People and Patients First: How Roche BeLux is Reinventing Itself
By: Jurriaan Kamer
Tags: Transformation, Change Management, Organization Design, Leadership, Pharmaceutical

How do you reinvent a successful, 125-year-old company without wrecking what’s made it great? That’s a big question — and one Roche Pharmaceuticals is asking itself as it moves away from traditional hierarchy and towards autonomous, self-organizing teams.

To investigate the company’s ongoing transformation, we interviewed Eva McLellan, a member of the leadership team for Roche Pharmaceutical’s Belgium/Luxembourg (BeLux) branch and its Head of Business Strategy, Transformation, and Innovation. Eva sat down with Jurriaan Kamer, a partner at The Ready.

Jurriaan Kamer: The BeLux branch has been undergoing a transformation for about two years. What was its initial driver?

Eva McLellan: Our north star is to deliver three to five times more patient benefit at half the cost to society. Patients need new medicines and new hope faster. An incredibly motivating and worthwhile cause that’s driving our new ways of working and transformation. To achieve these ambitions, a greater focus on patients and their quality of experience is needed. Rather than measure organizational success through product sales, we’ve placed the pursuit of patient and societal outcomes in the center. The ramifications of this shift filter throughout the organization — from structure to incentives to the language we use to talk about our work and impact.

The pharmaceutical industry’s DNA has historically been based on developing and selling a small number of highly impactful medicines. But this is changing rapidly. While the majority of our sales came from a few large products in the past, we’re shifting to a more diverse portfolio of personalized medicines and diagnostics in the future.

Participatory from the Beginning

JK: If organizational transformation is imposed rather than invited, it rarely goes well — so I was inspired to learn that Roche BeLux applied a participatory approach to begin its transformation. Why was that the right way to go?

EM: I strongly believe when you invite folks toco-create a transformational process from the beginning, they’re more likely to contribute to the longer-term effort required to make it a reality. This results in high engagement and a greater overall quality of the transformational work. With this in mind, we started this journey by inviting involvement from within the organization rather than issuing a dictatorial mandate from the top. We architected the transformation to have five phases: unify direction, design, develop people, embed key practices, and measure performance. To make the transformation sustainable, we solicited volunteers from the organization to convene two design teams. One was asked to make recommendations about what a patient-centric operating model should look like (structure); another was tasked with making recommendations around the culture and mindset needed to support a new operating model (culture).

JK: How did it work?

EM: Employees were encouraged to apply to the two teams if they had motivation and relevant expertise. Applications were submitted without any identifying information; people weren’t even sure who was on a team until the day they convened. The process was designed to optimize for interest, quality of ideas, and expertise as opposed to the office-place politics that often accompany who does or doesn’t get selected for “special projects.”

After a two-week long design thinking sprint, the two teams presented the leadership team with 20 recommendations, almost all of which were accepted with minimal modifications. Our role as leadership team was to make sure recommendations didn’t jeopardize ethical principles, patient safety, or license to operate. We weren’t there to make them match our own preferences.

“People in the system know the system better than anyone, trust that. When you tap into people’s collective intelligence, the designs will be good enough for now and safe enough to try. Making progress together is energizing so get into action and improve as you learn.” — Eva McLellan

Fit-For-Purpose Teams

JK: Organizational structure is often optimized for everything except value creation. Instead of asking what structure would allow a company to best serve its customers, structure is often pigeonholed into rigid paradigms. Why was it necessary to challenge these paradigms and rethink Roche BeLux’s organizational structure?

EM: We continuously went back to our purpose and how to deliver value to customers in a more fluid ways, with less friction and more impact. One thing we identified was that BeLux team strategies were largely product-centric. This sometimes resulted in frustrating situations. For example, multiple Roche employees often engaging on different disease area related solutions could all visit the same physician. This redundancy not only frustrated customers, but it also meant our representatives were often unable to address stakeholder’s broader needs about how various Roche solutions along the patient journey were integrated. It was clear that the environment was shifting, complexity in delivery of healthcare was increasing, and customers and patients expected different things, and we wanted to make it easier to work with us. This meant changing the paradigm and traditional model of selling our solutions, to partnership and value creation, as our fundamental way of operating.

In addition to being product-centric, our organizational chart was based on a functional hierarchy. Different functions were led by a product director, sales director, and a medical director (among several others), who each had their own targets and strategic plans. This reinforced organizational silos and produced even more inconsistencies for external stakeholders. So we identified we also needed to adopt a new leadership mindset.

JK: What does the new organizational structure look like?

EM: We gave the design teams a design principle to look outside-in: What might our structure look like if designed with patient and physician needs in the center? They came back with a networked approach with autonomous teams. Our operating model is based on three fit-for-purpose teams that supplant an old way of thinking about how value is created within the organization:

Customer Driven Teams (CDT) focus on disease areas Roche offers solutions for today (with a medium-term focus, 1–2 years). These teams work on identifying and delivering needs across the patient journey in the disease area, based on stakeholder input and insights. They’re focused on patient outcomes and reducing inefficiencies, thus reducing cost to society. The teams are cross-functional, consisting of experts from different disciplines like marketing, medical, customer engagement, market access and finance. Each CDT has a non-hierarchical leader (CDTL).

Centers of Excellence (COEs) build capabilities needed in the future (3–5+ years focus). Examples of COEs are Personalized Healthcare, Digital, and Innovation and Patient Engagement. They do R&D in their area of focus and take inputs from the CDTs to put into practice. As an example, the Digital COE is working on solutions that make it easier to engage with physicians and patients.

Pop-Up teams are the most flexible and adaptable (with a short-term focus). They’re designed to capitalize on opportunities or quickly react to unplanned issues. These teams form and disband over short periods of time and work on outcome-focused projects. For example, at the start of the pandemic, a Pop-Up team figured out how to deal with high demand in a COVID-19-related medicine and the logistical challenges that caused. People from different places in the organization can volunteer part-time in a Pop-Up team they care about.

Fit-For-Purpose Ways of Working

Creating new teaming constructs is not sufficient on its own for organizational transformation. To bring it to life, The Ready was asked to help implement a new Operating System based on different ways of working that enable self-organization and inch decision-making closer to the patient.

We trained and coached a subset of Roche BeLux to become transformation ambassadors — a self-steering community of practice that continues the transformation after we leave. Through trial and error, we let them figure out what practices would be useful for their teams and when. Practices were tested by running experiments. The ones that worked well were embedded. These are five important ones that gained traction:

Team charters

When you remove hierarchy, you need to replace it with something. A team charter is co-created by the team and are the working agreements that enable the team to pursue its purpose. A typical team charter includes agreements around purpose, outcomes, accountabilities, decision rights, structure (what roles exist within the team), practices, and steering metrics. But chartering isn’t a one-and-done deal; we retrospect and iterate on charters as new tensions crop up, new members join, or work changes.

90-day outcomes

“We used to plan and budget on annual cycles,” says Eva, “but the environment would shift so quickly that our strategy became obsolete in six months.” To become more adaptive, we implemented an up-tempo cadence: the 90-day heartbeat. Strategic conversations, decision reviews, and priority steering now happen several times a year. A team’s planned outcomes are transparent to the organization, which creates clarity on what every team is pursuing.

Action meetings

Meetings done right are one of the most powerful tools available to teams trying to do great work. But great meetings don’t happen accidentally; they require making deliberate decisions about how you want to work. As part of the team’s operating rhythm, most adopted a disciplined weekly action meeting, in which a team figures out what is needed to make progress next week. The agenda is built on-the-fly and based on the needs of the team members.

Retrospectives

One of the transformation’s essential elements was to create an organization that redesigns itself. As Eva explains: “We want a self-steering, self-optimizing, continuously-learning system. To achieve that, we need to review regularly what is working, and what is not, so success can be amplified and mistakes can be corrected.” Teams adopted a recurring rhythm of retrospectives: a moment to reflect on the last period, the impact they made, and areas for improvement.

Integrative Decision Making

To enable speedy, non-hierarchical decision making, teams adopted a process called Integrative Decision Making (IDM). Anyone can introduce a proposal, and after exploring clarifying questions and hearing everyone’s perspective, the team adopts the proposal when it’s “safe-to-try” and there are no reasoned objections.

One challenge was getting teams to invest time in new ways of working and give new practices a chance. As Eva puts it:

“You won’t become a tennis player by watching the pros. You need to be on the court, practicing every day with intention. You need to try, fail, and learn. Practice is key, like with anything else you want to master.” — Eva McLellan

The New Role of Leaders

JK: Distributing decision-making power has implications for those who previously called the shots. How did the leadership culture change?

EM: All leaders were invited to adopt a servant-leadership style. Our main responsibilities include setting vision and guardrails, and then coaching people, building skills, and architecting an environment where people could thrive and produce great outcomes. Now, everyone is much clearer on how they best contribute.

Understandably, this shift was and continues to be a challenge for all of us who previously held management positions. Having said that, I believe this is one of the most important cultural design elements. Many well-intentioned transformational initiatives fail because this is not integrated into the organizational mindset and actions.

JK: What advice would you give to leaders going through a similar transformation?

EM: Our transformation is intended to cause extraordinary outcomes beyond historical performance, and growing people in the process. I recommend leaders keep these things in mind:

Clear purpose is key. When your company mission is compelling — like “Deliver three to five times as much patient benefit at half the cost to society” — it is clear that, as a leader, your number one task is to help everyone think differently about how the organization functions. Recognize that people want to make the biggest contribution they can, and if the context is clear, they will use their best intelligence and act in a way that forwards the mission, correcting and improving as they go. If you empower them as much as you can, your team will be self-steering, and sustainable. This will allow you to spend more time with your people and customers working ‘on the system’ removing roadblocks, and improving it. Models, data and frameworks only get you so far. You need to tune up your intuitive inner leader, sense situations, and meet people where they are. Be self-reflective and intentional about what’s needed in the moment and act on that intuition.

Conclusion

Transforming a 125-year-old organization in a regulated industry like biotechnology can seem difficult to achieve, but Eva believes it’s far from impossible: “You need to have a few hard rules, a clear purpose, trust in your people to do the right thing, and then let go of the rest.”

In part two of this series, we’ll sit down with Eva again to further reflect on how to build a culture of innovation and learning — and why breakthrough performance can’t happen without failures.