Twitter Weekly Updates for 2009-12-27
- we use twitter for business, but can twitter (the company) make money? http://tinyurl.com/yzgcatk #
- time for organizational change at Liverpool football club, I think. And at Hertha Berlin #
- Eurostar PR nightmare – trains stuck in chunnel http://tinyurl.com/yfz2jcf. how to get over this? they made good offer #
- facebook, twitter, linkedin – they're all good marketing tools, but we must use them intelligently #
- iPhone apps: eBay has one, should your company? http://tinyurl.com/ye4eodc #
- Rewriting history? NYTimes: Accenture, as if Tiger Woods Were Never There http://s.nyt.com/u/vnV #
- a very difficult thing to do – what's the best way to tell someone they are losing their job? #
- newsflash: middle managers are important! http://tinyurl.com/yag6dgk Once out of fashin, now back in – as they should be. a vital cog #
- intersting article on managing a team of survivors after organizational change related layoffs http://tinyurl.com/ydyqpt3 #
- excellent alternative analysis from union view of #ba strike – danger of macho management styles http://tinyurl.com/yb55xhb #
- christmas markets – a microcosm of german business http://tinyurl.com/yhjeoym #
Managing change in the business environment
Is there an economic downturn? Either way, a change in the business environment is one of the prime causes of organizational change. At Turris Consulting, we say that the business environment is part of the external context of change. (Click here to read more.)
Of course, smart organizations are very aware of what is going on in their business world. In this Wall Street Journal article – In Chaos Lies Opportunity – the authors argue that companies can do well even in difficult times if they understand the environment.
For most industries, the optimal time to hit the brakes and downshift was months ago. The questions to be asking now are: Where is the apex of the curve, and how hard should we accelerate to take advantage of competitor mistakes? Who is in trouble and dumping valuable assets in order to survive? Can we add great people who are now available?
What does this mean in terms of organizational change management? It means that good managers scan the outer context of change, and then work out what they need to change within their company so that the company can do well even in in difficult times.
Pharma industry change – Sanofi
As if to emphasise what my last post said, today came an announcement from Sanofi, the French pharma company, that they are buying Chattem for $1.9bn. Chattem provides over-the-counter drugs like Gold Bond or Selsun Blue. 
What’s the rationale for this? Probably Sanofi wants to become less reliant on the blockbuster patented drug business.
Change in the Pharma Industry
One of the most interesting industries that I have been involved with is the pharmaceutical industry. It is constantly evolving in the face of internal and external challenges which are described below. If you were the head of a pharma firm, how would you deal with these problems?
Three major issues that confront the industry: the rise of generic products, the difficulty in finding new treatments, and the large amount of spending on sales and marketing.
The first challenge is that in most countries, a drug company has a 17 to 20 year period when its product is protected by patent. However, this period does not start when the drug comes on the market, because patents are filed during the research phase. On average, a patented drug is on the market for around 12 years before the patent expires and generic competition arrives. Once the drugs have come off patent, their market share and price premium are significantly reduced, because the generic alternative is less expensive.
Second, there is a general feeling that all the ‘low hanging fruit’ of disease have been picked. The industry relies on blockbusters, which are drugs that bring in annual revenues of $1 billion or more. Evidence suggests that it is getting increasingly difficult – and more expensive – for companies to find new treatments. This has led to a significant change in the basic approach to research. Companies are moving from chemistry-based therapies to biology-based therapies, but since the major pharmaceutical companies tend to lack expertise in this area, they are either buying or forming partnerships with either smaller, more specialised outfits or are forming partnerships with larger drug companies.
The third challenge for all major pharmaceutical companies is that they spend a great deal on sales and marketing. Pharmaceutical companies position themselves as research-oriented organizations. In fact, the actual amount that they spend on research and development is less than the amount they spend on sales and marketing.
Language and Organizational Change
In my work, I often comment on the importance of communication for organizational change management. This insight is based on both practical experience and research. Here is an extract from an article I wrote about language and organizational change.
Theorists started to study the relationship between language and organization in the 1980s, when language began to be understood not simply as a mechanism of communication, but rather as a fundamental aspect of organization and organising.
Language-in-use is often referred to as discourse. In its narrowest and most traditional definition, discourse refers only to spoken dialogue. A fuller understanding of discourse, however, includes both speech acts and written texts. The most radical view is that organization exists only through language, leading to views of organization as text, or as narrative, or as constituted in discourse.
It has been shown that there is great value in looking at discourse during change processes. Language, in the form of conversations, stories and rumours, is a significant factor in the way change is conceptualised. The way in which organizational members negotiate meaning in the change process is through discursive practices and textual objects. Indeed, coherent language use can play a significant role in the outcome of change initiatives. One study of the introduction of new technology on the London Insurance Market demonstrates that there are fragmented and competing discourses within an organization. Consequently, competition between groups takes place through discourse.
Conversation is one of the most common forms of communication in the workplace. Studies of managerial activities have shown that managers spend a large part of their time in carrying out oral communications. The act of conversation and the content of conversation produce action, which indicates why conversations can play an important part in a change process.
Stories play a significant role in the creation and maintenance of meaning in organizations and hence in the development and maintenance of organizational culture. The informal nature of storytelling does not mean that it is not important. It has been shown, for example, that the use of stories enables change to take place, as when an executive’s storytelling enabled him to convince colleagues to move in new direction.
Discourse – communication – is a mechanism through which change happens, and it should therefore be considered in an investigation of change processes.
Managers and consultants should also pay attention to language when leading and managing change processes.
Enterprise 2.0 – social networking in business
I want to draw attention to a new book – Enterprise 2.0: New Collaborative Tools for Your Organization’s Toughest Challenges, by Andrew McAfee (Harvard Business Press).
He discusses why email is still the king of communications technology in organizations, and has not yet been challenged by more modern social networking tools.
A review in the Financial Times by Richard Waters summarises my own feelings about the book:
McAfee correctly identifies the biggest reason for slow adoption: the resistance of individual workers to new ways of doing things that do not yield substantial and clear advantages to them. If e-mail gets the job done, why look further?
(…) There are other, deeper reasons behind the delayed arrival of Enterprise 2.0. As McAfee rightly says, Web 2.0 technologies are inherently egalitarian – they rely on treating each contribution equally, regardless of corporate hierarchy. That makes them a threat.
Organizations that want to use such tools need to change their culture to accept that people at all levels can make contributions to debate and discussion.
This book is definitely well worth a read.
Twitter used for business communication
As I have already said, social networking tools can be very useful – if used appropriately.
Here is a very good video that discusses how Twitter has been used successfully by one company to market its products.
Social networking tools for business – the good and the bad
I have already written about the value of corporate blogging – you can read that here. There are of course dangers associated with blogging and using other social networking tools.
Stephen Baker discusses some of the possible issues in an article in Business Week: “Beware Social Media Snake Oil“. As he says,
Employees encouraged to tap social networking sites can fritter away hours, or worse. They can spill company secrets or harm corporate relationships by denigrating partners. What’s more, with one misstep, one clumsy entrée, companies can quickly find themselves victims of the forces they were trying to master. Thousands of bloggers attacked Motrin last year because of an advertisement from the Johnson & Johnson brand they found demeaning to mothers.
I don’t really agree that employees will “fritter away hours”, but he does have a good point about the need to be careful about the kind of information that is put out.
In a related article “Is social business worth your time?” on the Harvard Publishing blog, Morten Hansen makes a point that might seem obvious, but is often forgotten in the rush to embrace new techniques and methods:
Social media tools are only useful for some problems. Managers need to ask, do social media tools solve my key challenges?
As well as as communicating externally, organizations should be looing at different ways of using social networking tools for internal communication. Again, it’s a question of choosing the correct tool. Employees in a high-tech company might be interested in the boss’ tweets, whereas such a tool would not be so well regarded by the staff at a more culturally conservative organization.
Social networking tools are not a panacea for all communication needs, but the right tool, used in the right way, can perform a very useful function.
