately shifts the balance of positive and negative consequences to reward the most appropriate actions. The result? Highly engaged employees who consistently behave in ways that lead to operational excellence.
The Boston Consulting Group’s longtime study of change management and our wide-ranging empirical work across many industries and regions show that successful transformation is not just about making technical changes to manufacturing and supply chain processes. It is about getting all employees to change their behaviors so that they can respond effectively to the dynamic state of the business—and drive value throughout that business. It is about getting people to use the new processes fully, quickly, and consistently.
In a nutshell, biopharma manufacturers have to change change itself. The best way to do that is to focus on the people side of change.
The authors would like to acknowledge the contributions made by members of our extended team, including Elizabeth Lyle, Frank Cordes, John Curry, Benedict Shuttleworth, and Julia Madden.