"Why Change Succeeds:" an Organizational Self-Assessment

By Cowley, Bill | Organization Development Journal, Summer 2007 | Go to article overview

"Why Change Succeeds:" an Organizational Self-Assessment


Cowley, Bill, Organization Development Journal


Abstract

This paper seeks to explain the underlying reasons for the success or failure of 11 corporate-level change initiatives in a large international pharmaceutical company. A research team comprised of internal and external specialists interviewed 72 employees who were involved in the implementation of at least 1 of the company's key change initiatives during the past 15 years. Results revealed that the success of change initiatives was largely determined by senior leaders' ability to utilize both formal and informal mechanisms that were culturally appropriate to the organization. A process for investigating the effects of a company culture on effective change implementation is discussed.

Introduction

Learning how to effectively implement organizational change is one of the most rewarding challenges of an organizational consultant. In fact, there have been myriad studies that outline these challenges in detail and offer potential strategies for successfully implementing organization change (e.g. Beer, 1990; Kotter, 1996, Ulrich, 1990.) Despite the insightful contributions offered by this body of knowledge, many of these recommendations are at such a general level that it is difficult for practitioners to translate these insights into change initiative strategies that consider the unique history and current makeup of an organization.

In an effort to move beyond the limiting factors associated with external change initiative research, the leadership of Eli Lilly and Company, a $14B pharmaceutical company headquartered in Indianapolis, Indiana (USA), recently undertook a study to identify the underpinnings of their own challenges with large-scale change prior to introducing a new corporate initiative. The purpose of this article is to provide O.D. practitioners with a process for investigating the impact of a company's culture on effective organizational change implementation.

History of Change at Eli Lilly

By the mid-90's, Lilly was a highly competitive global firm most noted for successful introductions of insulin and the world's first SSRI1 antidepressant, Prozac. Built on a string of breakthrough pharmaceutical successes dating back to the 1860's, Lilly had attracted the best scientific minds in the world. A unique company culture evolved, characterized by bright, independent people governed in a management style based more on trust than on control.

By the late 1990's, pharmaceutical companies were under pressure to reduce their cost structures. Lilly's CEO decided to pursue Six Sigma as a corporate-wide solution to examine its own cost structure. However, knowing that implementing Six Sigma would be yet another in a series of challenging changes for the company, the CEO determined it would be critical to learn from the company's past efforts at instituting large-scale change. To accomplish this task, the CEO, commissioned a study led by Lilly's internal organizational effectiveness (OE) unit.

Methodology of the Change Effectiveness Study

The OE practitioners engaged in a partnership with the William G. Dyer Institute for Leading Organization Change2 at Brigham Young University in order to ensure objectivity and to obtain research expertise. The research team used ethnographic research methods for collection and analysis of data, examining the totality of data within the expressed culture of Lilly. Patterns and relationships between the data elements were studied, producing both quantitative analyses and a simple qualitative model.

Project Selection for the Study

The study team selected 11 major corporate projects that met the following criteria:

* An initiative at the corporate or major division level

* Significant size and scope (large project team and/or high-level project leader; substantial change intended)

* Broad population impact (all or a majority of employees in the corporation, or a large component like R&D)

The change initiatives spanned almost 15 years of Lilly history and included process improvement programs, a major organizational realignment to a team-based R&D structure and the introduction of a modern performance management system, among other changes. …

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