ARCONDIS UPDATE No. 02|2018: The smarter solution

12_The smarter solution 13
Persönlich versuche ich regelmässig vor Ort
und damit für die Stakeholder zugänglich
zu sein. Bei Ankündigungen bereite ich
das lokale Management optimal auf diese
Aufgabe vor, stehe selbst aber bewusst
nicht im Vordergrund. Veränderungen werden
besser angenommen, wenn sie nicht von
aussen aufgedrängt, sondern vom lokalen
Management getragen und kommuniziert
werden – in der Sprache oder im Dialekt der
betroffenen Personen. Simple Kniffe, aber
mit enormer Wirkung. Denn wer sich ernst
genommen und involviert fühlt, arbeitet
motiviert mit, und das hilft dem Projekt.
English
E_New specialist knowledge in research,
development and technology are the
drivers for mergers, acquisitions and
divestments in the life sciences industry.
Many companies pursue a “Buy & Build”
strategy – the acquisition of specific market
segments to gain a leading market
position. At the same time, they outsource
production and packaging to focus
on early, innovative phases of the product
lifecycle. Mergers, acquisitions and
divestments are therefore not only more
frequent, but also becoming more agile.
This April, Servier, the second largest
pharmaceutical company in France, acquired
the oncology division of Shire. In the same
month, Shire itself accepted a billion dollar
acquisition offer from Takeda. Johnson &
Johnson, Roche, Novartis and other global
players have also attracted attention by
acquiring departments or even entire companies.
ARCONDIS manager Dunja
Hahn in an interview with
UPDATE
Dunja Hahn is a manager in the Life Science
Information Management department. With
over a decade of consulting experience,
she has profound multinational and crosshierarchy
expertise in program and project
management. Her focus is on organizational
change and transformation management
(OCM), including communication strategy
and implementation. For the past three
years, she has managed the divestments of
several international production sites for a
global pharmaceutical corporation.
Ms. Hahn, you have accompanied several
mergers, acquisitions and divestments in
your role as a global IT project manager.
What is unique about this type of project?
I would summarize the challenges into three
categories:
First: Complexity.
The high number of active stakeholders
and functions in the form of local and
global teams, potential buyers, vendors and
external suppliers, as well as the linkages
between business and IT, increase the complexity
and can cause unclarity or stock-outs,
or even disable business processes.
Additionally, external factors such as inspections,
ongoing projects such as system
upgrades or country-specific regulatory
requirements must be taken into consideration.
Due to these internal and external factors
and dependencies, project management
and budget calculation are often difficult.
There is also the “human” factor: the mindset
of affected persons can change drastically.
Some employees are concerned about
the future or, after years of loyal service, do
not feel valued and may even feel disappointed
– motivation dwindles and frustration
grows. Cultural differences, both countryand
company-specific, increase complexity
and create barriers.
Second: Agility.
It is not only responsibilities, timelines or
requirements that are constantly changing
during a project, the scope can change suddenly
and unexpectedly, as a result of the
sale or closure of a location or department.
Agile planning is crucial. Likewise, the team
must be able to respond with flexibility to
knowledge loss or experts due to terminations
or restructuring measures.
Third: Uncertainty.
One of the greatest challenges of such a
project is the uncertainty of what is planned.
When it comes to divestments, the contractual
partner normally is not known initially.
As a result, the requirements of the buyer,
as well as potential synergies with the new
owner are often unclear at first, and only
becoming more concrete during the later
phases of the project, or even when the
contract is signed.
With M&A, there often is uncertainty about
the extent of integration, including infrastructures,
processes and applications of
the two contractual partners. Anything is
possible, from pure participation financing to
a complete merger. This decision has a major
impact on the subsequent harmonization
process, addressed by the PMI (post-merger
integration) activities.
The uncertainty is tangible – will the new
buyer show up tomorrow with entirely different
requirements? Or will the project be
stopped suddenly?
The agreement can collapse just seconds
before signing. All employees have to plan
for this scenario, including a rollback, as
well as be prepared for the “new owner’s”
arrival, when it could happen that the previous
managers and structures are still to be
followed.
Behind the scenes: What challenges
specific to M&A and divestments did you
face in your everyday project life?
Personally, one obstacle is the initial small
group of informed people able to discuss the
details of the project. Negotiations are often
kept under tight wraps until contract signing
and official handover to the new owners.
This presents both major and minor challenges
on a daily basis. For instance, how
do I obtain a complete application inventory
to start the separation of the application
landscape when the manager has not yet
been informed about the imminent sale?
These types of situations require a certain
personal flair, highlighting organizational
change management as a key success factor
in such a project.
A divestment is always a unique situation.
The affected local team members are rarely
involved in projects of this type or dimension.
Normally, the new owner replaces
previous management with its own staff,
causing major uncertainty at both the functional
and personal level.
In my experience, even if these divestment
projects are managed with a great degree
of professionalism, it is essential to realize
that emotions are involved and frustration is
at a high level, especially for those affected
by the change. They fear for their jobs, are
disappointed, and in some cases, they even
feel cheated by the company they were
loyal to for years. Unlike with M&A, not all
contractual parties to a divestment have the
same entitlements. This is why instinct and a
sophisticated organizational change management
system are crucial for the project to be
a success.
Additional to these human reactions, responsibilities
and requirements change over the
course of the project, or the company may
lack experts, as management and specialists
tend to be the first to “abandon ship.” This
could result in unexpected situations that
would normally be inconceivable in standard
business practices. It is essential that even
trivial activities and matters of course be
addressed – for example a handover of all
passwords for existing systems and applications
to ensure their continued availability.
How does one meet these challenges?
My tip: “Think big. Start small.” ARCONDIS
has provided support for several M&A and
divestments on both the business and IT
sides. A good example is the migration of
application landscapes following a company
split (note from editor: covered in UPDATE 3
| 2017).
To respond to changing conditions with a
certain level of flexibility, we recommend
project management with shorter planning
cycles. The extent of integration should be
determined as early as possible, ideally
during the acquisition process. Functions
and roles should also be clearly defined and
reevaluated over the course of the project.
You named organizational change management
as a critical success factor. What
tips do you have as an OCM expert?
When it comes to emotional topics like a
change in ownership or even a shutdown,
it is important that those affected by the
change, feel that they are taken seriously.
This is why OCM should not be something
done “on the side” – but should instead be a
defined step in the process.
The goal is to break down both language and
cultural barriers. It is nothing new when I
say that training and regular status calls are
necessary to prepare employees for new
requirements and processes. It is important
is to get feedback from those involved, and
value their contributions. The best option is
to take advantage of the existing meeting
structure. As an example, a production site
to be acquired by a CMO, held regular town
hall meetings where we could give status
updates during the project.
Personally, I try to be on site regularly to be
available to the stakeholders. When making
announcements, I prepare local management
teams for the tasks ahead, but do
not take a leading role myself. Changes are
better received when their origin is not from
an outsider, but are instead addressed and
communicated by the local management
team in the language or dialect of the individuals
affected. An unassuming approach
with a major impact. After all, those who
feel being taken seriously and involved in
the process will cooperate, which in the end
benefits the project.