Novo Nordisk is a global pharmaceutical company with more than 95 years of innovation and leadership within diabetes treatment.
We have interviewed Niels Abel Bonde, Managing Director at Novo Nordisk, to get his perspective on strategy acceleration.
Why did you at Novo Nordisk implement strategy acceleration?
Sweden was chosen to be a pilot country for a new way to execute strategy. There had previously been frustration in management that whenever we came up with a strategy, large parts of it did not succeed. We managed to execute in certain areas, but failed in others—we simply wanted our strategy to have a larger and faster impact.
We were good at creating strategies and anchoring the strategy. We were at least as good as other companies in our industry to execute strategies. We would initiate the strategy execution but after 6-12 months it would stop. We felt that not enough happened and we fell back into old patterns straight away and never took that big leap. We at Novo Nordisk felt a need to become better at doing what we said we would do.
We see a lot changing in the world and with our customers. In the past, you could be successful at sales by having more salespeople than the competition. Our customers are in healthcare and today a completely different dialogue with the customers is needed. The most successful salesperson and sales organization is the one that best understands the customer’s needs and can deliver value based on that. We saw a huge need to readjust our organization to be more customer-oriented. This included all departments, not only our sales organization. Before we had been steering our organization on only KPIs, but we realized it was not enough. We had started a few different strategy initiatives previously but we never reached the goal. We knew we needed a structured method and tool to make it happen.
A challenge we have faced in the past is the difficulty of getting the whole organization on board, to get everybody in the teams to understand how they could contribute to the goals. We realized that everybody in the organization had to understand the goals and how to get there.
What did you want to achieve?
We had a new strategy in Novo Nordisk globally that involved turning a decreasing market share into an increasing one, while also becoming more customer-oriented.
What goals did you create?
The most important goal (MIG) we started with was therefore increased market share. We were in a phase where we had lost market shares for several years, which was very worrying. Therefore, we decided that the most important goal would be to increase our market share. We aimed very high and set the goal at 30% higher market share than what was in the previous strategy. We at Novo Nordisk were aware that it was an ambitious goal but we felt that we really wanted to go for it and engage the whole organization.
We formulated two MIGs for the organization:
- MIG 1 – increase market share in Product Area 1*
- MIG 2 – increase market share in Product Area 2*
(*) = For competitive reasons and sensitive information the Product areas are not specified
You have worked according to the acceleration method and with an acceleration product for a little more than a year now—what results have you seen?
We at Novo Nordisk exceeded the goal for MIG 1 during the planned time period, one year. We have managed to turn several years of a declining market share to an increasing market share and also see how we can continue to accelerate the market share. We managed to get the whole organization involved in MIG 1—all teams have participated in achieving the goal and everyone has contributed with their own MIGs. We could quickly see success in the acceleration. We had set an easy and clear goal that was easy for everyone to understand which contributed to accelerating MIG 1 according to plan. We had a step-by-step approach to MIG 2, which was to be carried out gradually.
We still have a lot of ongoing activities connected to the MIGs we created and we can see how this affected the results. We can see that we will increase the results even more in the future.
Have you seen any other results in the organization as a consequence of your new way of working?
When it comes to adjustments within the organization, we have become a lot more proactive and better at executing the strategy as well as better at steering and measuring the strategy execution. According to our main focus, we are a lot better at customer relations, we have simply become better at selling.
Increased focus on the MIGs has helped all departments at Novo Nordisk to focus on the most important goal, which right now is sales and helping more patients. If sales increase so will the market shares.
The marketing department’s focus on a more value-based message brings forth the merits of Novo Nordisk and our products—instead of just highlighting typical product benefits we show how we can help more patients and how we can be price efficient despite our products’ very high quality.
Human Resources at Novo Nordisk have created a partially new bonus and career system, which also rewards proactivity and acceleration of the strategy execution, i.e. does not only reward outcome. HR has also integrated the acceleration method in our global improvement work within Performance Principles (Performance Management) which consists of Purpose, Dialogue, Growth.
The department of Clinical Medical Regulatory (simplified, they do research and conduct different studies for a therapy area or drug, and gets it approved) has also worked according to their MIGs and most important activities to support the overall MIG. The acceleration method has helped us work in a more focused and efficient way with our clients. At Novo Nordisk we have also built a better understanding of how teamwork can contribute to the goal and work better across the organization.
Describe how you worked with the acceleration method and the impact you’ve seen in the management team and among the leaders
Novo Nordisk started the acceleration work together with Howwe Technologies in the fall of 2017. The work started in the management group. We created interest, made sure everyone felt ownership, and had the authority to push this work out into the organization. Every manager and team leader involved their employees and made sure that the different goals for the acceleration came from the bottom and up. During 2018 the acceleration work has been in full swing within the organization with everyone involved.
Being in full swing means that we at Novo Nordisk continuously allocate time to focus and be more proactive. We began with 10 percent of the time and are now at 30 percent of the time is dedicated to “the most important”, i.e. what we focus on and our MIGs. This is not additional time; we also worked hard before, but this is time that is freed up from the whirlwind and our old habits. Initially, the time that was allocated to strategy execution was perceived as being time on top of the already high workload. As more employees understood “how”, most of them realized that the prioritized time was already part of what each employee tried to achieve for the desired improvement. The freed-up time is now used for what is strategically most important to us.
Being in full swing also means holding our 15-minute acceleration meetings, or Boost meetings, as we call them. We at Novo Nordisk follow up on how acceleration and strategy execution has gone during the past week, as well as making new commitments for the coming week regarding the most important activities. This is done by the CEO and is distributed to all managers, team leaders, and their employees at a set time, on a fixed day of the week and it is given the highest priority. At this meeting and during the week we use a Digital Management product that can steer and measure the most important “right” activities and their progress. We link the progress to a likely market share increase (MIG), and check the outcome so that expected improvement and actual improvement coincide. The initial challenge was to get everyone to work according to the same method and the same “HOW”. In the beginning, in order to make it work, we had to make a few modifications linked to different target groups. Many years’ behavior and work habits were deeply ingrained and the journey has not always been easy. Every manager at Novo Nordisk has a responsibility for their area, but now also a clear responsibility for what is most important for our company. Every employee had habits that needed to change. Our motto at Novo Nordisk was: “more of the same” did not suffice. We have had and still have, conflicts quite regularly. In the beginning, this was seen as something negative, but over time we have come to see the value of having to make priorities earlier in the process. It is better than two or three managers discuss and decide “the most important” before an important initiative is started, instead of each department only focusing on what is most important for them.
The management group has realized how much work it actually takes to anchor a decision. We at Novo Nordisk had underestimated this for many years. Before we spent a few hours on communication but this is not enough. All employees in our organization participate in the acceleration work; it takes a lot of work to involve everyone but it is worth it. It is important to be able to have the stamina to continue over the long haul and gradually succeed with the strategy and the goals we have set.
For the leaders, it has meant a new way to lead their teams. In the beginning, it is demanding to always focus on what is most important, what are we doing TODAY/THIS WEEK. To make everyone allocate time blocks to execute the strategic activities is a challenge, but discipline is important, to follow up and have managers be good role models. The management team has worked a lot with the leaders, scheduling meetings with all the leaders and support them in the work with their teams.
The big benefits with the acceleration method that have made Novo Nordisk succeed
- To truly succeed with the strategy execution even faster than what we had decided.
- To rapidly decide on a focus and have everyone work on the most important activities to support this focus.
- Focus on strategy execution and MIGs; everyone in the organization working towards the same goal.
- Focus on steering the right activities and weekly follow-up on the acceleration.
- To have a digital tool with a dashboard that visualizes the progress has been a huge advantage. This way we have been able to check that progress is made according to plan.
- We have worked better across departments than before. With the help of this method, it is easy to see what different areas contribute and this creates a better understanding of each other and less “silo thinking” within the organization.
What happens now?
We have achieved our two Most Important Goals and we continue with new MIGs. We at Novo Nordisk will continue with the acceleration method and Digital Management. We do not see it as a finished project but rather as a permanent way of working in order to execute this strategy. We now have a method and a structure that work and we feel we have a 100% “buy-in” from everyone. We see that it is important to continue with the weekly Boost meetings (Acceleration Meetings), to stay disciplined, to keep the focus on the most important activities, and steer and follow up in the digital management application.
In summary, we at Novo Nordisk see that the acceleration method has fundamentally changed the way we view how to succeed with strategy execution. We have found a method that works for us and we will continue working according to it and we see it as a part of our everyday operations. Our company has decided to consciously work to become more business agile.
Continue reading the Strategy Acceleration blog series
This blog series is based on the book “Strategy Acceleration”. It is made for everyone that wants to learn how to execute and to realize your company strategy. It will give you the practical know-how to transform your strategy from words on a piece of paper into real everyday action.