Driving Cultural Integration after a

Fortune
F 100 Merger
M

Wendy Heckelman, Ph.D., WLH Consulting, Inc.

wendy@wlhconsulting.com

Lisa Brooks-
Brooks-Greaux, Ed.D
Ed.D,, Pfizer Animal Health
Lisa.Brooks--Greaux@Pfizer.com
Lisa.Brooks

OD Network Annual Conference 2010

New Orleans, LA
 Session Overview
X Case Study Overview - Business Challenges
X Need for a Cultural Integration Plan
X Presentation of Pfizer Animal Health – Wyeth Fort
Dodge
g Integration
g
X Highlights of the cultural integration cascade plan
X Interactive discussion on:
¾ Pitfalls and obstacles
¾ Lessons learned
¾ Sustainability

2
 Why Mergers Fail?
X Approximately 60 - 70% of all mergers and
acquisitions fail due to:
¾ Conflicts in corporate cultures
¾ Lack of leadership capabilities
¾ P r team
Poor t m performance
p rf rm n and nd collaboration
ll b r ti n
¾ Unclear reporting structure
¾ Inadequate
adequate realignment
ea g e t efforts
e o ts
¾ Inadequate communications
¾ Weak management practices
¾ Clashing management styles
¾ Key management losses

3
 Reasons for the Merger with Wyeth
X Advances core mission of applying innovative science
to improve
p world health ((includes animals))
X Enhances revenue potential resulting from:
¾ Access to late state drug pipeline
¾ Enhanced capability to bring new product to market
¾ Expand into new markets
X Increases significant cost savings from:
¾ Risk reduction in research and development
¾ Leveraging Pfizer’s scale

4
 Pfizer Animal Health Overview
X One of the largest Animal Health companies in
the world
X Over 5000 employees globally
X Divisions
Di i i include:
i l d
¾Livestock
¾Pork
¾Poultry
¾Equine
¾Companion Animal
 The Presenting Situation
External ¾ Competitive Marketplace
Marketplace ¾ Company valuation – stock price
¾ Economic downturn
Challenges ¾ Industry specific challenges (drought,
depressed milk prices)

¾ Pressures from larger parent organizations

(Pfizer & Wyeth)
¾ Different operating structures
¾ Different customer approach IInternall
¾ Merger announced following major
corporate restructuring and cost
Challenges
containment

6
 Challenges Facing a New Team
and
dCCommon Pitf
Pitfalls
ll
Bringing team members together can result in:
X Misunderstanding
X Misdirection
X Lack of confidence in leadership
X E
Even h
hostility
ili

Building any new team is a challenge even without the

added ppressures off business pperformance
f

7
 Breakout #1: Pitfalls & Obstacles

Activity: Use self-managed groups to discuss the

f ll i question:
following i
¾ Having heard the presenting situation, what are
th pitfalls
the pitf ll andd obstacles
b t l that
th t would
ld needd to
t be
b
overcome?
¾ What are other pitfalls and obstacles you have
experienced?

Reports: Due in 5 minutes

8
Overall Goals for Cultural Integration Plan
X Create a single culture, focused on Pfizer’s Mission and
Values; taking the best from both organizations
X Create shared beliefs and experiences throughout the
organization
X Helpp teams ppositivelyy address changes
g in structure,,
systems, external environmental forces, and expectations
X Clarify roles and responsibilities
X Develop a planned cascade to:
¾ Share “core beliefs”
¾ B ild trust
Build t t andd open, productive
d ti communication
i ti
¾ Identify what needs to happen to drive operational efficiency
¾ Determine p priorities and build action p
plans
¾ Ensure results are achieved
9
 Cultural Transformation Roadmap
Reinforce PAH Core
Share Core Beliefs Beliefs
& Develop Action
Plans
National Sales
5
Meeting
Managers with
4
their Teams

Cascade
and Build
Commitment

Align On Core
Beliefs and Field
3 Managers’
Strategic Direction
Meeting

Define PAH Core

BU Leadership Beliefs
2
Team
S LT Ali
Sr.
10/02/ Alignment
1 on Integration
2009
Execution
– Plan
2:30p
m 10
 What is Organizational Culture?

Organizational Culture is Comprised of

What People Do (How They Act) and
Why They Do It (How They Think)

11
 Understanding Organizational Culture

X Every organization has a culture!

X A culture forms whether you’re conscious of it
or not
X The organization’s culture will create its results
X The question is whether or not the culture is
effective in creating the desired results

Leadership is the act of creating and shaping

culture to drive the desired results!

12
 The Results Pyramid
(the “BEAR”
BEAR Model
Model*))
*Roger Connors, Tom Smith.
Journey to the Emerald City
R = What people do (how they act) causes
an outcome/results
Results

A = The beliefs people hold cause them to Actions

act and behave in a particular way

E = Experiences help to shape Experiences

beliefs

B = Beliefs define what a

person values, prioritizes, Beliefs
and motivates what they
do and why
Organizational Culture
13
Why Do Typical Efforts Fail
Or Are Not Sustained?

Results
Actions
i

Experiences

Beliefs

14
Alignment Between Culture and Results

With Alignment Without Alignment

Results

Actions

Experiences

Beliefs

15
 Team Defined
The Foundation of Our Culture

Accountability to
Drive Results

Innovation for Growth

Customer--Centric
Customer

Excellence in
Colleague Development

16
 Our Beliefs:
The Foundation of Our Culture

Accountability to
Drive Results

X We co s ste t y practice
consistently p act ce the
t e Oz
O Principle
P cpe–
“See it, Own it, Solve it, Do it”
X We continually ask ourselves
ourselves, “What
What else
can I do to achieve the desired results?”
X We
W b believe
li th
thatt how
h we drive
d i results
lt is
i as
important as the result itself — integrity
matters!
tt !
17
 Creating Experiences
X Every interaction with
a direct report or a customer
creates an experience
Results X Nothing impacts the prevailing
beliefs more than experiences
Actions X Conscious and consistent
application of the right set of
experiences
p shapes
p beliefs
Experiences X Experiences must be specifically
targeted to foster the desired beliefs
X Leaders
L d are responsible
ibl ffor:
Beliefs ¾ Identifying
¾ Creating
¾ Evaluating Experiences

18
 Actions Others Will Take

X What people believe

determines their actions (what
people do/how they behave)
Results
X If people are not taking the
actions leaders need to
right actions,
Actions examine the experiences they
are creating (“Always lead first
with
ith a mirror”).
i ”)
Experiences
X If you work hard at creating
experiences
p that support
pp
Beliefs beliefs, the right actions
follow naturally!

19
Linking our Beliefs to Desired Results
Outpace the market and achieve our financial
Accountability to 1 commitments
Drive Results

Innovation 2 Generate revenue by offering additional value-

for Growth added services

Most valued and relevant animal health

Customer-
Customer- 3 company in the eyes of the customer
Centric

Excellence in Employer of choice: attract, develop, and

Colleague 4 retain talent
Development
D l p t

20
 Building PAH’s Culture

USLT
Business Unit
L d
Leaders
US Ops

Functions :
Marketing,
Masters Business
O
Operations,
i
Legal

Turning
g the “Flywheel”
y

21
 Outcomes
X Agreed to CORE beliefs
Organizational
X Improved cross-functional collaboration and alignment
X I
Improvedd communications
i ti throughout
th h t the
th organization
i ti

X Leaders shared commitments regarding

g g the beliefs and
specific “experiences” they would create
Team
X Expectations were clearly communicated to new teams
X Improved prioritization of sales efforts at targeted
accounts
X Clarity on team objectives and tactics

X Clarity regarding organizational beliefs

Individual
X Direction to “act” in alignment with strategy and intended
results

22
 Business Impact

X Greater alignment between sales and marketing in

getting new products to customers in line with
customer buying cycles
X Faster,, more focused product
p launches to beat
competitors to the marketplace
X Increased revenue streams from targeting
g g priority
p y
and potential customers
X Shorter sales cycles with loyal priority customers
X Greater productivity and field effectiveness
X Higher long-term profits from loyal customers

23
 Breakout #2:
Offering
g Recommendations
Activity: Use self-managed groups to discuss:
¾ Lessons learned from similar cultural
integration efforts.
¾ What
Wh role
l OD practitioners
ii (i
(internally
ll or
externally) can play in ensuring a successful
integration?
¾ What sustainability tools can be used to
ensure continued success and results
achieved?
Reports: 10 minutes

24
 Lessons Learned Regarding
Merger
g Integration
g
X Understanding the viewpoint of remaining employees
X Think about how it feels to be acquired
X Employee retention is critical to the success of most
mergers
X Be sure communications are received and understood
X Communicate often – you can never over communicate
X Tell people as much as you can as soon as you can
X Never underestimate the hunger for information
X Handlingg termination issues properly
p p y pays
p y off on manyy
levels
25
Every Tree Casts a Shadow

26
Questions

27
 Contact Information

Dr. Wendy Heckelman, President Lisa Brooks – Greaux

WLH Consulting,g, Inc.
2703 Cypress Manor
Suite 100
Fort Lauderdale,
La derdale FL 33332
954-385-0770
Greaux,, Senior Director
Learning & Development
Pfizer Animal Health
5 Giralda Farms
Madison,, NJJ 07940
973--660-
973 660-7659

wendy@wlhconsulting.com Lisa.Brooks--Greaux@pfizer.com
Lisa.Brooks @
Co--presenter:
Co
Sheryl
y Unger
g
sheryl@wlhconsulting.com

28