Driving Cultural Integration after a Driving Cultural Integration after a F 100 MF 100 MFortune 100 MergerFortune 100 Merger

Wendy Heckelman, Ph.D., WLH Consulting, Inc.Wendy Heckelman, Ph.D., WLH Consulting, Inc.wendy@wlhconsulting.comwendy@wlhconsulting.com

Lisa BrooksLisa Brooks--Greaux,Greaux, Ed.DEd.D, Pfizer Animal Health, Pfizer Animal HealthLisa BrooksLisa Brooks Greaux, Greaux, Ed.DEd.D, Pfizer Animal Health, Pfizer Animal HealthLisa.BrooksLisa.Brooks--Greaux@Pfizer.comGreaux@Pfizer.com

OD Network Annual Conference 2010OD Network Annual Conference 2010New Orleans, LANew Orleans, LA

Session OverviewSession Overview

Case Study Overview - Business Challenges Need for a Cultural Integration PlanNeed for a Cultural Integration PlanPresentation of Pfizer Animal Health – Wyeth Fort Dodge Integrationg gHighlights of the cultural integration cascade plan Interactive discussion on:Interactive discussion on:

Pitfalls and obstaclesLessons learnedLessons learnedSustainability

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Why Mergers Fail?Why Mergers Fail?

Approximately 60 - 70% of all mergers and acquisitions fail due to:

Conflicts in corporate culturesLack of leadership capabilitiesP r t m p rf rm n nd ll b r ti nPoor team performance and collaborationUnclear reporting structureInadequate realignment effortsadequate ea g e t e o tsInadequate communicationsWeak management practicesClashing management stylesKey management losses

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Reasons for the Merger with WyethReasons for the Merger with Wyeth

Advances core mission of applying innovative science to improve world health (includes animals)p ( )Enhances revenue potential resulting from:

Access to late state drug pipelineAccess to late state drug pipelineEnhanced capability to bring new product to marketExpand into new marketsExpand into new markets

Increases significant cost savings from:Risk reduction in research and developmentRisk reduction in research and developmentLeveraging Pfizer’s scale

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Pfizer Animal Health OverviewPfizer Animal Health Overview

One of the largest Animal Health companies in One of the largest Animal Health companies in the worldthe worldthe worldthe worldOver 5000 employees globallyOver 5000 employees globallyDi i i i l dDi i i i l dDivisions include:Divisions include:

LivestockLivestockPorkPorkPoultryPoultryEquineEquineCompanion AnimalCompanion Animal

The Presenting SituationThe Presenting Situation

Competitive Marketplace Company valuation – stock priceEconomic downturn

External Marketplace

Challenges Industry specific challenges (drought, depressed milk prices)

Challenges

I l

Pressures from larger parent organizations (Pfizer & Wyeth)Different operating structuresDifferent customer approach Internal

Challenges

Different customer approachMerger announced following major corporate restructuring and cost containment

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Challenges Facing a New Team Challenges Facing a New Team d C Pitf lld C Pitf lland Common Pitfallsand Common Pitfalls

Bringing team members together can result in:MisunderstandingMisdirectionMisdirectionLack of confidence in leadershipE h iliEven hostility

Building any new team is a challenge even without the added pressures of business performancep f p f

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Breakout #1: Pitfalls & ObstaclesBreakout #1: Pitfalls & Obstacles

Activity: Use self-managed groups to discuss the f ll i ifollowing question:

Having heard the presenting situation, what are th pitf ll d b t l th t ld d t bthe pitfalls and obstacles that would need to be overcome?

What are other pitfalls and obstacles you have experienced?

Reports: Due in 5 minutes

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Overall Goals for Cultural Integration Plan

Create a single culture, focused on Pfizer’s Mission and Values; taking the best from both organizationsCreate shared beliefs and experiences throughout theCreate shared beliefs and experiences throughout the organizationHelp teams positively address changes in structure, p p y g ,systems, external environmental forces, and expectationsClarify roles and responsibilitiesDevelop a planned cascade to:

Share “core beliefs”B ild t t d d ti i tiBuild trust and open, productive communicationIdentify what needs to happen to drive operational efficiency Determine priorities and build action plansp pEnsure results are achieved

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Cultural Transformation Roadmap

Share Core Beliefs & Develop Action

Plans

Reinforce PAH Core Beliefs

Plans

Managers with their Teams 4

National Sales Meeting5

their Teams

Cascade and Build

Commitment

Align On Core Beliefs and

Strategic Direction

Field Managers’ Meeting

3

S LT Ali

Define PAH Core BeliefsBU Leadership

Team 2

10/02/2009

–2:30p

m

Sr. LT Alignment on Integration Execution Plan

1

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What is Organizational Culture?

Organizational Culture is Comprised of Organizational Culture is Comprised of

WhatWhat People Do (How They Act) andPeople Do (How They Act) and

Why Why They Do It (How They Think)They Do It (How They Think)

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Understanding Organizational Culture

Every organization has a culture!A culture forms whether you’re conscious of it or notThe organization’s culture will create its resultsThe question is whether or not the culture isThe 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!

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The Results Pyramid (the “BEAR” Model*)(the BEAR Model )

R = What people do (how they act) causes

*Roger Connors, Tom Smith.Journey to the Emerald City

A

R What people do (how they act) causes an outcome/results

Results

A = The beliefs people hold cause them to act and behave in a particular way

Actions

E = Experiences help to shape beliefs

Experiences

B = Beliefs define what a person values, prioritizes, and motivates what they

Beliefs

Organizational Culture

do and why

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Why Do Typical Efforts Fail Or Are Not Sustained?Or Are Not Sustained?

AA ii

RResultsesults

AActionsctions

EExperiencesxperiences

BBeliefseliefs

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Alignment Between Culture and Results

Without AlignmentWithout AlignmentWith AlignmentWith Alignment

Results

Actions

Experiences

Beliefs

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Team DefinedThe Foundation of Our Culture

Accountability toAccountability toDrive ResultsDrive Results

Innovation for GrowthInnovation for Growth

CustomerCustomer--CentricCentric

Excellence inExcellence inColleague DevelopmentColleague Development

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Our Beliefs: The Foundation of Our Culture

Accountability toAccountability to

We consistently practice the Oz Principle –

Drive ResultsDrive Results

We co s ste t y p act ce t e O P c p e“See it, Own it, Solve it, Do it”“See it, Own it, Solve it, Do it”

We continually ask ourselves “What elseWe continually ask ourselves, What else can I do to achieve the desired results?”W b li th t h d i lt iWe believe that how we drive results is as important as the result itself — integrity integrity

tt !tt !

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matters!matters!

Creating Experiences

Every interaction with a direct report or a customer creates an experiencecreates an experience

Nothing impacts the prevailing beliefs more than experiences

A

Results

Conscious and consistent application of the right set of experiences shapes beliefs

Actions

p pExperiences must be specifically targeted to foster the desired beliefs

L d ibl f

Experiences

Leaders are responsible for: IdentifyingCreatingEvaluating Experiences

Beliefs

Evaluating Experiences

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Actions Others Will Take

What people believe determines their actions (what

Resultspeople do/how they behave)

If people are not taking the right actions leaders need to

Actionsright actions, leaders need to examine the experiences they are creating (“Always lead first

ith i ”)Experiences

with a mirror”).

If you work hard at creating experiences that support

Beliefsp pp

beliefs, the right actions follow naturally!

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Linking our Beliefs to Desired Results

Outpace the market and achieve our financial commitmentsAccountability toAccountability to

Drive ResultsDrive Results1

Generate revenue by offering additional value-InnovationInnovation 2 added services

Most valued and relevant animal health

InnovationInnovationfor Growthfor Growth

2

Most valued and relevant animal health company in the eyes of the customerCustomerCustomer--

CentricCentric3

Employer of choice: attract, develop, and retain talent

Excellence inExcellence inColleagueColleague

D l p tD l p t

4DevelopmentDevelopment

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Building PAH’s Culture

USLTBusiness Unit

L dLeaders

US Ops

Functions : Marketing, Business O i

MastersOperations, Legal

Turning the “Flywheel”g y

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OutcomesOutcomes

Agreed to CORE beliefsAgreed to CORE beliefsImproved cross-functional collaboration and alignmentI d i ti th h t th i ti

OrganizationalOrganizational

Improved communications throughout the organization

Leaders shared commitments regarding the beliefs and

TeamTeam

g gspecific “experiences” they would createExpectations were clearly communicated to new teamsImproved prioritization of sales efforts at targeted accountsClarity on team objectives and tactics

IndividualIndividualClarity regarding organizational beliefsDirection to “act” in alignment with strategy and intended results

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Business ImpactBusiness Impact

Greater alignment between sales and marketing in getting new products to customers in line withgetting new products to customers in line with customer buying cyclesFaster, more focused product launches to beat , pcompetitors to the marketplaceIncreased revenue streams from targeting priority g g p yand potential customersShorter sales cycles with loyal priority customersGreater productivity and field effectivenessHigher long-term profits from loyal customers

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Breakout #2: Breakout #2: Offering RecommendationsOffering Recommendationsgg

Activity: Use self-managed groups to discuss:Lessons learned from similar cultural integration efforts.

Wh l OD i i (i llWhat role OD practitioners (internally or externally) can play in ensuring a successful integration?

What sustainability tools can be used to ensure continued success and results achieved?achieved?

Reports: 10 minutes

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Lessons Learned RegardingLessons Learned RegardingMerger IntegrationMerger Integrationg gg g

Understanding the viewpoint of remaining employeesThink about how it feels to be acquiredThink about how it feels to be acquiredEmployee retention is critical to the success of most mergersmergersBe sure communications are received and understoodCommunicate often – you can never over communicateTell people as much as you can as soon as you canNever underestimate the hunger for informationHandling termination issues properly pays off on many g p p y p y ylevels

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Every Tree Casts a Shadow

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QuestionsQuestions

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Contact InformationContact Information

Dr. Wendy Heckelman, PresidentWLH Consulting, Inc.

Lisa Brooks Lisa Brooks –– GreauxGreaux, , Senior DirectorLearning & Developmentg,

2703 Cypress ManorSuite 100Fort La derdale FL 33332

Pfizer Animal Health5 5 GiraldaGiralda FarmsFarmsMadison, NJ 07940Madison, NJ 07940Fort Lauderdale, FL 33332

954-385-0770

, J, J973973--660660--76597659

@@wendy@wlhconsulting.comwendy@wlhconsulting.comCoCo--presenter:presenter:Sheryl Unger Sheryl Unger

Lisa.BrooksLisa.Brooks--Greaux@pfizer.comGreaux@pfizer.com

y gy gsheryl@wlhconsulting.comsheryl@wlhconsulting.com

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