A big industrial player of the biopharma industry acquires an equipment supplier and develops the right organizational design to capture the value promised to investors and employees.
Integrations are often accompanied by organizational redesign to integrate the two companies into one business entity, remove duplicated activities and define optimal structure, processes and roles to achieve the full potential of the deal.
Organizational design is undoubtedly a powerful tool for leaders to shape a new company that will meet its strategic objectives and produce the promised value of a merger.
However, most of the biopharma executives we interviewed over the last three years were disappointed with the outcomes of their organizational redesign efforts. Indeed, a company wishing to reorganize itself after a merger has to act quickly to avoid disruption of the business while taking up a few challenges :
Knowing the challenges inherent to organizational redesign, our client's management wanted to improve the odds for success and required Larka to create a powerful organization that truly enables strategy execution.
In a 9-month mission, Larka proceeded to the entire organization redesign and helped its client achieve the value of its merger. Our mission covered the following tasks :
The first step consisted in discussing with our client's management the strategic objectives of the merger in order to align the new organizational design on the promised value. Our team has assessed the organizational design of the two entities and analyzed their structure, processes and people. The objective was to understand what each entity brought to the merger, the balance of capabilities required to capture maximum value, and how the future company would fulfill the promise of the deal rationale.
This preliminary step allowed us to define a clear set of design principles shaping the objectives and outcomes of the mission.
Then our team started drafting the organizational design blueprint serving the principles defined in the previous phase. This second step consisted in organizing structure, processes and people of the future post-merger company. In order to get the organizational design right and capture the full value of the deal, we used a holistic set of levers across the three organizational elements - structure, processes and people :
We have designed a rigorous reorganization plan with clear structure, streamlined processes aligned with the company's layers, capabilities, talents, vision and strategy and focusing management attention on strategic priorities and critical operations.
The third part of our mission consisted in helping our client's management designing clear and compelling communication plan to shift mind-sets of reluctant employees. Indeed, any organizational design has a strong impact on employees as it might change whom they report to, whom they work with and how work gets done. We advised leaders to address personal messages explaining the rationales for change, demonstrating the benefits of a new design and offering people the possibility to ask questions. Having employees on board is key to manage a successful transformation.
Successful redesigns also define the risks of implementation and develop mitigation plans. Every organizational design carries risks of interruption of business continuity, employee defection, lack of engagement or poor implementation. As part of our mission, we helped our client identify those risks early on and elaborate strategies to allow a smooth transition.
We have then helped our client building an implementation and change management plan. We defined with our client, integration teams responsible for fully executing their detailed integration plans and supporting employees and managers understanding their new roles, hierarchies and work processes. We designed heat maps of key operational changes to help the integration teams prioritize the areas of the business requiring the most change management support. Change management is indeed critical to the sustained success of an organizational transformation.
Finally we have defined key performance indicators to track success of the organization redesign. This allowed our client to measure the short-term impact of the changes and to spot early warning signs of disruption.
In a 9-month mission, we have helped our client develop and implement an organizational design allowing them to achieve their strategic objectives and capture the full value of their merger. Thanks to our extensive experience in M&A and our modern and holistic approach of organizational design, we have improved their short-term returns and strengthened their long-term organizational health. Having participated to the establishment of this strong new player of the biopharma industry made us very proud.