Embed Size (px)
Citation preview
| Dr. Bruce Gillies
ORGANIZATIONAL BEHAVIOR AT EMD SERONO: PERFORMANCE MANAGEMENT, DECISION MAKING, AND WORK DESIGN BY A MID-SIZE BIOPHARMACEUTICAL SUBSIDIARY
FINAL PAPER OUTLINE
Table of Contents
Overview of Organizational Behavior Related to Worker Effectiveness at EMD Serono, Inc...............................................................................................................4
Overview of EMD Serono, Inc...............................................................................4
Organizational Behavior Topics Under Study........................................................5
Performance Management................................................................................5
Decision Making.................................................................................................7
Design of Work..................................................................................................9
Importance and Outcomes.................................................................................11
Background of Organizational Behavior Related to Worker Effectiveness............13
Literature Review................................................................................................13
Performance Management..............................................................................13
Decision Making...............................................................................................17
Design of Work................................................................................................19
Relationship of Organizational Behavior to Worker Effectiveness......................22
Analysis of EMD Serono, Inc...................................................................................24
Background and Industry....................................................................................24
Current State.......................................................................................................26
Organizational Environmental Concerns.............................................................30
Recommendations.................................................................................................31
Performance Management.................................................................................31
Decision Making..................................................................................................33
Design of Work....................................................................................................34
Importance and Anticipated Benefits....................................................................35
2
Implementation Planning....................................................................................36
Cost-Benefit Analysis..........................................................................................38
Conclusions............................................................................................................39
Recommendations for Future Study...................................................................41
Appendix................................................................................................................42
Table 1 – Organizational Hierarchy.....................................................................42
Table 2 – Stage Gate Overview of Implementation............................................43
Table 3 – Gantt Chart of Implementation...........................................................44
Table 4 – Cost Schedule of Implementation.......................................................45
Table 5A – Costs vs. Time for Implementation....................................................46
Table 5B – Cumulative Costs vs. Time for Implementation.................................46
References.............................................................................................................47
3
Overview of Organizational Behavior Related to Worker Effectiveness at
EMD Serono, Inc.
Overview of EMD Serono, Inc.
EMD Serono, Inc. is a biopharmaceutical manufacturer with about 1,100 employees in
the U.S. Their headquarters is in Rockland, MA where they have operated since 1971 (EMD
Serono 2012). They are the U.S. subsidiary of a larger German chemical company (Merck
KGaA), but with a separate leadership team based in the U.S. Their operations in the U.S. are
distinct from their parent company, but they have many employees who work primarily or
spend significant time in Germany. In fact, EMD Serono aims to be a global player itself in drug
discovery. To this end, they recently opened a new $65 million research facility in Billerica, MA
on February 10, 2011 (YouTube 2012). This facility is near many academic and entrepreneurial
partners. It has a multi-disciplinary focus with general laboratory facilities and dedicated areas
for research for three of EMD Serono’s divisions.
The company focuses on R&D activities to bring new pharmaceutical products to market
in the areas of oncology, neurodegenerative diseases, rheumatology, and fertility (Bloomberg
Businessweek 2012). They have a series of products in their “pipeline” in various stages of
clinical trials. One product highlight is Erbitux which they are developing for treatment of
multiple types of cancer. They aim to bring products to market in one business division that
could potentially have multiple therapeutic applications across multiple areas (EMD Serono
2012). After developing a new pharmaceutical they work on expanding the number of diseases
on which is can be used.
4
Organizational Behavior Topics Under Study
EMD Serono, Inc. is a high-tech, fast paced biopharmaceutical company with many new
products under development. In many of their divisions, they are taking a high risk, high
reward strategy dependent on successfully launching new drugs and therapies. The study of
organizational behavior at EMD Serono will focus on the drug discovery aspect of their
organization which will apply most to the divisions and groups with the most active research
pipelines. The combination of highly skilled employees, rapid screening of new ideas, and high
cost of bringing products to market will challenge traditional approaches to organizational
behavior. This suggests that a study of performance management, decision making, and design
of work is particularly appropriate in regards to drug discovery at EMD Serono.
Performance Management
The goal of performance management is to determine the most effective ways to boost
performance in an organization by understanding the nature of the organization’s employees
and their tasks. Therefore, it is intertwined with the other organizational behavior topics such
as decision making and design of work. Performance management efforts can be directed to
individual employees or towards adjustments in tasks, jobs, or work systems. A classically
implemented performance management cycle starts with goal-setting, is followed by a period
of communication and adjustments, and ends with a formal performance appraisal. Since
employees have been exposed to traditional performance evaluations and already receive
feedback from their supervisors, there is the potential to roll out multiple classes of
organizational behavior improvements through an upgraded performance management
system.
5
Performance management consists of multiple steps across two main phases. The first
phase is about information gathering and analysis starting with a proper definition of
performance for each role in the company. There is some strategic management involved in
defining performance, but should be connected to the metrics the company uses to monitor
organizational success. At the employee level, performance can be evaluated in regards to
technical skills, specific work behaviors, and general interpersonal behavior. After defining
performance comes performance evaluation. An organization needs to adopt methods of
performance measurement and feedback. These methods are sensitive to inaccuracy,
uncertainty, and bias. An effective system allows for iterative improvement.
The second phase of performance management is behavior modification (reward and
punishment). There are many aspects to reinforcing good behavior and dissuading bad
behavior. In terms of rewards, there is the obvious monetary and benefits component, but the
connection between earning and performance needs to be clear to employees. The reward
system itself can also consist of both individual and team rewards, tailored to the culture and
structure of the organization. The basic model for understanding performance issues is Kelley’s
attribution model. A manager seeks to infer whether an employee’s poor performance is due
to internal or external causes by analyzing how peer employees act in similar situations
(consensus), how this employee has acted at other times (distinctiveness), and how often this
employee exhibits the behavior causing poor performance (consistency). After this analysis,
the manager or organization can decide what feedback to give, changes to make, or rewards or
punishments are appropriate.
6
Decision Making
Managing decision making in the workplace is about guiding employees to select the
action that most effectively moves the organization towards their objectives. Similar to
performance management, the focus can be on employees, teams, or all the way up to
company-wide. Decision making is best accomplished when the objective is clearly defined.
Also, much like performance management, decision making moves through stages of
information gathering, evaluation, and feedback. An effective organizationally supported
decision making process is iterative in nature.
There are a variety of models to help managers understand how different employees
tend to make decisions in different situations. The Rational Model is a theoretical form of
decision making under conditions of perfect information, sufficient time to compare
alternatives, and pure rationality in thinking. Bounded rationality, or satisficing, modifies the
constraints of the rational model by the application of heuristics and allowing the decision
maker to choose the first acceptable path (ranking is not critical). This form of decision making
occurs most naturally when employees are faced with time pressures. The Garbage Can model
is chaotic decision making. Different factors must come together spontaneously for a decision
to be made. This method requires significant employee interaction. It emerges when there is
high uncertainty or when problems and new opportunities blur and develop rapidly.
The effectiveness of decision making processes used by employees is influenced by
personality traits and biases. The Jungian Cognitive Styles (ST, SF, NT, and NF) influence what
individuals rely most heavily on when making decision. Some employees are more fact-based
7
than others. Some employees are more likely to consider a wider range of possibilities and/or
the impact different options will have on the people involved. The Z Problem-Solving Model
can serve as a technique for managers and individuals to explore different perspectives by
asking a series of sensing, intuitive, thinking, and feeling questions regarding the problem at
hand. Independent of the cognitive styles, cognitive biases can short circuit otherwise solid
problem solving and decision making approaches. The anchoring and recency biases
overemphasize initial or recent data. Group think and wishful thinking can cause a group to
support a choice that individual members might rationally disregard.
In the context of the research pipeline at EMD Serono, there is a need to quickly identify
promising leads, develop them in stages, and successfully hand off to different groups on the
path to a marketable drug or therapy. While the overall situation seems combinatorial, that is
there is a clear connection between R&D and a salable product; in reality it is highly uncertain
which leads will make it to market. If the company overemphasizes a metrics related to
graduating new drug candidates through to the next stage in the pipeline, employees may be
less able to let go of marginal leads. They may escalate their commitment and force less
promising candidates through in order to meet quota. A positional style that focuses on
maximizing the number of quality candidates at each stage in product development could
increase the overall frequency of successful product launches. Managers will need to balance
helping group members develop decision-making processes that maximize their local chance of
success with staying connected to the overall objective of moving promising new drugs through
the pipeline.
8
A company can guide its employees towards using a strategically chosen decision-
making process using its performance management system and training. Different
departments may be best served by adopting different decision-making procedures with more
or less formalism and/or documentation. Due to the influences of cognitive styles and other
individual differences on decision making, managers at all levels need to develop tools to guide
employees towards effective decision making. Employees themselves need to take ownership
of upgrading and aligning their natural decision making process with their individual and team
goals. It is possible multiple roles or jobs will be necessary to accomplish this.
Design of Work
Design of work in an organization is about helping make the activities undertaken by
employees be productive, effective, and in service of organizational goals. It is also related to
the buildup of work activities into roles and jobs for individuals. Successful design of work lays
the foundation for both individuals and teams. For individuals, properly tailored work can
increase satisfaction and can clarify progress towards personal, professional, and organizational
objectives. These connections allow for more effective decision making (provides automatic
feedback on good or bad decisions) and help with manager feedback through a performance
management process. Design of work enables more rational job structuring which enables
more effective organizational design (hierarchy, structural decisions).
The traditional approaches to job design are rational attempts to reducing common
problems seen in workplace (low productivity, burn out, low efficiency). The earliest approach,
Scientific Management, gives managers a two part assignment: standardize work roles first and
9
then find the workers who best fit these roles. The success of an organization’s design of work
under Scientific Management is measured by production efficiency. The common arguments
against this approach are that employees will get bored without task variation and lack of cross
training makes the organization inflexible. An inflexible organization is less able to handle
shocks (sudden increases or decreases in demand, supply, or labor). More importantly for
modern high-tech manufacturing, Scientific Management leaves little room for continuous
improvement or innovation. Even in a traditional, mature manufacturing environment an
organization would need to “violate” Scientific Management by having some generalists or
knowledge workers to avoid the risk of falling behind competitors as technology improves. Job
enlargement and rotation addresses the issues of boredom and repetition in a horizontal
fashion (workers cross-train or rotate through tasks of a similar group, within close proximity,
or at a similar skill level). Job enrichment aims to increase worker satisfaction in a vertical
fashion (workers do tasks outside their area of specialization). While sometimes effective,
these modifications to Scientific Management have the same fatal flaw – they are applied
universally and do not take into account individual effects or what would be optimal for specific
teams or departments within the company.
Job Characteristics Theory is the first traditional model of job design model to focus on
the impact of job characteristics on the individual. The characteristics included in the model
are: skill variety, task identity, task significance, autonomy, and feedback. This has significance
for modern job design due to its recognition of the important of iterative feedback – both from
the task to the employee’s performance goals and from the task to the organization’s overall
metrics.
10
Modern work and job design approaches are more interdisciplinary. They draw
strategies from ergonomics, psychology, biology, and engineering. There is also increased
attention to cultural and global differences in the responses of workers to work design
strategies. Socio-technical systems combine approaches that seek to enhance employee
motivation with technical approaches to enhance task efficiency. Examples of the former
include team building and communication. The Human relations movement argues that how
employees naturally group is more important than the official organizational structure.
Examples of technical approaches include process improvement and task analysis. This
development in design of work is significant since it gives workers the autonomy to contribute
to ongoing improvement. However, an organization requiring high creativity and innovation,
such as a research or product launch environment, may require an additional design
framework. Without a conscious focus on innovation at the design of work level, employees
may not be sufficiently motivated, empowered, or technically enabled to develop new
methods, products, and processes to deliver the performance the organization needs.
Importance and Outcomes
The outcomes that any organization seeks from an overhaul of their design of work
strategy, decision making process, and performance management system is a set of tools and
guidelines that enable managers at all levels to efficiently run their teams. There will be
situations where change is implemented company-wide and top-down, most likely in the area
The combination of design of work, decision making, and performance management allow an
organization to achieve alignment between local efforts and company direction. These three
areas are specifically important in that they serve as a way of translating high level company
11
objectives into action plans and guiding principles that each subset of employees can
understand. Developing an overall methodology for converting company metrics into team and
individual goals is critical for companies with highly trained, educated, and skilled teams tasked
with innovation. Otherwise, there is likely to be mismatch between the output from these
creative-technical teams and what the company needs to succeed. A “worst-case scenario” is
possible where teams generate product that they feel is successful and continue down a path
that does not connect with division level or corporate goals. The longer this situation persists
the harder it gets to redirect or retrain the team and the greater the impact on productivity and
job satisfaction when an abrupt change is ultimately required.
The situation at EMD Serono is the quintessential version of this. Drug discovery and
new therapy product development is conducted by many small teams of world class
professionals. There are multiple divisions all vying for resources and to get their products in a
high profile pipeline to clinical trial and market. EMD Serono is a sizable company supported by
revenue from the license and manufacture of previous product successes. However, the high
cost of developing new products and the demand for growth from stakeholders creates intense
pressure to find more effective ways to identify new product candidates (and not waste
resources on dead ends).
This study will focus on the most entrepreneurial areas at EMD Serono.
Recommendations for the fastest pace sections of the company should apply company-wide. In
fact, fast growth in the newer research areas would only put pressure on more of the company
to act like a collaborative network of small start-up pharmaceutical firms. Tangible outcomes
12
for EMD Serono will be guidelines for optimizing work design, useful and tailored decision
making process strategies, and an improved performance management system.
Background of Organizational Behavior Related to Worker Effectiveness
Literature Review
Academic research for this study was done using Google Scholar and WorldCAT.org. In
order to maintain source quality, searches were restricted to allows peer-reviewed sources
only. In order to maintain source relevancy, for the most part only sources published on or
after the year 2000 were consulted. There was a strong preference for sources that provided
easy to access full text versions as a means of avoiding marginal or minor journals.
Overall, the three organizational behavior topics exhibit a “waterfall” relationship in the
literature. Improvements in design of work are necessary to influence individual and group
changes in decision making, which is critical in connecting individual and team output to
company level metrics required to overhaul an organization’s performance management
system.
Performance Management
There is some belief that traditional methods of drug discovery will soon show
slowdowns in productivity (Cohen 2003). The current approach of posting unreliable metrics
and establishing quotas is inducing drug researchers to send inferior leads to the next round of
testing. In reality, reliable metrics are difficult to develop, data sets are small, and the
turnaround time on feedback is long (over a decade in some cases). Reliable and rational
13
objectives are key to any effective performance management system. Objects require metrics
that are based on sound data that are updated frequently and accurately. For managing
performance in drug discovery, a better practice than gross leads and quotas could mean
developing “surrogate markers”. These would be selected to match up with a rigorous data
review of drug discovery track records. Actions bioscience companies can take to develop
surrogate markers include: reviewing who makes target selection decisions, drug discovery
track records by divisions and teams, and potential correlations with team characteristics (i.e.,
conflict). If insufficient data of this type is available, a company could survey all departments in
the drug-to-market chain. This would be followed up by a separate department (such as
Quality) aiming for widespread technical and organizational feedback as soon as possible. The
involvement of a separate department is to get everybody on the same page in terms of drug
validation. This general template underscores the importance of both communication and
facilitator roles in modern drug discovery.
A sister pharmaceutical company to EMD Serono has recently made changes to the
way performance evaluations are handled. Serono in Switzerland modernized its performance
management system before the Merck takeover in 2006 that ultimately led to the current
ownership of the EMD Serono as a subsidiary of Merck (Coleman and Chambers 2005). This
was obviously a time of flux at a very similar pharmaceutical company which may have set the
stage for affecting changes in organizational behavior. The performance evaluation procedure
was adjusted so that employees initiated the process by self-ranking themselves in private as
opposed to the previous traditional yearly review. This was followed by a meeting with their
supervisor focusing on the differences between their and the employee’s rankings. Supervisors
14
were trained to focus on skill building in service of the company’s core competencies to address
deficiencies. Compensation was handled separately. The entire system was automated and
electronic through a Human Resources Management System. The reward system was balanced
roughly equally around individual and group performance.
Other industries are implementing novel performance appraisal strategies. A multi-level
approach was used in conjunction with continuous improvement at a health care organization
(Crane and Crane 2000). The appraisal method was to evaluate performance at the
organizational level, quality at the team level, and behavior at the individual level. This
combination has potential at any organization with significant team work and collaborative
employee interaction. Drug discovery teams at EMD Serono would meet these criteria. Case
study evidence shows multi-level performance evaluation process did not suffer from the
traditional disconnect between individual output and team outcome often seen in individual-
only based performance reviews. Employee motivation to join teams and do group work
increased after the appraisal process was in place. This was hypothesized to be due to the
improved link between team performance and bonus pay.
There are multiple examples of manufacturing firms (none “high tech” or bioscience)
that show the real world effects of having a performance evaluation system in conflict with
operational needs. Most modern manufacturing firms are targeting increased flexibility and
reduced bureaucracy in order to compete in an unstable, globally competitive environment
(Duberley et al. 2000). The literature suggests that performance management and
manufacturing process decisions are intertwined. A performance evaluation and control
system can make or break the implementation of manufacturing system changes. The wrong
15
system (overly bureaucratic or using wrong metrics) can induce employees to overly specialize.
This reduces operational flexibility and increases managerial complexity. A redesigned
performance management system could enable new development methods currently
hamstrung by this effect. A next-generation system should be capable of incorporating iterative
improvements in either technologies or worker skills. The central challenge is to roll out the
right system in situations where work duties change often. This applies in principle to other
industries such as drug discovery. The coordination of many R&D activities is analogous to
manufacturing operations in this regard.
The measurement and relationship of intangible factors are related to performance as
well. One author claims that pharmaceutical companies need to measure intangible factors in
order to drive growth (Heslop 2008). Safety monitoring, market share, and relative market
strength are three candidate intangible and non-financial factors that are appropriate for the
pharmaceutical industry. Unfortunately, there is little guidance in the literature on how to
focus on these indicators to improve the company’s bottom line. Tethering individual and
group performance across multiple organizational levels seems more effective than trying to
develop intangible company-wide factors appropriate for use in performance management.
While searching for global metrics is enticing, it is likely that developing local, context specific
performance benchmarks and objects is more practical.
There is further evidence of the importance of linking individual goals and procedures to
team goals in the international banking industry (Hu and Liden 2011). In particular, the
examination of five Chinese banks uncovered positive relationships between goal/process
clarity and team effectiveness. It is possible that there is a side benefit of reduced conflict, but
16
this requires further investigation. Strengthening the individual-team performance connection
is worth considering at EMD Serono.
Decision Making
Drug discovery consists of a series of decisions on whether to move forward with or stop
development. There is evidence in the literature that “entrepreneurial character” has a
significant impact on drug discovery decision making (Cowlrick et al. 2011). In one study, real
world drug development scenarios were analyzed by a diverse group of researchers as a means
of accessing a wide range of ideas. A wide range of decision making styles amongst experts
means that opening up the discussion to more people would be beneficial for innovation. This
structured analysis is a potential tool. Cultivated real world examples could be analyzed as an
ongoing exercise for practice. What led to successful therapies and what failed deep into the
research pipeline could help increase entrepreneurial capacity in participants. Applying the
practice for current research problems can increase the pool of what the literature calls “lateral
expert inputs”. Other decision making schemes that hold promise are open innovation and
crowdsourcing, both requiring detailed implementation plans to be effective.
Important breakthroughs occur more frequently when a wider range of skills are
brought together, communication within and across networks is increased, and network size is
increased (Hage and Hollingsworth 2000). There is significant empirical evidence to link
product and process innovations with the concept of the “idea innovation network”. This holds
true across the full spectrum of organization types, from basic research to product
development to marketing. Again, the implementation plan is critical to realizing any gains in
innovation from changes in how workers interact. This plan will be specific to the organization.
17
The literature gives some guidelines. If different networks of workers communicate and
coordinate using similar modes, adopting a company-wide system of “innovation
interpretation” can be beneficial. The methods of communication should be based on natural
network preferences. Expanding basic and applied research networks boosts innovation, but
the most gains are achieved when there is a concurrent increase in connections between
research and other networks. Changes to networks, teams, or modes of communication should
be made keeping worker motivation and resource availability in mind (Kroon et al. 2012).
These factors are shown to be intertwined in the literature as well.
Decision making in a leadership position can be modeled using a framework of five
contexts: simple, complicated, complex, chaotic, and disorder (Snowden and Boone 2007). The
recommended decision making strategy is specific to context. Leaders should use best
practices during simple contexts, rely on expert analysis during complicated contexts,
experiment during complex contexts, and respond rapidly to establish order in a chaotic
context. Unfortunately, there are no clear methods for reliably identifying what context a
leader is facing. Extended research pipelines in pharmaceuticals are likely to move in and out of
many of these contexts. Developing a method for identifying the current context could
dramatically help decision making under long term uncertainty.
There is another connection between target market or goal breadth and optimal
organizational design (in terms of operational effectiveness). There is evidence of a correlation
between organizational forms and performance (Tuominen et al. 2000). Since worker decision
making is influenced by team and company structure, there is an implicit correlation between
the target market scope and optimal decision making strategy. Targeting a broad market with
18
“transactional” customers is best served by crossfunctional teams. Both narrow and broad
markets with “relational” customers do better with incentive systems. A broad market with
“relational” customers requires committed employees. Developing how successful teams make
decisions with different market scopes could help organizations with a wide range of products
and target markets.
Design of Work
A multi-objective model for skill-based job rotation can minimize job injuries and
occupational hazards (Aryanezhad et al. 2009). There is a connection between work safety,
ergonomics, and worker learning curves. This is important for companies such as EMD Serono
with many jobs requiring repetitive lab tasks (pipetting, loading and unloading analytical
equipment) coupled with knowledge work. It would be beneficial to move workers up learning
curves for both operation of analytical equipment and data analysis. According to the
literature, the economic benefit of a job rotation scheme that takes into account job skill and
hazard level can be quantified. The model and methodology of manufacturing specific
occupational health studies can be adapted for lab related ergonomic and repetitive task issues.
Taken further, literature methods could be applied to error rates as an analog for injury rates.
This would require significant additional data and the ultimate implementation is unclear. The
goal is to improve the integration of new employees, reduces reliance on specific employees,
reduce turnover, and reduce injury or error rates.
Re-designing jobs in support of company initiatives needs to take both social and
technical factors into account. This can be done in two phases (Axtell et al. 2001). The first
phase starts with a participatory workshop focusing on work scenarios. The current situation is
19
benchmarked and new work scenarios are brainstormed. A selected list of work scenarios are
analyzed in terms of costs and benefits to come up with a final list of candidate scenarios.
These serve as input into the second phase – job design. Here responsibility matrices and
psychological criteria are developed for the roles in the scenarios. An impact analysis is part of
the process as well. If done successfully, this approach can increase the amount of self-
management by employees. It also can potentially connect work design to capital equipment
utilization and improve turnaround times on adoption of new technology. Workshops,
questionnaires, and interview tools should be adaptable to high tech environments. The
complexity of the process may require an expert facilitator and significant time commitment.
Supervisor trust is correlated with job satisfaction independently of work design
considerations. Increasing organizational trust can boost design of work improvements
(Cunningham and MacGregor 2000). Potential benefits include reduced abseentism, less
turnover, and increased productivity. I is believable the relationship between job satisfaction
and trust would hold universally even though literature case studies have not focused on
bioscience companies. An industry specific training plan could be developed to increase
managerial awareness of different aspects of trust (benevolence, predictability, and fairness).
Although not a central aspect, mechanisms to enhance trust could be part of an overall design
of work improvement program.
A multi-industry workplace study showed a positive correlation between high
involvement work practices (i.e., quality circles, feedback, task teams) and job satisfaction
(Mohr and Zoghi 2008). Even with some high involvement work practices in place, additional
efforts will continue to show a correlation with job satisfaction. These efforts also improve
20
signaling of job satisfaction from employee to supervisor. It is not clear, however, if the highly
skilled teams involved in drug discovery will show as strong a correlation as in the literature.
Another high involvement, high performance work practice is team self-management. This can
help with the successful implementation of even radical changes to design of work (Singer and
Duvall 2000). In one example manufacturing lead times were dramatically reduced through the
transformation of a traditional assembly line structure into interconnected self-managed work
groups. Process leaders can act as operational guides and mentors can replace managers.
These approaches are applicable to a drug discovery environment, particularly EMD Serono’s
“research pipeline” which can be modeled as a high tech, long time scale assembly line.
It is difficult for workers to fully integrate jobs that contain repetitive tasks, creative or
innovative work, and continuous improvement efforts. Company-wide quality programs such
as Total Quality Management (TQM) often fail due to poor integration of “dual” work roles by
frontline employees (Victor et al. 2000). Under TQM, workers are expected to “switch”
between standard production and continuous improvement work. Many workers seek to
minimize the discomfort of switching via avoidance of the continuous improvement portion.
Successfully integrating these roles reduces stress and increases satisfaction. Addressing the
duality upfront at the design of work stage and making the standard production as distinct as
possible are recommended strategies. There are likely many job classes at EMD Serono with
combinations of standard lab tasks and brainstorming-innovation work vulnerable task-
switching. These could be helped by proper redesign.
21
Relationship of Organizational Behavior to Worker Effectiveness
Three reasonable criteria for worker effectiveness are timeliness, acceptability, and
desirable (Nelson and Quick 2011, 328). There are many contexts within which to analyze these
criteria. Worker effectiveness can be gauged at the individual and team level. Teams can be
bundled together into departments or other business units and judged at that level. Finally,
there is the net bottom line of how effective the company is at achieving its objectives.
Therefore it is also important to analyze how worker effectiveness propagates through an
organization to manifest as overall company effectiveness.
This study focuses on three interconnected organizational behavior topics: performance
management, decision making, and design of work. This study is concerned with how changes
in these areas affect R&D teams in a drug discovery environment. Changes in each of these
areas affect worker effectiveness in unique ways. There is the potential for nonlinear effects.
Positive changes in one area can boost effectiveness gains in another. From a review of the
literature on each topic, there is an apparent build up of effectiveness from improvements to
work design through decision making up to performance management. Long product
development cycles with significant creative work means significant upside potential to
improvements in these areas.
Design of work is mainly concerned with directly helping employees integrate into their
positions. Adjustments are made based on the actual processes and sequences of tasks, as well
as taking into account social and individual personality realities as much as possible. Worker
22
effectiveness manifests at this level as reductions in missed work time, reduced turnover, and
increased task productivity.
Influencing decision making strategies among workers is more concerned about keeping
workers moving in the right direction for the company. Adjustments are made through
managers, leaders, and mentors modeling effective decision making approaches. This can be
done informally via coaching, formally through individual and group training, or structurally
through company systems – often computerized and automated (enterprise resource planning,
change control, failure mode effects analysis, expert review boards, quality control, etc.).
Worker effectiveness at this level is more about cost reduction, avoiding rework, and pushing
projects to completion.
Finally, performance management system improvements are concerned about providing
feedback to workers and allowing for iterative improvement. Changes to performance
management occur at three levels: the Human Resources level, the supervisor-employee
interface, and the leader-team interface. Performance management is where the
consequences of all changes and decisions in the company, positive and negative, are captured.
Traditionally, this information is captured over a long time frame (annually), highly bureaucratic
(significant paperwork and HR involvement), and is one-sided (supervisor tells individual
employees their performance “grade”). Changes can be made to the physical performance
management process as well as how managers, teams, and individuals interact. The timing of
performance feedback can be adjusted as well. Worker effectiveness at this level is about
23
information transmission, the accurate capture of the current state, and positive changes to
worker (or team) behavior.
Analysis of EMD Serono, Inc.
Background and Industry
EMD Serono, Inc. was founded in 1981 as Serono, Inc. in Rockland, MA. The
company became a subsidiary of Merck Serono, a multinational conglomerate, in 2007 (EMD
Serono 2012). The company operated as an affiliate of Merck KGaA, Darmstadt, Germany.
Merck KGaA and Merck & Co. in the US are different companies, which is the reason for the
naming distinction for the US affiliate. The parent company recently closed the main Swiss
headquarters, moving EMD Serono and US operations to the forefront (MerckSerono 2012).
The company is privately held which makes it difficult to get affiliate or division level financial
data. Merck Serono as a whole has projected revenues of $5 billion. The trade names of some
of their most successful products are: Rebif, Gonal-f, Serostim, Saizen, and Egrifta (LinkedIn
2012).
EMD Serono currently has 1100 employees (700 in MA) and two facilities in the
metropolitan Boston area. Their second facility is a large research laboratory complex which
opened in 2011. Their new research facility in Billerica, MA opened on February 10, 2011. Its
purpose is to be a “hub” within the Merck global research organization. It cost $65 million and
created 100 new jobs. The company is located in a prime location for collaborations to boost
their internal research pipeline efforts. Some of their big name collaborators are: Harvard
24
University, Massachusetts General Hospital, and the MD Anderson Cancer Center. They also
enter into frequent joint ventures with startup biotech companies such as Theratechnologies,
Inc.
The company is in the biopharmaceutical industry and has a healthy number of products
in clinical trials and many more in a research pipeline. Their specialized therapeutic areas are
neurodegenerative diseases, fertility, endocrinology, and oncology. In addition, they have
recently announced plans to begin research into Parkinson’s disease and Lupus. They have two
product focus areas. The first is on new drugs that have the potential for application for
multiple conditions. Their other product focus area is new therapy delivery technologies such
as needle-free delivery systems. While these are a smaller portion of their portfolio, they are
strong demonstrations of the company’s innovation and commitment to helping end patients.
There have been significant new executive appointments in 2012 (Bloomberg
Businessweek 2012). These included new Senior Vice Presidents in Oncology and
Neurodegenerative Diseases and Rheumatology as well as a new Chief Medical Officer who also
takes on the role of Head of US Development. The company brought on a new President in
2011 (Biomedical Market Newsletter 2011).
The company has frequently been on many “best of” lists since its formation in 2007.
EMD Serono was one of Fortune’s “100 Best Companies to Work For” in 2012 (CNNMoney
2012), on Newsweek’s 2012 “Green Rankings” (The Daily Beast 2011), and on Working Mother’s
2011 list of “100 Best Companies” (Working Mother 2011). EMD Serono has also received
pharmaceutical industry awards for corporate social responsibility and management success
25
(EMD Serono 2012). Employees volunteer heavily and there are cancer prevention programs in
place supported by the company. The company’s new facility is a LEED “green” building
(Biomedical Market Newsletter 2011). The company is ISO 140001 certified.
Current State
An overview of the organizational hierarchy is given in Table 1. As previously
mentioned, there have been multiple new upper management and leadership team
appointments (Bloomberg 2012). Although the organization appears to have an
overabundance of levels in the hierarchy, in practice it splits in two with corporate activities
occurring mainly in levels 1-5 and R&D occurring in levels 6-10 (EMD Serono 2012). The official
leadership team consists of employees from levels 1-3. It is interesting that there are some
Vice Presidents more involved with strategic decisions than some Senior Vice Presidents. This
may be due to the relatively recent acquisitions by Merck leading to employees with legacy
titles or necessary incentives to bring the new division heads on board. This is not completely
unusual within companies with many divisions and products (Weigel 2012). Sales and
marketing are significant parts of EMD Serono’s efforts, so there are dual career ladders for
business managers and technical managers. Once into the R&D substructure within a division,
levels 7-10 can act flatter than they appear on paper due to the coordination and collaboration
required for any given research project.
Each of the new upper managers has different backgrounds and styles. There are two
that are particularly entrepreneurial and focused on innovation. Allene Diaz, EMD Serono’s
new Senior Vice President and Head of US Oncology comes from a cross-functional background
26
as a medical liaison (YouTube 2012). Her professional skill set is in sales and marketing and
medical affairs. She describes EMD Serono employees as friendly and helpful. She contrasts
this with other companies in the industry that she has worked for. She considers EMD Serono’s
underlying drive stems from the desire to support the patients. Her vision for her division is to
quickly rise to be in the top 10 of oncology players in the world. Craig Millian is the new Senior
Vice President and Head of US Fertility, Metabolic Endocrinology, and HIV. His background
includes taking products from the R&D through to the commercial stage. He is considers EMD
Serono’s value to be in its great products and exciting pipeline. He believes the new leadership
team has a global commitment to an increased US presence. His vision for his division is for it
to be a model organization and the industry. He is focused on finding new and innovative ways
to connect with patients.
After the mergers and corporate name changing of the recent past, there was a
company-wide restating of company values and a public recommitment to corporate
compliance. EMD Serono’s organizational behavior strengths and weaknesses come through in
the information gathered on employees operating below the upper management level. Positive
energy does come through in the employee communications, but it is not clear whether this is a
short term effect from all the recent corporate change or a long term trend in organizational
behavior.
The company’s recently updated values are: courage, achievement, responsibility,
respect, integrity, and transparency. Each of these corporate values can be connected to
organizational behavior related concepts. In some cases, the company has explicitly stated the
27
characteristics it wants employees to focus on for each value (EMD Serono 2012). Courage
connects with openness and is related to how the company communicates. Achievement is
both measured goal attainment, but also entrepreneurial decision making and personal
development. Responsibility is about trust and communication, specifically with customers and
patients. Respect is about openness and honesty which the company believes enables diverse
teams to be able to work together. Integrity is the act of following the new values.
Transparency is the involvement of all stakeholders in decision making.
Many employees at a variety of levels in the organization talk about their connection
and commitment to patients. Some connect this to the volunteer work they do and that EMS
Serono supports. EMD Serono has established a significant infrastructure of patient resources.
They provide education, onsite training to patients and nurses, and financial assistance in some
cases. They have call centers (MS Lifelines) and support groups (Fertility Lifelines).
This apparent focus on contributing to patients and society seems to influence research
pipeline decisions. Being patient-centered in product development can mean connecting the
right product focus to the right delivery device to the right patient services. One group leader
in fertility research is targets new therapies (product), targets inefficiencies (delivery), and
supports patients (YouTube 2012). His job consists of basic research, drug discovery, and
developing new technologies. This extensive vertical enrichment gives him what he calls a
“great working day”. In the same regard, a senior director in rheumatology mentioned the
company’s “deep expertise”.
28
Communication is mentioned frequently by employees. Their internal communications
manager says she aims for constant communication – good, bad, motivational, informal. She
states that a positive culture avoids communicating only bad or good news. A senior sales
analyst likes that groupthink is avoided in team decision making. She says that decisions are
backed up by analysis and science. She believes workers in communicator and facilitator roles
help support that.
Many employees job satisfaction from the professional development and personal
support services available at the company. Directors were more likely to phrase this as focusing
on employees in line with the company’s focus on patient support. The company has learning
academies onsite, talent succession and management planning programs, and offers executive
coaching. There are also occasional lunches with senior management. The company also has a
backup childcare program and an onsite gym. The company has recently experimented with six
week trial engagements for managers to try out new positions to ensure a good fit. At lower
levels, there are frequent special global projects and assignment rotation.
Group leaders and division heads were likely to mention the importance of academic
and industry collaborations. There were multiple specific references to the growing oncology
division in this regard. References were made to dedicated teams of academics and industry
working on new therapies using a three-pronged approach: direct and indirect cancer cell
therapies, as well as immune system boosting therapies.
29
Organizational Environmental Concerns
EMD Serono’s organizational environmental concerns are varied. There are economic,
political, sociocultural, and regulatory factors at play. The landscape of drug discovery is very
complex. Their research pipeline varies in output and has long lead times. This brings with it a
lot of inherent uncertainty. While the entirety of Merck Serono is profitable with billions in
revenue, there can be significant variation in profitability within divisions at the US affiliate. It is
difficult to get this level of financial detail from a private company. This is connected to political
and sociocultural concerns as well. EMD Serono keeps their executive compensation private
which is controversial to some.
Regulation is probably the biggest environmental concern for EMD Serono. They are
directly regulated by the FDA. Since the company conducts clinical trials of drugs as well as
producing delivery devices, they are regulated across multiple areas. There have been recent
legal issues regarding one of the company’s AID medications and its marketing
(Stopbiotechlooting 2012). They also were accused of knowingly using unlicensed diagnostic
devices in one of their products. The company ran afoul of FDA regulators both for these
instances and for accusations of bribery. Four executives were charged with one settling a civil
suit for $24 million and another receiving one year of probation after pleading guilty to a
misdemeanor.
The company has had to deal aggressively with these controversies. They replaced
many upper managers and retooled their leadership team. Their previous CEO of 20 years
stepped down recently as well. EMD Serono did pay out $44 million to the FDA in 2011 (EMD
30
Serono 2012). They were required to update their Corporate Integrity Agreement. Corporate
compliance is a new company focus. They hired a new corporate compliance officer and have
their general counsel as a member of the leadership team.
Recommendations
Performance Management
Overall, this study recommends taking the concepts from the literature further and
making them context-specific for drug discovery and R&D. Specifically this means
implementing a self-initiated performance review process that can be started at any time. As in
the literature, the process would start with employee comments and self-rankings. The goal is
to fully decouple modern performance management from the traditional annual performance
review cycle in order to synchronize it with the needs of the employee and their group. This
should speed up feedback turnaround (a common complaint at many organizations) and affect
more rapid positive behavioral changes.
The ideal system would be streamlined, project specific, and efficiently captured. To
this end, an electronic system needs to be in place similar to an Enterprise Resource Planning
(ERP) or Lab Management system. Essentially email based, the system is intended to be routine
and less stressful than traditional annual reviews. Employees can be motivated by training
upfront and by building in rewards for using the system (or consequences for avoidance).
Employees or managers could initiate a performance review process multiple times a year or
after specific events. The intent is to motivate frequent informal feedback sessions throughout
31
the year and better capture this time sensitive data. However, the system should have the
option for either party to escalate the formality of the process if necessary due to significant
events or project completions. The platform would allow for private or even anonymous input
from other team members and company employees. A numeric scoring system would be
attached to all input. Employees, managers, division heads, and corporate officers would have
different privacy restrictions. Employees may see only notes marked public or averaged
performance measures. Managers will be able to review private notes they have made
throughout the year. Division heads and corporate officers will have access to aggregation and
analytical tools to follow performance over time.
The system can be leveraged to foster healthy competition across the company.
Employees can be rewarded on absolute performance as well as for significant improvements
or singular achievements. The system turns both followers and leaders into consultants
entering progress updates and monitoring metrics as they go. This could foster an
entrepreneurial spirit and “personal branding” behavior.
Linking this new performance management system to an ERP system allows leaders to
link drug delivery outcomes to team and individual performance. Division heads could use this
combination of data sources to populate teams. Putting it all together with continuous
improvement creates a sort of “professional analytics” where everything is captured and used
to improve performance. This is the business analog to the growing personal analytics
movement (Wolfram 2012). The goal is to create a positive feedback loop. What work specific
people and teams do is influenced by where they have shown strong performance on in the
32
past. This is coupled to corporate decisions like outsourcing, core competency development,
and joint ventures.
Decision Making
The goal of decision making recommendations for drug discovery divisions at EMD
Serono is to increase entrepreneurialism. Entrepreneurial decisions are made with risk-reward,
launch success, target market, and time and resource constraints in mind. The literature gives
multiple examples of where “structured analysis” and discussion by a wide group of experts
improves and homogenizes decision making. It also raises employee awareness of
entrepreneurial factors.
One recommendation would be to send case studies and other professional challenges
from academic literature and current events out electronically. Rewards or incentives would be
used to induce employees to submit comments and analysis through the electronic
performance management system described above. Different groups could receive different
challenges. This would be way to foster an innovation mentality without requiring the time or
infrastructure of a “Google Friday” strategy. The next stage would be to use the same platform
for open innovation and crowdsourcing on current problems within the company. This
“innovation interpretation system” may require facilitator or liaison roles, possibly combined
with similar roles required for the performance management system. Workshops in structured
analysis, fostering creativity, and entrepreneurial thinking may also be appropriate.
33
Design of Work
In practice, changes to design of work will piggyback on the new performance
management platform. The main goal for design of work improvements is to help employees
move more quickly up learning curves on new tasks. This is specific to drug discovery groups
since the R&D costs and lead times are so great. Reduced technical training time and a wider
pool of experts is especially important in the context of a growing pharmaceutical company. A
second major goal is to help employees integrate their different tasks and roles to reduced
productivity hits from the task switching (or task avoidance).
A job rotation recommendation specific to high-tech companies would be for employees
to rotate between operations related tasks and analytical tasks. Operations tasks would be
tasks involved in the actual operation of analytical equipment while analytical tasks would be
the analysis of the data obtained from that equipment. If cross-training was consciously
incorporated into this job rotation strategy, job enrichment could result. A new cost-effective
and quantifiable version of 3M’s “15% time” could be had if employees were additionally
allowed to train to operate or analyze something new outside their normal work area on an
occasional basis. This would force intergroup communication and collaboration which would
have benefits when it came time to create new teams. It would also improve familiarity on
other group’s research challenges when it came time to collaborate on a structured analysis.
This is in essence a practical method for building innovation networks. This approach should
mesh well with the culture at EMD Serono where there the employees are highly skilled and the
research problems inherently multi-disciplinary.
34
Some “side effects” of implementing these recommendations are improved trust and
signaling. By having workers from different areas interact and rely on each other in formal and
informal ways trust will be established. Along with this interaction is the ability to capture
richer intergroup feedback in the performance management system. This helps send advance
signals to management about any problem areas or organizational mismatches.
Importance and Anticipated Benefits
There are major benefits to implementing a comprehensive employee driven
performance management system with the characteristics described previously. These include
improvements to performance review process parameters such as faster turnaround times on
feedback, rapid identification of problem areas, and greater information capture.
Improvements in these areas are correlated with improved worker productivity and
satisfaction. In addition, moving away from an annual performance cycle reduces the abrupt
increase in overhead and reduction in productivity at performance appraisal time. More
reliable and quantifiable performance results allow for tighter connection to company
objectives. It also allows for evaluating of iterative changes and improved accountability.
Fostering a culture of entrepreneurialism in decision making through a program of
supported structured analysis would also benefit a high-tech company of highly skilled workers
like EMD Serono. Entrepreneurial decision making is easier to align with company objectives
and easier to adjust through performance feedback. It is also has the unique combination of
generating more innovative ideas yet being more homogeneous when it comes to allotting time
and resources. Undiscovered superstars can stand out through their answers to company case
35
study challenges potentially faster than through their daily duties. Innovation and
crowdsourcing are potentially faster ways to solve tough multi-discipline technical problems
than standard project or team management.
There are also major benefits from the high-tech versions of job rotation and
enrichment suggested in the previous section. These benefits are quantifiable via more
traditional industrial engineering methods. More employees should be able to run more
equipment, more quickly, and with more proficiency. Managerial flexibility in job and task
assignment will increase. This can be quantified via operations research methods. Greater
facility with more tasks and roles should reduce task avoidance making the management of
quality initiatives more straightforward. Many employees would enjoy having the time and
autonomy to work on any project they choose. Doing so via an interdepartmental or
interdivisional cross-training program will more immediately benefit the company and requires
less cultural shift than a “Google Friday”. Also, since training logs and performance are
captured through the new performance management system, the benefits of this cross-training
are captured in real time. There are also the more cultural impacts of increased trust and rich
communication that occur when more people work together within an organization.
Implementation Planning
This study recommends a coordinated roll out of changes via expansion modules to
existing ERP or similar systems. The performance management system is the backbone of
implementing and tracking progress of all recommended changes. If there are no existing
36
companywide tracking systems on which to piggyback, then initial phases can be done via small
group training and email until an “app” or other system can be purchased or developed.
Table 2 gives a stage-gate overview of the proposed implementation process. It is
essentially the “build up” process from design of work to decision making to performance
improvement described previously in this study. There is some initial work on the performance
management system since it serves as the infrastructure for capturing progress across the
board. During stage 1, benchmarking the current status and inventorying equipment is
important for preparation purposes. For stage 2, the goal is to replicate the annual review
process but within an electronic system that is at least nominally employee initiated. The gate
for stage 2 will be open when manager and employee performance notes are captured within a
central framework electronically. It is expected that EMD Serono can leverage their ISO
systems for stages 2, 3, and 5. The gate for stage 7 (full implementation) is the generation of
usable productivity data from the system and evidence that managers are utilizing this
information in their groups (to assign projects, form teams, provide feedback to teams and
individuals). Since one of the main strengths of these recommendations is the potential for
iterative improvement, stage 8 and gate 8 are included explicitly to cover uptake analysis and
system revision.
The implementation Gantt chart in Table 3 assumes an organization with a mature ERP
system in place, which is likely the case at an organization of EMD Serono’s size. The initial
performance management framework could be in place by as early as Q2, 2013. The first
workshops and significant design of work changes will be visible by end of Q3, 2013. Decision
37
making workshops and full implementation of an employee driven review process should come
online by end of year 2013. The program should be fully implemented, reviewed, and in steady
state by end of Q2, 2014. These dates assume the hours and other resources can be allotted. It
is expected the critical decision related to implementation for management will be whether to
create and fill the new positions.
Cost-Benefit Analysis
Table 4 provides a preliminary high-level cost schedule for implementing this study’s
recommendations. It takes into account new roles required, installation and training time,
capital expenditures for new equipment, and changes to working expenses. While this study
has been careful to present a set of recommendations that increase the company’s ability to
track and quantify the effects of organizational behavior related changes, it is difficult to
estimate ahead of time. It is also difficult to quantify the value of increased operational
flexibility or increased likelihood of successful drug discovery. The new systems are designed
for iterative improvement to allow for realignment as projects and the organizational
environment change. For comparison, the low estimate (focusing primarily on direct out of
pocket costs) of bringing a new drug to market is $100 million (Angell 2004). The value of
discovering a successful new drug is near impossible to model. The cost schedule shows that
the costs of even an extensive implementation including creating multiple new positions are
minimal compared to new drug development costs. Therefore, even if these recommendations
have a marginal positive impact they will pay for themselves. The cost-benefit comparison
comes down to how big a boost the changes will have on the drug discovery to market success
rate.
38
Startup costs include the electronic performance management system itself, integration
into other corporate tracking systems, and training of use of the new system. Automated and
electronic Human Resource management systems exist. The system would likely require
additional facilitator and IT roles. Operating cost increases will mostly IT related. Over time,
the advantages of an electronic and rapid response system should reduce HR support and
bureaucratic overhead costs. Additionally, there would be no annual “shock” to productivity
and HR workload due to performance review deadlines.
Tables 5A and 5B show the estimated costs of implementation over time. The individual
cash flows are shown in Table 5A and cumulative costs are shown in Table 5B. It is clear the
driving costs of these recommendations are those associated with new positions required to
manage and support the efforts. $20,000 was used as the estimated cost of hiring each of
three new positions - one IT position, one facilitator, and one liaison (Ciccone 2012). The total
annual ongoing cost of this program is estimated to be less than $500,000. Considering this is
likely less than 10% of one executive’s salary and the number of employees that can be
impacted positively by this program, it is a minimal outlay for significant potential upside for
the company.
Conclusions
EMD Serono is in a state of change. They have undergone a recent rapid flux in their
organizational structure and upper management. They have implemented growth strategies in
at least two major divisions requiring new leadership and a culture shift. They have a new set
of corporate values and a new commitment to corporate compliance to go with their ongoing
39
commitment to their patients. There is significant potential for backsliding into the bribery and
ineffectiveness seen in the early 2000s. While their research pipeline is full of promising
candidates now, even a couple years without significant new leads will challenge their revenue
model. EMD Serono, and all mid-level biopharmaceutical companies with aspirations of being
global players, would benefit from the ability to more accurately connected individual
employee actions and output to corporate performance metrics. Research managers, directors,
and group leaders want the ability to create teams and manage projects with more
effectiveness. Individual scientists and technicians would benefit from being able to give and
receive feedback more quickly.
This study provides a series of recommendations to help EMD Serono connect design of
work improvements to upgraded decision making strategies within an overarching performance
management platform. Beyond the measurable improvements in productivity, innovation,
communication, and collaboration, these recommendations can help move EMD Serono to the
next level of organizational behavior. The recommendations are based on recent, empirical
case studies and summarize the direction of changes competitors are likely to be making.
Improving the effectiveness of a research pipeline is about generating synergistic effects
between direct labor, company “deep expertise”, and feedback (both technical and behavioral).
The uncertainty of drug discovery in the future will require the holistic, multi-level, multi-
parameter approach suggested here.
40
Recommendations for Future Study
Three recommendations for future study are an uptake analysis at the end of
implementation phase, an analysis of the impact of organizational behavior improvements on
drug discovery metrics, and expanded study of the coordination of organizational behavior
improvements with internal continuous improvement efforts. These recommendations are
based on the gaps in the literature uncovered during the literature review and what is likely to
have the most benefit for EMD Serono. An uptake analysis will allow any deficient areas to be
retooled, removed, or rolled back and will inform how future changes will be approached. Any
direct correlations between employee or team performance data and drug to market success
are hard to come by and immediately useful. Learning how to integrate performance
management with other quality improvement or efficiency programs should boost the
effectiveness of both.
41
Appendix
Table 1 – Organizational Hierarchy
Org Level Titles (Leadership Team)Level 1A PresidentLevel 1B CFO, SVP-Chief Medical Officer
Level 2 VP-General Counsel, SVP-Head of US Research and Global External Innovation, Head of HR, Head of Business Development-North America
Level 3 SVP-Oncology, SVP-Managed Markets, VP-US Communications, VP-Business Intelligence and Analytics
Level 4 SVP-Head of US Fertility, Metabolic Endocrinology, & HIV, VP-Strategy and Management Process
Level 5 VP-Government Affairs, Chief Compliance OfficerLevel 6A Divisional VPsLevel 6B Divisional HeadsLevel 7 Department Directors Level 8 Group Leaders, Associate DirectorsLevel 9 Senior Technical Staff, Team ManagersLevel 10 Technical Staff, Business StaffLevel 11 Support Staff
42
Table 2 – Stage Gate Overview of Implementation
43
Table 3 – Gantt Chart of Implementation
44
Table 4 – Cost Schedule of Implementation
Event Date Est Labor Est (h) Cost Est ($) FreqBenchmark current metrics 1-Dec-12 20 1000 onceInventory equipment 1-Dec-12 10 500 onceReview current PM system 1-Dec-12 10 500 onceDevelop preliminary change plan 1-Dec-12 40 4000 onceEnumerate tasks by each employee 30-Jan-13 100 5000 onceReview job descriptions 30-Jan-13 50 2500 onceReview training logs 30-Jan-13 10 500 onceHire for additional IT position 1-Mar-13 20000 onceImplement annual electronic performance review system 1-Mar-13 200 10000 onceNew IT position 1-May-13 10000 monthlyReview usability of electronic performance review system 1-May-13 50 2500 onceEnumerate current team structures and networks 1-May-13 20 1000 onceInitiate Scenario and Job Tools workshops 31-May-13 60 3000 annuallyDevelop preliminary cross-training plan 31-May-13 20 1000 onceHire for additional facilitator and liaison positions 31-May-13 40000 onceSend out decision making strategy questionnaire 1-Jul-13 10 500 onceSend out test case study for structured analysis 1-Jul-13 10 500 onceNew facilitator and liaison positions 1-Jul-13 20000 monthlyConduct regular structured analyses 31-Aug-13 20 1000 bi-monthlyHold decision making workshops 31-Aug-13 50 2500 bi-annuallyEmployee driven performance review process 1-Dec-13 200 10000 onceCorrelation of performance rankings and productivity 1-Dec-13 50 2500 onceConduct uptake analysis 1-Mar-14 50 2500 onceInterview managers regarding decisions under new system 1-Mar-14 50 2500 annuallyReview changes in company level metrics 31-May-14 50 2500 annually
45
Table 5A – Costs vs. Time for Implementation
1-Dec-
12
1-Feb-13
1-Apr-1
3
1-Jun-13
1-Aug-1
3
1-Oct-
13
1-Dec-
13
1-Feb-14
1-Apr-1
4
1-Jun-14
1-Aug-1
4
1-Oct-
14
1-Dec-
14
1-Feb-15
1-Apr-1
5
1-Jun-15
1-Aug-1
5
1-Oct-
15
1-Dec-
150
10000
20000
30000
40000
50000
60000
Implementation Costs
Date
Cost
by
Mon
th ($
)
Table 5B – Cumulative Costs vs. Time for Implementation
1-Dec-
12
1-Feb-13
1-Apr-1
3
1-Jun-13
1-Aug-1
3
1-Oct-
13
1-Dec-
13
1-Feb-14
1-Apr-1
4
1-Jun-14
1-Aug-1
4
1-Oct-
14
1-Dec-
14
1-Feb-15
1-Apr-1
5
1-Jun-15
1-Aug-1
5
1-Oct-
15
1-Dec-
150
200000
400000
600000
800000
1000000
1200000
Cumulative Implementation Costs
Date
Cum
ulati
ve C
ost (
$)
46
References
Angell, Marcia. 2004. The Truth About the Drug Companies.” The New York Review of Books,
July 15. http://www.nybooks.com/articles/archives/2004/jul/15/the-truth-about-the-
drug-companies/?pagination=false.
Aryanezhad M.B., Mirzapour Al-E-Hashem S.M.J., Kheirkhah A.S., and Deljoo V. 2009.
"Designing safe job rotation schedules based upon workers' skills". International Journal
of Advanced Manufacturing Technology. 41 (1-2): 193-199.
Axtell, Carolyn, Kathryn Pepper, Chris Clegg, Toby Wall, and Peter Gardner. 2001. "Designing
and evaluating new ways of working: The application of some sociotechnical tools."
Human Factors & Ergonomics in Manufacturing. 11 (1): 1-18.
Bloomberg Businessweek. 2012. “EMD Serono Inc.: Private Company Information.” Accessed
August 24. http://investing.businessweek.com/research/stocks/private/ snapshot.asp?
privcapId=1245895.
Bloomberg. 2012. “EMD Serono, Inc. Strengthens Leadership Teams with New Appointments.”
Accessed September 20.
http://www.bloomberg.com/article/2012-06-14/aHhmipqVdqr4.html.
Ciccone, Alicia. 2012. “The True Cost Of Hiring Employees (INFOGRAPHIC).” Accessed
September 29. http://www.huffingtonpost.com/2012/06/04/the-true-cost-of-hiring-
infographic_n_1568295.html.
CNNMoney. 2012. “100 Best Companies to Work For.” Accessed August 23.
http://money.cnn.com/magazines/fortune/best-companies/2012/full_list/.
47
Cohen, Carl M. 2003. "A path to improved pharmaceutical productivity. (Viewpoint essay)."
Nature Reviews Drug Discovery. 2 (9): 751-753.
Coleman, Thomas, and Todd Chambers. 2005. "Serono case study: global performance,
evaluations, and compensation (using information technology to manage data)."
Compensation and Benefits Review. 37 (4): 61-65.
Cowlrick, Ivor, Thomas Hedner, Roland Wolf, Michael Olausson, and Magnus Klofsten. 2011.
"Decision-making in the pharmaceutical industry: Analysis of entrepreneurial risk and
attitude using uncertain information." R&D Management. 41 (4): 321-336.
Crane, Jeffrey S. and Nonna K.Crane. 2000. "A multi-level performance appraisal tool: transition
from the traditional to a CQI approach." Health Care Management Review. 25 (2): 64-73.
Cunningham, J. Barton, and James MacGregor. 2000. "Trust and the design of work:
Complementary constructs in satisfaction and performance." Human Relations. 53 (12):
1575-1591.
The Daily Beast. 2011. “Newsweek Green Rankings.” Accessed August 23.
http://www.thedailybeast.com/newsweek/features/green-rankings/2011/us.html.
Duberley, Joanne, Phil Johnson, Catherine Cassell, and Paul Close. 2000. “Manufacturing
change: The role of performance evaluation and control systems.” International Journal
of Operations & Production Management 20 (4): 427-440.
EMD Serono. 2012. “About us.” Accessed August 24.
http://www.emdserono.com/en/about_us/about_us.html.
EMD Serono. 2012. “Research Pipeline.” Accessed August 24.
http://www.emdserono.com/en/research/Pipeline/research.html.
48
"EMD Serono, Inc. announces appointment of James Hoyes as President." 2011. Biomedical
Market Newsletter. July 21.
"EMD Serono, Inc. Receives Gold LEED Rating." 2011. Biomedical Market Newsletter. May 5.
Hage, Jerald, and J. Hollingsworth. 2000. "A Strategy for the Analysis of Idea Innovation
Networks and Institutions." Organization Studies. 21 (5): 971-1004.
Heslop, Julian. 2008. "Discussion of 'Does Measuring Intangibles for Management Purposes
Improve Performance? A Review of the Evidence (Critical essay)." Accounting and
Business Research. 38 (3): 273-274.
Hu, Jia, and Robert C. Liden. 2011. "Antecedents of team potency and team effectiveness: An
examination of goal and process clarity and servant leadership." Journal of Applied
Psychology. 96 (4): 851-862.
Kroon, Brigitte, Karina Voorde, and Jules Timmers. 2012. "High performance work practices in
small firms: a resource-poverty and strategic decision-making perspective." Small
Business Economics. Accessed September 7. doi:10.1007/s11187-012-9425-0.
Lancaster, Osbert, Jon Ralls, and Christoph Bey. 1998. The Triple Bottom Line: The Challenge of
the New Industrial Revolution. Edinburgh: Centre for Human Ecology.
Linkedin. 2012. “EMD Serono, Inc.”Accessed September 29. http://www.linkedin.com/
company/emd-serono-inc.
MerckSerono. 2012. “Home.” Accessed September 29. http://www.merckserono.com/
en/index.html.
Mohr, Robert D., and Cindy Zoghi. 2008. "High-Involvement work design and job satisfaction."
Industrial and Labor Relations Review 61: 275-296.
49
Nelson, Debra L., and James Campbell Quick. Organizational Behavior: Science, the Real World,
and You. Mason: South-Western Cengage Learning, 2011.
Nicholson N. 2010. "The design of work-an evolutionary perspective." Journal of Organizational
Behavior. 31 (2-3): 422-431.
Singer, Joe, and Steve Duvall. 2000. "High-performance partnering by self-managed teams in
manufacturing." Engineering Management Journal. 12 (4): 9-15.
Snowden, David F., and Mary E. Boone. 2007. "A leader's framework for decision making: wise
executives tailor their approach to fit the complexity of the circumstances they face."
Harvard Business Review. 85 (11): 68-76.
Stopbiotechlooting. 2012. “EMD Serono Exposed!!!” Accessed September 29.
http://www.stopbiotechlooting.org/emd_serono.htm.
Tuominen, Matti, Arto Rajala, and Kristian Moller. 2000. "Intraorganizational relationships and
operational performance." Journal of Strategic Marketing. 8 (2): 139-160.
Victor, Bart, Andrew Boynton, and Theresa Stephens-Jahng. 2000. "The Effective Design of
Work Under Total Quality Management." Organization Science. 11 (1): 102-117.
Weigel, Herb. 2012. Vice President of Manufacturing, ZPower, LLC. Personal Communication.
Wolfram, Stephen. 2012. “The Personal Analytics of My Life.” Stephen Wolfram Blog, March 8.
http://blog.stephenwolfram.com/2012/03/the-personal-analytics-of-my-life/.
Working Mother. 2011. “2011 Working Mother 100 Best Companies.” Accessed August 23,
2012. http://www.workingmother.com/best-companies/2011-working-mother-100-
best-companies.
50
YouTube. 2012. “emdserono’s channel.” http://www.youtube.com/user/emdserono. Accessed
September 24, 2012.
51
