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Tuesday, October 11, 2011

Positive Leadership: Fix the Problem and Not Just the Symptoms

This interview with Joseph Jimenez, chief executive of Novartis, the pharmaceutical company, was conducted by the New York Times:

‘Q. What are the most important leadership lessons you’ve learned?

A. One occurred when I was a division president of another company. I was sent in to turn the division around after four years of underperformance.  It was a declining business.  And when I got there, I completely misdiagnosed the problem.  I said: “Look.  We’re missing our forecast every month.  What’s wrong?”  I brought in a consulting firm, and we looked at what was wrong.  And the answer was that we had a bad sales and operations planning process, where salespeople, marketing people and operations people were supposed to come together and plan out the next 18 months and then forecast off of that.  So I said: “O.K.  We’re going to fix this.  We’re going to have the consulting team come in and help us make that a better, more robust process, with more analytics.”

And it turned out it wasn’t at all about analytics.  Because once we did that, and we put that new process in place, we still continued to miss forecasts.  So I thought, “Something’s really wrong here.”  I brought in a behavioural psychologist, and I said: “Look, either I’m misdiagnosing the problem or something’s fundamentally wrong in this organisation.  Come and help me figure it out.”  She came in with her team and about four weeks later came back and said: “This isn’t about skills or about process.  You have a fundamental behavioural issue in the organisation.  People aren’t telling the truth. So at all levels of the organisation, they’ll come together, and they’ll say, ‘Here’s our forecast for the month.’  And they won’t believe it.  They know they’re not going to hit it when they’re saying it.” The thing she taught me — and this sounds obvious — is that behaviour is a function of consequence.  We had to change the behaviour in the organisation so that people felt safe to bring bad news. And I looked in the mirror, and I realised I was part of the problem.  I didn’t want to hear the bad news, either. So I had to change how I behaved, and start to thank people for bringing me bad news.

Q. That doesn’t mean letting them off the hook, though.

A. Right. It’s more a chance to say: “Hey, thank you for bringing me that news.  Because you know what?  There are nine months left in the year.  Now we have time to do something about it.  Let’s roll up our sleeves, and let’s figure out how we’re going to make it.”  It was a total shift from where we had been previously.  So after that experience, I always ask all of my people, and I always think to myself: “Are we really fixing the root cause of this problem, if there’s any problem?  Or are we fixing the symptoms?”