Changing company culture is easier than managers believe and can have a rapid impact on the bottom line, Haas Professor Jennifer Chatman shows in a new case study in the latest issue of the Haas School's California Management Review.
“There’s a lot of talk in the consulting industry about culture change being so difficult,” Chatman says. “It takes a long time, it is expensive, it may not improve the bottom line. That’s wrong.”
Chatman’s case study, Culture Change at Genentech: Accelerating Strategic and Financial Accomplishments, is part of the new Berkeley-Haas Case Series, which recently expanded its distribution through Harvard Business Publishing. Chatman's case tracks Genentech senior vice president and Haas alumna Jennifer Cook, MBA 98, who within a year transformed the culture of her Immunology and Ophthalmology (GIO) division after it was acquired by Swiss pharmaceutical giant Roche Group in 2009.
The Roche-Genentech merger left “a hangover effect” among some of the 11,000 employees working in four divisions who had weathered layoffs, uncertainty, and management changes after the deal. Cook wanted to bring the GIO team together and give them a sense of shared purpose.
Cook first conducted a culture assessment within the division in 2010, using a statistical tool Chatman developed to create organizational cultural profiles. That profile showed that Cook’s employees wanted to focus on innovation and patient outcomes, the attributes that had made Genentech successful initially. So Cook shifted the division message: back off slightly on our intensive focus on short-term results to make room for longer-term innovation to benefit our patients. She developed four new pillars that defined the culture: patient orientation, focus on people, courage/innovation, and integrity.
Cook moved quickly to get senior leaders onboard, creating a Cultural Advisory Board to build awareness of the four pillars, and developed rewards and recognition for workers who exemplified the new culture.
Miraculously, within just 11 months, Cook's GIO division had achieved her five-year financial and strategic goals: providing breakthrough treatments for 300,000 patients suffering from chronic immune system and ophthalmology diseases; creating three therapeutic franchises in rheumatology, respiratory, and ophthalmology; and reaching $3 billion total in revenue within these three franchises.
Since then, GIO continues to focus on aligning its culture and strategy and also continues to thrive. Cook was promoted in August 2013 and moved to Basel, Switzerland, to run Roche Commercial for all of Europe.
Comprehensiveness and consistency were key to Cook’s success in shifting her division's culture, Chatman says.
“You really have to be all in,” Chatman says. “Leaders need to get people to step up and take ownership of culture change to make it happen.” Cook also put employees first, acting as the leader and providing direction but ultimately putting success in their hands. “This wasn’t Jennifer Cook’s change, it was GIO employees' change,” Chatman says.