Preface: As a number of Fortune 500 firms introduce “start-ups” within their own entities to transform their cultures into more innovative environments, what strategies might be deployed to accelerate successful change? This Q&A is part of a series inspired by Fortune’s Most Admired Company rankings.[1] The process includes interviewing executives and professors for their insights on the specific attributes that are measured to derive these rankings and their potential role in company transformation. In this interview, Amy Schulman (CEO of Lyndra Therapeutics, Polaris Partner and Senior Lecturer at the Harvard Business School) shares ideas on innovation and people management to help these start-ups’ leaders achieve their aspirations.
Q. Last year, a Forbes’ article[2] pointed to a number of highly regarded firms (Coca-Cola, MetLife, General Electric, Cisco, American Express, and others) which had recently created new start-up entities within their own organizations to help elevate entrepreneurism and creativity. As an executive who has worked in a number of very large organizations but often in entrepreneurial roles; what are your thoughts on this trend?
A. It is a commendable move, innovation is critical to elevating a company’s existing value proposition with current and new clients. Think about the firms that you mentioned; many have been extraordinarily successful for a long time. They have proven playbooks of success that have served their organizations and staff well. How disruptive can one be if you are trying to perform while transforming?
In my experience with start-ups, the clarity around urgency (surviving or going bankrupt) is woven into the daily operating culture. In general, start-ups tend to be more agile than their Fortune 500 counterparts. Therefore, before you assume you can adopt that operating model and engraft it onto an existing structure or create an offline skunk works, make sure there is realistic clarity about this venture and your expectations for it. What about how it is staffed? Is it a rotational assignment where there is an assumed commitment to have these people return back to their functional areas? Can you create a realistic start-up environment; if it performs then there are new career opportunities, if it does not, then there are some tough decisions that will need to be made. While there is not a right or wrong approach, the C-Suite team should clearly communicate what the assumptions and expectations are.
Q. Speaking of talent, a common theme for a number of these transformation C-Suite Q&As has been on the importance of people. When you were at DLA Piper, your book of business was over $60m, a sum larger than a number of other law firm’s total annual billings. With over 3,000 attorneys at the firm during the time and the challenge of leading a number of these staff members, the Harvard Business School published a case study on your leadership traits and efforts. Given this case as well as your CEO roles at Lyndra and Arsia Therapeutics, what is a people management recommendation for these informed talent pools?
A. Know yourself, know your team, and the people around; be willing to say “no”. Don’t rely on platitudes, most stories of failure are ill designed stories of heroics. Learn to discuss the undiscussable with grace and care, making individual choices and tradeoffs is critical but it’s not forever. It’s in the moment and one can adjust.
Q. Finally, what happens for those companies which don’t have a burning platform for change? In particular, how do you drive change when the status quo is pretty comfortable for existing leaders? For instance, you had a C-Suite role at Pfizer and yet elected to introduce and champion a very radical business model, which probably was considered quite controversial at the time? What was the “why” and “how” for your Pfizer Legal Alliance?
A. As for the “why”, my view of a lawyer’s value add is not tethered to the time spent. I elected to introduce a different billing model which was based on flat fees that was intended to elevate the level of teaming among and between the nineteen external law firms as well as Pfizer’s internal counsel team. The results led to greater hours, efficiency and better results.
As for the “how”, it was very challenging. Still, the three major change management steps that I had to champion were
- Transforming while performing: While leading the legal team we had to develop a compelling strategy and target metrics that the team and the rest of the C-Suite had to embrace and support.
- Enabling decision making to others: I established an Alliance Management Team and delegated significant operational decision making power to them. This step sped up the velocity of change. Despite the uncertainty associated with co-creating new playbooks, they were excited to be part of something that was delving into uncharted waters.
- Building trust with external stakeholders: I had to have some challenging talks with law firms to address their qualms about what the value proposition was for them. After all, billable hours had always been the assumed norm for engaging with us. But after they understood that this plan was not just a dressed up version of squeezing for savings but a different way to create value through expanding the pie of opportunity, most embraced the new model. They came to realize that the less time everyone stressed about hours, the more brain power that could be invested in uncovering new ways to drive business success for Pfizer and in turn, the company’s committed collaborators.
Upon reflection over the years, I wonder if I had really understood the magnitude of what I was proposing, would I have started this journey. It was controversial and risky. Like most entrepreneurs I was motivated by a strong belief that there was a better way and that change would help the organization, the profession and the people connected to the effort.
[1] Key attribute measurements for Fortune’s Most Admired Company rankings include: innovation, people management, use of corporate assets, social responsibility, quality of management, financial soundness, long-term investment value, quality of products and services, as well as global competitiveness. Per the most recent 2016 findings, Apple had been the top ranked Fortune Most Admired Company for an unprecedented nine consecutive years.
[2] Forbes, http://fortune.com/2015/04/26/startups-inside-giant-companies/ , April 26, 2015
Professor Amy Schulman joined Harvard Business School’s Faculty as a Senior Lecturer in July 2014. She also became the CEO of Arsia, a biotechnology company focused on improving patients’ lives through new modes of drug delivery, and a venture partner at Polaris, a leading venture capital firm with approximately $4 billion under management in August of 2014. Prior to that, Ms. Schulman led Pfizer Inc.’s $4 billion Consumer Healthcare business. She also served as Executive Vice President and General Counsel of Pfizer Inc. Ms. Schulman originally joined Pfizer in 2008 as General Counsel and saw the company through its $68 billion acquisition of Wyeth, the largest pharmaceutical acquisition in history. Before joining Pfizer, Ms. Schulman was a partner at DLA Piper, where she was a member of the Board and Executive Policy Committees. In 2013 Fortune magazine named her one of the “50 Most Powerful Women in Business.” That same year, The American Lawyer named her one of the “Top 50 Innovators,” and The National Law Journal named her one of “The 100 Most Influential Lawyers in America.” She also has been recognized by The American Bar Association, which honored her with the Margaret Brent Women Lawyers of Achievement award in 2012. In 2009 Forbes magazine included her on its inaugural list of “The World’s Most Powerful Women.” A Phi Beta Kappa graduate of Wesleyan University, Ms. Schulman earned her J.D. from Yale Law School in 1989. She serves on the Board of Directors of Alnylam, Inc., The Brookings Institution, and Wesleyan University.