Nine months ago, Madison, N.J.-based American Home Products (ahp) completed a 10-year evolution—from a holding company of disparate pieces to an operating company with a single focus: provide health care solutions to a global market. But that success left the company with another challenge: transforming managers, heretofore members of distinct, independent business units, into future leaders of the new, integrated organization.
When John R. Stafford joined ahp as chairman and ceo in 1986, most of the company's holdings, including a food manufacturing company, a candy company and an agricultural supply business, had little to do with global health care.
ahp's business integration process has included divesting its non-core businesses and then realigning what was left to reflect the organization's new vision. Last June, when the company sold Cyanamid Global Agricultural Products, ahp's structural "reinvention" was complete. For the company's future leaders, however, the cultural reinvention had just begun.
Company executives knew it would take more than a portfolio of related products to make the more than 47,000 ahp employees feel as though they worked for a unified, international organization. They also knew that the training and development process—a key component in the change initiative—would have to begin with the corporation's managers. When Tim Fidler, ahp's executive director of management development and training joined the company in 1997, he immediately teamed up with Lexington, Mass.-based Linkage, Inc. to develop a plan for ahp's future leaders.
This joint effort produced the Global Leadership Program, an eight-day event designed to develop business acumen and leadership skills. In the three years since its inception, 111 managers—all selected for their potential as future leaders of ahp—have been through the program. Of those, 97 percent have stayed with the company—an impressive statistic for an industry in which the war for talent is so fiercely competitive. In addition, more than 70 percent of the program's participants have since been promoted—some more than once—to positions of greater responsibility within the organization.
The Global Leadership Program includes action learning projects using "live" ahp data instruction as well as basic instruction—from company executives, external thought leaders, and business school faculty members—comparable to the executive development programs offered at Harvard, Cornell and Dartmouth, among others. But in the Linkage-designed program, participants don't work in a vacuum. At the end of the week-long event, future leaders present recommendations for corporatewide initiatives to a panel of senior executives—and many of those suggestions will be acted upon immediately.
The price tag for the leadership program? Significantly lower than those of the comparable programs Fidler priced (see chart next page). And the investment, according to Fidler, is well worth it for ahp. "The pharmaceutical industry is changing," he says. "There is more focus on reducing costs. Margins are more controlled, so the industry has to look very closely at how productive and effective its leadership is."
"These are not people who've had training in leadership or management skills," adds David Giber, senior vice president of consulting for Linkage. "These are scientists—chemists and biologists—who've been thrust into management positions. We've tried to create a program that helps them develop those skills in a realistic, but safe, environment."
Of course, the Global Leadership Program is not the first leadership development effort in ahp's 74-year history. Previous programs, however, have been conducted within ahp's individual business units. "There was never a unified effort to develop the leaders of ahp," says Giber.
"Leadership training has historically been handled by each individual business unit," says Fidler. "Now we're developing leadership skills together and teaching that ahp is all one company." As a result, managers are talking with each other—and looking for ways to develop synergy between the businesses.
"The early returns have been pretty spectacular," continues Fidler. As a result of recommendations from participants in the program, ahp has launched several successful initiatives, including integrated Therapeutic Area Teams for more effective global brand management. And even more importantly, he believes, "We've created a window through which different groups can build relationships, share information and mentor each other ... there's really no limit to what they can make of it."
Global Leadership Program 2000
While the overall objective of the Global Leadership Program—to create leaders of a unified, international company—hasn't changed since its inception, each year's "backdrop" reflects ahp's current challenges. During the first two years, teams focused on global product development and brand management, respectively. Participants in the most recent event, held last October at Princeton, N.J.'s Doral Forrestal Resort, were charged with finding ways to drive business results for the new, integrated ahp.
The development process began with a steering committee comprised of the leaders of ahp's key business units. Members were polled about their expectations for the 2000 program and asked for suggestions on the key business problems that the company's future leaders should tackle.
"The program—and its impact—is known throughout the company," says Linkage's Giber. "So the executive team wants to be involved from day one."
Because the internal announcement of the sale of the agricultural products business coincided with the meeting of the steering committee, "Integrated ahp" was a logical choice for the Global Leadership 2000 theme. Two things remained: Linkage consultants needed to adapt the action learning process (see sidebar, page 58) so that program participants could explore that topic—and increase the company's competitive advantage along the way. And, of course, the participants needed to be selected.
"We have an annual talent review process that asks business unit leaders to identify their high-potential people," says Fidler. These names go into a database from which candidates are selected. "By design, the program can only take about 40 people. So we usually have about twice as many candidates as we need." This, he concedes, is a "high-quality problem." Few training professionals would complain about a larger-than-required pool of talent.
Ultimately, the participants (37 for the 2000 program) are selected based upon manager recommendations—and the willingness of those managers to part with their star employees for eight days. The "back-up" list—the envy of many other pharmaceutical companies—is now the waiting list for next year's program.
The information package, delivered a full month before the event, looked innocent enough, but its one-word title, "Action," was daunting. This was the first correspondence received by all 37 participants of the 2000 program: a 24-page document outlining the projects to be tackled by each of the four action learning teams during the eight-day event. The materials included team rosters, and teammates were encouraged to contact each other and get started. The fears of participants like Page Bouchard, who worried about "didactic and simplistic team building exercises," were immediately put to rest.
To facilitate the advance work of team members, each team was put in touch with a mentor: a senior executive who would provide advice and feedback both before and during the event. In addition, each participant was prepared for the program with a comprehensive 360 degree evaluation. But these evaluations did more than simply alert participants to their shortcomings, says participant Nikhil Parekh. "I found out what I needed to improve, but also what people really like about my style," he says. "It was very affirming, in a way."
Participants discovered more opportunities to see their evaluations in action as they worked within their teams in Princeton. Each team had a particular focus, along with a mission: Make up to three recommendations that will help drive the integrated ahp's competitive advantage in the global economy. And during the often intense sessions of collecting, evaluating and processing the information that would eventually become part of their presentations, several team members discovered ways in which they might improve their leadership abilities. "I need to involve my subordinates more, so they'll take ownership of the goals I have established for the department," says one participant, C.T. Newsum, who realized that he wouldn't help implement a program unless he believed in it.
Just as illuminating was the customized team building segment of the program developed and implemented by Brookline, Mass.-based Leapfrog Innovations, during which team members were required to work together to achieve short-term, but complex goals (see photo layout, page 60).
When the action learning teams weren't "in session," team members were getting instruction from some of the most renowned thought leaders in the business world such as Claremont University's Peter Drucker School of Management professor Vijay Sathe, University of Michigan Graduate School of Business professor Noel Tichy, and Columbia Business School professor Francious Simon. From other experts, ahp's future leaders learned new strategies for interdepartmental communication, crisis management, and team problem-solving. Finally, participants heard from ahp's senior leaders, who helped clarify the chairman's vision for the company.
"The program widened my perspective about who I worked for," says participant Cynthia Sarnoski. "Historically, there hasn't been a lot to identify with ahp in general. Now I have a more conscious recognition of being part of a whole company."
The leaders "conveyed a feeling of single purpose about the company and its goals," agrees Newsum.
For other participants, the discoveries were far more personal. "I work for a global company, but I didn't know what 'global' meant," admits Parekh. "Doing business in France is not global. Changing the way you think—from development to design to distribution—can be global. If we want to develop things for a global market, we have to develop them globally. That became apparent during the program."
On the last day of the program, each team presented its recommendations—12, in all—to a panel of ahp's senior executives, many of whom had been involved in the program from the start. Perhaps, if this were an ordinary leadership development workshop, that might be the end of it. But ahp strives to be anything but ordinary.
"Some of this year's initiatives have already gone forward," says Fidler. For example, one of the teams proposed an integration of our employee training and development systems across the company. "I'm working with a group on that right now."
Other initiatives will be implemented on a slightly less global level. Ray Carson, assistant vice president of human resources and a graduate of this year's program, has already called upon some of his teammates for input into a new management development program. "The relationships we've made will have an impact on the company's future," says Parekh, one of Carson's teammates.
Finally, there were a few suggestions that might take a few years to implement. "But that doesn't mean we won't do it," says Fidler. "We're early in the process. But we'll get there."
(Cover story continued on page 58)