Creative Renewal: Schering-Plough's Turnaround

Last week, we discussed how Mr. Fred Hassan (CEO – Schering-Plough (S-P)), during his initial moves at a business turnaround, also set the stage for a new organizational capability for “Disciplined Execution” – the ability to align and mobilize the entire organization behind the company’s new strategic focus. This post can be viewed in our blog entry “Disciplined Execution: Schering-Plough's Turnaround.”

This week, we’ll discuss the initial moves Mr. Hassan made in the area of “Creative Renewal” – the ability to renew the entrepreneurial spirit, while enabling the organization to continually cycle through stronger and stronger strategy-to-execution phases.

Both of the last two blog entries mentioned the critical importance of a “compelling vision” to both Disciplined Execution and Creative Renewal. I’d like to spend a few moments amplifying that idea a bit.

As mentioned in last week’s entry, a compelling vision provides a key foundation for Disciplined Execution. Previous to Mr. Hassan’s tenure at S-P, the company was in the doldrums. In some sense, the company had lost its way. It was reacting to the marketplace with a series of short-term, tactical maneuvers; however, there did not seem to be any overall “rhyme or reason” – i.e. an overarching, proactive, forward-looking, coherent framework of purpose or direction. It seems that the company was behaving something like a pinball in a pinball machine – ricocheting about from problem to problem, incident to incident. And, because of this lack of rooting in something larger – some kind of powerful vision that would provide people with a sense that the company had a larger, more long-term vision or game plan, each of those little reactive “ricochets” seemed rather meaningless. And, because there was no larger vision, the company just seemed to become more and more fragmented, reactive, and purposeless. It isn’t easy to see why employees became detached and demoralized – and thus, unmotivated to give their all.

A clear, compelling – and genuinely shared – vision can overcome this problem. Short-term problems don’t overwhelm, because they are set into a larger, longer-term, purposive and proactive context. It’s like the company knows where it’s going, and WHY it’s going there. I’m not a religious guy, but this idea isn’t new. I think that in the Old Testament, the prophet Isaiah (I think) said something along these lines: “Without vision, the people perish.”

A clear, compelling vision also provides a critical foundation for Creative Renewal. In fact, an exceptionally powerful vision is at the core of the entrepreneurial spirit. After a company has been successful, and has grown into a more mature phase of development, all-too-often the primary “spirit” driving the company becomes nothing less, and nothing more, than the “next quarter’s financials.”

In the start-up phase, however, this drive for financial success is inextricably linked to a profound vision – of how this new company will make a difference; of what kind of value creation and contribution the new company will make. This burning vision is the stimulus for innovation and adaptation, as well as a kind of burning, or urgent, commitment. It is a large part of why so many people love to “throw in their lot” with a new company, even given the risks involved. A new, entrepreneurial company is just plain exciting and fun. There is unbounded opportunity for contribution, innovation, performance and reward, together with an atmosphere of pride, vision, togetherness (“we’re all in this together”), excitement and – yes – fun.

That burning energy doesn’t have to die as a company grows older (chronologically). It can remain young (spiritually) if it can retain – and continually renew – that initial coupling of powerful vision with the drive for financial success.

We’ll continue this discussion next week.

Dean Robb, Ph.D.