Pharma Vioce

Building competitive advantage through execution

Abhay Padgaonkar

Who's in charge?

Getting things done sounds so simple, doesn't it? After all, don't we all do things every day? Then why is it that there is such a high failure rate when it comes to projects? Whether it is a clinical trial, API formulation, or starting a new plant, at the end of the day, a project needs to be managed. Pharmaceutical, biotech, and life science companies bet on their future with huge financial and human investments in such projects. And when a project doesn't live up to its hype, it can damage a company considerably.

A botched project can cost crores of rupees, but the direct financial cost is just the tip of the iceberg. It is accompanied with loss of stature and agony of missed opportunities. The failures also create serious implications for company's stability, stock price, and future. Most importantly, the leaders lose credibility, and once credibility is lost, it is very difficult to regain. In June 2006, after Airbus announced a second six-month delay to its A380 super jumbo jetliner, the market panicked and shares of its parent EADS plunged as much as 34 percent. In 2006, Airbus sold fewer new planes than arch rival Boeing for the first time since 2000. The project—almost two years behind schedule and $6.8 billion over budget—created havoc at Airbus, including the departure of two chief executives within three months.

In their book titled Execution, Larry Bossidy and Ram Charan have described the fundamental problem as this—"People think of execution as the tactical side of the business, something leaders delegate while they focus on the perceived, "bigger" issues. This idea is completely wrong. Execution is not just tactics. It is a discipline and a system. It has to be built into a company's strategy, its goals, and its culture. And the leader of the organisation must be deeply engaged in it. He cannot delegate its substance."

The psychology of change

Project management methodologies are replete with things like activity duration estimation, cost budgeting, critical path method, Gantt chart, or work breakdown structures—mainly focusing on the left-brain functions. But often what is lost in the shuffle are the softer, "big picture" aspects of project management that are typically associated with the right-brain functions.

Why are they important? Because there are very few projects that are purely technical in nature. For example, the root cause for the Airbus fiasco wasn't technical in nature at all. It was communication failures and chauvinistic conflicts between the company's French and German operations. There was no single manager to force integration and spot problems. Virtually every project is "of the people, by the people, for the people". And people happen to have feelings, imaginations, and beliefs. If you look at projects that have failed to meet expectations, more often than not ignoring or underestimating, this important aspect was probably responsible for the undoing of the project.

There is a psychological cost associated with behaviour change. One of the most important aspects of behavioural research is that losses have a greater impact on people than similarly sized gains—a phenomenon that psychologists Daniel Kahneman and Amos Tversky have called "loss aversion". Any shortcomings to the status quo are seen as losses and "losses loom a lot larger than gains". The gains have to outweigh losses by two to four times before people find the new alternative attractive.

By definition, projects change the status quo. For this reason, there is a great danger in viewing project management solely as a tactical, left-brain dominated activity. In this day and age of global interdependence, project sponsors and managers who are not fully aware of the importance of change management will face a huge handicap. They need to mitigate the overall risk level for the project by:

1. Identifying specific stakeholders (individuals and groups) and implicit assumptions
2. Objectively understanding the nature of the impact on each of them
3. Quantifying the severity of the impact
4. Assessing (not guessing) their readiness level to absorb the requisite change
5. Collaborating with the various stakeholders
6. Brainstorming creative solutions that create a win-win situation
7. Integrating these actions as part of the overall project plan

Cart before the horse

It is far too common to see a hasty handshake and an ambiguous agreement before launching a project to meet an unrealistic deadline. You can't plan something that is not agreed upon and you can't start executing if there is no plan. When you don't have the time to do it right, you inevitably have to re-invest in doing it all over. If you want to protect the investment and avoid the "Ready-Fire-Aim" syndrome, here are three simple steps to successful execution:

1. Agreement—Make sure that there is a common ground among all key stakeholders. This can be thought of as a contracting stage in a project. Confirm and clarify assumptions and expectations regarding project scope, constraints, deliverables, dependencies, impacts, timing, and funding.

2. Planning: A goal without a plan is just a wish. Without a detailed project plan outlining that is supposed to do what and when, and understanding how that is interdependent on all the other tasks, it is impossible to see how all the pieces of the jigsaw puzzle will fit together. Breaking down a behemoth into bite-size chunks is the only way to swallow it.

3. Action: Tracking progress, reporting status, controlling change, and managing issues. If the project appears to be going well, something is about to go wrong. The only way to stay on top is to be vigilant about it by actively managing (not micromanaging) the work being done.

In Who Says Elephants Can't Dance, which is about turning IBM around from the brink of bankruptcy, Lou Gerstner writes,"Execution is the critical part of a successful strategy. Getting it done, getting it done right, getting it done better than the next person is far more important than dreaming up new visions of the future."

Uncommon Sense

Simply stated, execution is the gap between promises and results—the desired and the real. Unfortunately, many companies follow the infamous SOTP (seat of the pants) approach to achieve results. Here are some common elements that will ensure success:

• Active sponsorship: Making sure that somebody at the top will not put a kibosh on a project because it wasn't his or her idea. Make sure somebody high up believes in and champions the project with his or her peers.
• Sufficient resources and funding: Making grand pronouncements are easy. Backing them up with time, money, people, and other resources is the hard part. While it's true that you can never have enough resources, make sure that you have objectively assessed the resource needs of the project.
• Competent project personnel: Having technical, subject matter experts on a project team is often essential, but more often than not, they are not project savvy. They tend to see things in black or white and nothing in between. A project doesn't manage itself. A project must also have people who can see in various shades of gray and know the art and science of working with others to achieve desired results.
• Clear roles and responsibilities: Even well-meaning people can trip on each other if their roles are not clear. Everyone on the core project team should know their own and everyone else's roles and responsibilities and the project owner should reinforce them for over eager team members who transgress.
• Realistic project plan: The old joke in project management is that a carelessly planned project takes three times longer to complete than expected; a carefully planned project takes only twice as long. One of the reasons why so many projects fail is that people have unrealistic assumptions and expectations about what can be done, how fast, and when. Project sponsors and managers must develop realistic expectations about the project.
• Proactive risk management: Involve and engage the project team in a "black-hat" exercise to anticipate potential roadblocks and how best to overcome them should they become a reality. These contingencies should be integrated in the project plan. Miracles do happen. So hope for the best, but prepare for the worst.
• Change management: More often than not, naiveté about the breadth and depth of the change involved leads to eventual depletion of time, resources, and performance-resulting in the project's downfall. Any time there is a change to the status quo, it creates disruption. People don't like disruption so they resist change. Any project team wishing to be successful, must anticipate this dynamic and have a clear strategy to consciously manage the change.
• Vigilant tracking: Launching a project is the easy part. Keeping it on track requires constant vigilance. Identify ahead of time the things that can be measured during the progression of the project and track them methodically and regularly. The reality is that what gets measured gets done.
• Timely issue resolution: The question isn't whether issues will arise, but when they will arise. No project ever goes exactly as planned. Have a process in place that determines the importance and urgency of the issue and a method to assign their ownership so that they are nipped in the bud.

Many companies look to hire and promote people with high IQ. But it is equally important to improve the ability to get things done better and faster by having street smart people to negotiate project scope, balance time, contain costs, control quality, inspire the project team, communicate effectively, and take prudent risks. IQ alone is not enough for getting it done. Along with IQ, organisations must have a high Execution Quotient (EQ) as well.

(Abhay Padgaonkar is a US based management consultant, author, speaker, and President of Innovative Solutions Consulting. He can be reached at abhay@pobox.com)