Enabling Real Business Outcomes Through Employee Engagement
As told from the point of view of the General Manager
Sanofi is the largest pharmaceutical company in Europe and the fourth largest worldwide. It has a staff strength of nearly 110,000 employees in over 100 countries. As a global integrated healthcare leader , it focuses on fulfilling patients’ needs with a diverse offering of medicines, vaccines and innovative therapeutic solutions. The Group’s vaccine division, Sanofi Pasteur, is the world leader for human vaccine production and commercialisation.
Sanofi has core strengths in the field of healthcare: a worldwide presence, market leadership in vaccines, major biological products and a strong and long-established presence in emerging markets. Company business activities also include consumer healthcare products, generics and animal health products.
Employee engagement—Why does it matter?
David Guest, a Professor in Organisational Psychology and HR at King’s College London defined employee engagement as “a workplace approach designed to ensure that employees are committed to their organisation's goals and values, motivated to contribute to organisational success and able at the same time to enhance their own sense of wellbeing.” Employee engagement has been linked with positive business outcomes such as stronger commitment and reduced employee attrition (Lockwood, 2007), greater productivity (Watson Wyatt Worldwide, 2002) and better financial performance (Harter, Schmidt, Killham & Agrawal, 2009). In fact, employee engagement has been accepted in recent years as a leading indicator of financial performance, given its strong impact on business outcomes. (Gallup, 2011)
This success story specifically details Sanofi’s transformational journey with PACE towards creating greater employee engagement.
Kotter's 8-Step Process for Leading Change
The 8-Step Process for Leading Change is a model based on Dr. John Kotter’s thirty years of research on organisational change efforts. It provides a holistic approach through clearly-defined steps designed to help organisations become adept at change and increase their chances of success.
STEP 1: ESTABLISHING A SENSE OF URGENCY
Help others see the need for change and they will be convinced of the importance of acting immediately.
When Leah Goodman first assumed the role of General Manager of Singapore, Malaysia and Brunei in 2011, she quickly discovered certain issues within the leadership team that suggested a lack of engagement. She saw a group of leaders that was struggling to come together as a team, as what defined their success was the performance of their individual business units. It seemed like their focus was on the small picture, instead of looking at the success of the company as a whole. The monthly management meetings were more of an avenue to discuss routine, operational matters, than an opportunity to discuss strategic plans. Some of the leaders even viewed the meetings as a mere formality, never bothering to contribute to the discussion. This lack in commitment to organisational goals was representative of their disengagement as leaders.
Furthermore, the leadership team would have lapses of unfavourable behaviours. Using terminology from The Life Styles Inventory™ (LSI), nearly half of the team exhibited the “red” style, placing an overt emphasis on tasks over people, while the rest were “green”, meaning they placed an excessive priority on people compared to tasks. The former made business decisions that focused on their own needs instead of the interests of the people, and were even on occasions hostile towards others. The latter did their job but never understood really why they were doing it. From an engagement perspective, these types of behaviours were detrimental to the business as it meant that the leaders were not reaching their maximum effectiveness in directing their constituents strategically.
“PACE was engaged as an external consultant to conduct in-depth diagnosis to pinpoint the reasons for the weak engagement. More than 300 employees were asked for their honest feedback about the leadership team and the organisation through 20 employee insight sessions.
While these were signs that the leadership team needed some guidance to recalibrate their focus and behaviours, there was also indication that employees at the other levels were not being engaged fully by Sanofi. According to the results of an organisation-wide Employee Engagement Survey, the employees had low levels of engagement with the organisation. PACE was engaged as an external consultant to conduct in-depth diagnosis to pinpoint the reasons for the weak engagement. More than 300 employees were asked for their honest feedback about the leadership team and the organisation through 20 employee insight sessions. The consolidated inputs revealed that the low engagement level was attributed to poor engagement by the leadership team. One common feedback was that the employees associated the leadership team with Leah alone, as the other directors did not interact with the constituents as often. This meant that the other leaders had to put in more effort to engage all employees.
The lack of employee engagement contributed to other issues. For example, there was little collaboration within the Business Units. Sanofi’s marketing and brand plans were created by marketers who had no interaction whatsoever with the other teams. This was clearly a dysfunctional way of operating since the business units had to be accountable for sales performance despite not being engaged in a large part of the process (i.e. the marketing process).
Moreover, no serious thought had been given to the long-term sustainability of Sanofi. Leah noted that the leadership team looked inwardly but not outwardly, resulting in a disconnect with the market.
Succession planning was an issue as well since it was not part of the organisational culture to develop talents. This meant that there was no pipeline of Managers and Supervisors ready to assume a leadership role whenever a vacancy arose. As a result, internal promotion to top management roles was not common, impacting employee morale as they felt like they were not given ample opportunities for career progression.
These were all issues that, if left unresolved, would hinder the business from progressing further in the long term.
STEP 2: CREATING THE GUIDING COALITION
Assemble a group with enough power to lead the change effort, and encourage the group to work as a team.
It became apparent that multiple changes had to be made to engage the leadership team immediately, so that they could form the guiding coalition to lead change efforts. Through a carefully calculated decision, Leah removed a few Business Unit Heads, who had been perpetually destructive due to their “red” style, and replaced them with people with great potential, both sourced internally and externally. To strengthen the leadership team further, Leah restructured certain parts of the organisation so that she could effectively increase the influence of certain leaders. For example, the Regulatory department was placed under the Medical Business Unit so that the Medical director could lead a larger segment of the organisation.
“PACE conducted a 2-step management team programme to strengthen the leadership team as a driving force for the change efforts.
PACE conducted a 2-step management team programme to strengthen the leadership team as a driving force for the change efforts. The first step was with the Management Team itself to ensure accountability of the feedback by each Director for their business area. This was followed immediately by an Organisation Development (OD) solution with the top 40 leaders of the overall business, and consisted of action planning for the team, where they were asked to create cultural plans for their individual Business Units. Not only did the plans map out the specific business activities and outcomes expected of each Business Unit, but it also prompted them to be explicit about the ways they intended to build up engagement within their teams. To top it all off, the team was equipped with change management competencies, so as to be ready to champion the changes.
Another way in which Leah transformed the leadership team was through the LSI. After the leaders had their styles diagnosed, they were then tasked with crafting development plans to improve their leadership behaviours. This was the start of the journey for several directors, who were able to emerge from their shells as they became more aware about how they were leading their constituents.
STEP 3: DEVELOPING A CHANGE VISION
Create a vision to help direct the change effort, and develop strategies for achieving that vision.
By resolving those immediate issues within the leadership team, the team was better able to collaborate towards ensuring the affiliate Vision was aligned with the feedback and Critical Success Factors (CSFs), and so would guide Sanofi towards its ideal state.
In 2011, Leah had invited members of the Singapore Economic Development Board and representatives from the Malaysian government to share their vision for Malaysia in the next five years. By listening to these differing points of view on the future environment, the leadership team was then able to discuss and come to a consensus on where they wanted Sanofi be in five years’ time.
Sanofi's Four Strategic Pillars
“From this process, the leadership team launched in 2012 the ASPIRE vision, which not only included the Vision for Sanofi Malaysia, Singapore and Brunei, but also the Promise, Strategic Pillars and the corresponding Building Blocks.
From this process, the leadership team launched in 2012 the ASPIRE vision, which not only included the Vision for Sanofi Malaysia, Singapore and Brunei, but also the Promise, Strategic Pillars and the corresponding Building Blocks. The four Strategic Pillars—Leadership, Clarity, Collaboration and Customers—were defined within roles as individual contributors and people managers, so as to provide clear direction on what was expected from each employee.
Post the engagement survey feedback in 2014, in order to crystallise the ASPIRE vision into concrete deliverables, the leaders were tasked with creating a cultural plan for their individual departments, based on the CSFs defined from the engagement survey feedback workshops. This plan made individual leaders accountable, as they formulated plans on how they planned to push their team towards achieving business results and build up engagement with their teams.
STEP 4: COMMUNICATING THE VISION FOR BUY-IN
Make sure as many as possible understand and accept the vision and the strategy.
“The Management Team ran a series of workshops across seven brand teams to help them understand how to build a brand team and what being part of a brand team meant, thereby aiding in internalisation of the ideal behaviours.
To enable the ASPIRE vision throughout the organisation, Sanofi established four workstreams: Brand Team Functionality; Process & Policy Improvement; Stakeholder Management; and Reward & Recognition. These were areas identified as being critical for alignment with the Vision. For example, the Management Team ran a series of workshops across seven brand teams to help them understand how to build a brand team and what being part of a brand team meant, thereby aiding in internalisation of the ideal behaviours. In particular, with “Collaboration” as one of the Strategic Pillars defined in the ASPIRE vision, it was crucial that the different units and teams within the organisation were able to work together to produce synergistic outcomes. The employees went through a process where they thought it was all about physically meeting as a team, but now they realise that it is about the collaborative behaviour that results from recognising that others can benefit from information sharing. There was greater engagement and ownership when everybody in the team contributed to the development of the brand plans.
One other issue that came up during the insight sessions was that the vision was often associated with Leah alone. It seemed like there was little buy-in from the other leaders, thereby impacting how the members of the individual business units viewed the vision. To generate greater buy-in, Leah decided to do things differently in subsequent townhall meetings. She encouraged the other directors to address the employees so that the employees could clearly see them championing the vision.
The ASPIRE digest, a weekly electronic newsletter, has been a platform through which Sanofi communicates vital and ‘nice to know’ affiliate information organisation wide. Other than conveying news regarding events and activities within the organisation, it also relays details about new job openings. Employees appreciate the transparency as it creates equal opportunities for all.
STEP 5: EMPOWERING BROAD-BASED ACTION
Remove obstacles to change, change systems or structures that seriously undermine the vision, and encourage risk-taking and non-traditional ideas, activities, and actions.
To facilitate the change, there wasan urgent need for Processes and Policies (P&P) to be reviewed and redefined. In Sanofi’s Promise, the phrase “empowered team” was used to describe the Sanofi employees, yet the P&P were not aligned with this goal. One example was the policy that set a low threshold on the purchase orders in which directors needed to approve. This meant that even small decisions had to be escalated to the top, thereby contradicting the promise to empower employees.
“P&P like these were reviewed and realigned to the Vision and Promise. Ineffective processes were simplified while duplications were removed.
P&P like these were reviewed and realigned to the Vision and Promise. Ineffective processes were simplified while duplications were removed. Although there was a policy sub-committee, it was not innate within the vast majority of the employees to think about how things could be done better. What was needed was a proactive mindset—a frame of mind that had to be built and sustained.
To get timely feedback from the ground, Leah had regular coffee meetings with High Potentials (High Pos) and met up with the newly-established business teams once a week. As the new business teams (consumer healthcare and biosurgery) faced different issues compared to the traditional pharmaceutical business, there were many P&P that had to be adapted so as to enable those businesses. These regular sessions helped to facilitate two-way feedback on the P&P that could be changed.
To enhance the Strategic Pillar of “Clarity”, Sanofi launched its career management solutions, which maps out the technical and behavioural skills expected for each job role. Managers can now have structured and upfront conversations about their constituents’ career development plans, so as to identify gaps for further development. This has helped to clarify individual roles and responsibilities both for their current positions as well as for future promotions.
“Furthermore, a coaching culture is being inculcated, so as to empower the leaders to develop their constituents in a constructive and effective manner.
Furthermore, a coaching culture is being inculcated, so as to empower the leaders to develop their constituents in a constructive and effective manner. By recording their coaching sessions via video on the iPad, members of the leadership team are able to playback and critique each other’s coaching styles. To emphasise the need for coaching, the sales management team had their objectives redefined—coaching would take up 80% of their time at work. The sales managers had previously been accountable for the sales performance of the team; now, they are evaluated based on how they coach the team to achieve those sales targets.
The last Strategic Pillar, “Customers”, called for a greater understanding of all stakeholders, not just the traditional customer. As Sanofi had been very inwardly focused, there was a need to manage the external environment better to implement strategic decisions; essentially, this meant improving stakeholder management.
“This process meant examining and anticipating trends in the external environment (such as political, economic, social, technological, environmental and legal trends) through a structured approach, before evaluating if deliberate actions have to be made to deal with these challenges or capitalise on opportunities.
By having an external environment review led by the Public Affairs department at the start of every management team meeting, it enabled the leaders to be in tune with the stakeholders. This process meant examining and anticipating trends in the external environment (such as political, economic, social, technological, environmental and legal trends) through a structured approach, before evaluating if deliberate actions have to be made to deal with these challenges or capitalise on opportunities. The external environment review was also documented and passed on to the brand teams for more strategic decision-making. This area is something that Sanofi has been strengthening over the years.
As part of efforts to allow the organisation to stay in touch with “Customers”, a Business Intelligence unit was set up to provide relevant market data that was explained along with real business implications. A project management board was instituted as well, so as to drive new projects to completion and allow Sanofi to control its future better.
Leah personally became a role model for the other leaders. She spends time with the Sales Representatives (Reps) in their client meetings, so as to get an opportunity to interact with customers more. In fact, she has modifed her objectives so that 20% of her time is allocated to externally-facing activities. This could include time spent talking to customers, digesting market research data, or sitting on boards such as the Pharmaceutical Associations of Malaysia and Singapore.
One key issue that surfaced after interacting with customers was that there was a gap between what the market wanted and what Sanofi was providing. Customers were familiar with the established products and did not require technical sales for those drugs. On the contrary, they wanted clinical data on newer products such as Lantus and Renvela. However, the Reps focused on pushing sales for the drugs that took up a greater percentage of the portfolio (i.e. established products), providing technical sales for them instead of the newer products.
To enable more conducive interactions with customers, the business was restructured and categorised into: Established business, Specialised business and the ‘niche business’ of oncology & renal, plus both the Consumer Healthcare business and Vaccines business. The Established business unit had the biggest shift. Instead of operating on a product basis, this large business unit was structured based on the Customer Interface, therefore in Channels. It did not have product or brand managers; it had channel managers. This transformed the way customers viewed and interacted with Sanofi—all products were associated with the Sanofi level of quality and reliability. For distributors, establishing a working partnership with Sanofi meant a promise for a good profit margin. What was measured and celebrated was total sales and total profit of each business, not the individual sales of each product. To this effect, a separate Profit & Loss statement was generated for each business unit, as a way to measure the success of different units.
STEP 6: GENERATING SHORT-TERM WINS
Plan for achievements that can easily be made visible, follow-through with those achievements and recognise and reward employees who were involved.
Rewards and recognition, one of the Building Blocks, was necessary in ensuring that the employees were being rewarded for working towards the shared vision and for exhibiting the desired behaviours. Three awards were introduced: the ASPIRE Award, Team Award and Entrepreneurial Award. The first is an award with a small dollar value given to recognise those who excelled in their role. The second is aimed at boosting collaboration by presenting teams that contribute greatly to the business with €2000. The last award is meant for individuals with an entrepreneurial spirit.
“It also appeared that there was a problem in which the Reps were being recognised for their efforts; there was confusion in the way sales performance and management capabilities were being commended.
It also appeared that there was a problem in which the Reps were being recognised for their efforts; there was confusion in the way sales performance and management capabilities were being commended. According to the existing programme, Reps would progress from Level 1 to Level 3 based on performance. Once they reached a Level 3, they would immediately be in the pool of employees eligible for promotion. However, those within the pool often ended up disgruntled as they did not have the competencies to progress further, yet they were given that false hope. In short, this was the result of putting two disconnected objectives together.
To resolve this issue, recognition of stellar sales performance had to be separated from the recognition of management competencies. Sanofi launched a Sales Achievers’ Club where Reps would attain Gold status if they achieved more than 100% of their targets two years in a row and Platinum status if their sales exceeded 105% of targets for the same time span.
To incentivise the Reps further, it was decided that the reward should not be cash, but rather, an opportunity to receive “star” treatment. This reward package would include an extravagant dinner with Leah and the Vice President of South East Asia at a fine dining restaurant in the Petronas Towers. They would be picked up in a limousine, with a dedicated photographer to take photos of them the moment they stepped onto the red carpet for the night. The “star” treatment also included a night’s stay at Mandarin Oriental Hotel with cash vouchers for shopping. The Reps truly appreciated the change. Although they achieved the same target in the past, they had never been made to feel special. By taking away the dollar value rewards that were attributed to progressing from Level 1 to Level 3, Sanofi was able to demonstrate that each employee mattered, therefore creating greater employee engagement and motivation.
STEP 7: NEVER LETTING UP
Use increased credibility to change systems, structures, and policies that don't fit the vision, also hire, promote, and develop employees who can implement the vision, and finally reinvigorate the process with new projects, themes, and change agents.
To reinvigorate the leadership team, Leah brought them on an team-bonding nature retreat in Gopeng, Ipoh. The retreat aimed to allow the team to bond through activities that would put them out of their comfort zone, amplifying the way the team worked. They stayed at a camping site for three days and engaged in various exciting activities such as rock climbing, abseiling and rafting. In particular, a caving activity in which the team sat in a pitch black cave to have honest conversations proved to be very powerful. Not only did this process allow the team to be completely honest with each other to resolve any conflicts, but it also provided a platform for the team members to share personal stories. As a result, team members are learning to be more forgiving and appreciative of each other, making way for less judgement in future interactions.
The leadership team also ensured a certain level of adaptability by continuously tweaking policies to sustain employee engagement. For example, when Sanofi changed a payback component in the incentive scheme for Reps, there was great dissent from the line managers. In order to respect the employees views, the management team listened to these comments and reviewed the policy accordingly. Ultimately, this lead to greater engagement, as the employees witnessed the leadership team’s willingness to listen to their opinions.
“In line with continually injecting the organisation with innovative ideas, a new initiative was established to ensure that High Potentials (Hi Pos) do not remain in their jobs for more than two years. By creating a culture of flexibility, a fresh pair of eyes could continually challenge the way things are done.
In line with continually injecting the organisation with innovative ideas, a new initiative was established to ensure that High Potentials (Hi Pos) do not remain in their jobs for more than two years. By creating a culture of flexibility, a fresh pair of eyes could continually challenge the way things are done. Furthermore, this would increase the competencies of the Hi Pos as they get exposed to different job scopes and environments.
To ensure relevancy in the dynamic business environment, the ASPIRE vision has been revisited annually. It continues to play an important role in all strategic business decisions. Just last year, Communication was added to the Building Blocks. A “reason for being” was included to engage employees emotionally, adding meaning to why Sanofi exists. It was agreed that Sanofi exists to make lives better—be it for the people who are taking its products, their families and the people who work for Sanofi.
STEP 8: INCORPORATING CHANGES INTO THE CULTURE
Articulate the connections between the new behaviours and organisational success, and develop the means to ensure leadership development and succession.
Succession planning has been an issue of utmost importance. Leah and the Human Resources director, Felicia, conducted a two-year campaign to recruit new N-2 (the level of leaders directly below the directors). Now, there is an entire pipeline of leaders within Sanofi ready to assume leadership roles. This has also been supported by proactive development plans for each individual.
“The journey thus far has truly transformed Sanofi. It is by no means the end, for OD is a lifelong experience for any organisation.
To crystallise the employees’ new behaviours as part of the Sanofi culture, constant time and effort must be set aside to sustain and continually review the organisation’s systems, processes and people. The journey thus far has truly transformed Sanofi. It is by no means the end, for OD is a lifelong experience for any organisation.
Nevertheless, this transformational journey has resulted in:
Higher levels of engagement and trust between the leadership team and the employees
Increased effectiveness of the leadership team
Greater clarity and empowerment of employees
Better communication across teams and functions
Strategic focus on long-term organisational success through stakeholder management
Sanofi is striving for 100% engagement with the leadership team, a target that has almost been met. The culture of having honest conversations within the team has helped to surface previously unspoken issues that were hindering the team’s progress. Leah attests that she has the complete trust of the leadership team and next level down now. To continually enhance the team’s behaviours, the leadership team will go through the LSI every year.
With the help of an energised leadership team, Sanofi has managed to build up trust and engagement within the organisation, to the point where employees feel empowered to live out the Sanofi values. For example, employees have been able to voice out concerns about deals that were seemingly not in line with the values of the company. Employees do not simply perform routine tasks, but also have Sanofi’s best interests at heart as espoused by the company’s values.
“Employees have greater clarity, not just in their current roles and responsibilities, but also in terms of how they can contribute to Sanofi’s organisational success.
Employees have greater clarity, not just in their current roles and responsibilities, but also in terms of how they can contribute to Sanofi’s organisational success. They are now empowered through a strong understanding of their influence in the organisation and the knowledge that their views are being heard and respected by the leadership team.
Leah has noted a stark difference in the behaviours of employees. Given the Asian culture of having a high power distance with superiors, employees often simply go along with what the “boss” suggests without any questions. However, by empowering them and reinforcing the level of trust, employees feel at ease voicing out their opposing views respectfully. Such valuable contributions from employees at every level of the organisation is what is needed for organisational effectiveness.
There has been greater collaboration across teams and functions. For example, strategic reviews now involve teams such as management, regulatory and brand. This has enabled the leveraging of expertise and knowledge from each team, in the development of strategic plans that benefit Sanofi as a whole.
By engaging in stakeholder management, Sanofi has been able to stay in touch with its external environment, and thus their customers. More specifically, it makes way for strategic decision making that will benefit Sanofi in the long term.
PACE AS A PARTNER
PACE played an important role in this journey as an external consultant that facilitated Sanofi’s change efforts. Based on the results of the Employee Engagement Survey, there was a need for an experienced practitioner to gather honest feedback from the employees, so that the issue of low engagement could be resolved at its root. Given the sensitive nature of this issue, it was essential that the external consultant had the tact and experience to deal with honest conversations.
Based on the success of previous Sanofi-PACE interventions, Leah deemed that PACE would be a good fit for this role. The Organisation Development (OD) partners from PACE were able to maintain the delicate balance of being honest with respect, so as to build up trust between them and the employees. The fundamental reason for Leah’s trust in PACE was her belief that PACE genuinely understood Sanofi’s vision.
“The Sanofi-PACE relationship, in Leah’s words, truly felt like a partnership. She thoroughly enjoyed the whole process working with PACE, as it was a collaborative effort with mutual respect.
The Sanofi-PACE relationship, in Leah’s words, truly felt like a partnership. She thoroughly enjoyed the whole process working with PACE, as it was a collaborative effort with mutual respect. With the vast pool of suggestions from both parties, a recommended solution was found and continually modified as more needs emerged.
Sanofi’s focus for this year will be to strengthen the competencies of the leaders. Other than strengthening the ideal leadership behaviours of the directors, PACE will be reinforcing their change management.