Management 4.0: Putting Pharmaceutical Companies On The Path To Agile
By Hector M. Samper, principal and strategic advisor, Global Strategic Sourcing Solutions (GSSS)
In Part 1 of this three-part article series, we defined how Agile evolved and how it began to be successfully implemented across multiple industries, including pharmaceutical manufacturing. Part 2 discussed the building blocks needed to bring agility to the project world. Here in the third and final article, we show how to implement this change through a new style of management.
The main hurdle in change is changing people’s behavior. Therefore, the best approach that can be taken is self-organization.
Management 4.0
Management 4.0 is a new way of communicating and shifting organizations toward self-organization with agile approaches.1,2 To really speed up, it is necessary that most decisions are made as near as possible to the team level in collaboration with the customer. Therefore, agility is highly connected with self-organization. However, applying self-organization as a new management paradigm makes it mandatory to implement these practices in a self-organized way.
The balance of power within teams, offices, companies, and organizations needs to help managers at every level and across all sectors to transition to a more rapidly changing, diverse, and technology-led environment without widespread disruption. The fourth management revolution is about nurturing an agile mind-set to rapidly adapt to the fourth industrial revolution.
To counter this challenge, the team can embrace the management transformation by adapting common practices to capture greater value:
- Not simply using methods —> understanding the principles of flow and self-organization
- Not focusing on near-term parts of the solution —> talking about the big picture and the overall mind-set that has to be reached (to survive)
- Not enforcing a new way of management of people —> taking what people already want and can do and activating them through the mechanisms of self-organization
- Not working hard to change the system —> simply change one or two simple “things” in the environment and support the emergent change that will occur
Self-organization is also a systemic approach derived out of bionics. In the living and non-living world, all systems are based on self-organization. All open systems consisting of autonomous subsystems are bound to self-organization principles — so it’s everywhere and working at all times. The key to success is to understand these principles and their working mechanisms.
The basic idea of self-organization is not to change the subsystems (e.g., the people) but to adjust the inflow of energy/materials/projects and provide a signal that helps all the people decide in the right way and subordinate. As an analogy, imagine a road system without a traffic light system. There is no chance to instruct all the drivers as to how they should behave in every situation, and in the end, there is no chance to ensure that they follow the rules at all.
But there are two things that change everything:
- The number of cars on the street: Each area or street has a maximum capacity — when too many cars create congestion, the speed and throughput slow dramatically. If inflow is increased even further, traffic comes to a full stop.
- The traffic lights on crossroads, or the operational priority: Drivers are aware that traffic signals improve throughput compared to a four-way stop. The signal is generated out of the flowing element, based how many cars are on a specific section of the crossroad. Therefore, the signal is adjusted all the time according to the traffic, so everyone trusts the signal because it improves efficiency and helps to get faster results.
These are the basics of self-organization — one element that controls the inflow and one signal that helps every autonomous subsystem to behave in a way that helps itself and the overall system. Consequently, if the inflow is not under control, then signals are not needed. In other words, during traffic congestion, the light signals are of no help. On the other hand, if there are very few cars on the road, the traffic lights are switched off.
Management 4.0 is a paradigm shift in change management. By using the principles of self-organization, the effort needed to change a system is radically reduced. And the duration of change is dramatically cut — first experiences show that the duration of the change can be reduced to 50 percent of those of the classical ways of managing. This leads to more sustainable changes that deliver results much faster. Self-organized changes reduce the CIP (change in process) to the absolute minimum — typically one or two change steps at maximum and, as signals, they typically use the buffer consumptions of Critical Chain Project Management, as discussed in Part 2 of this series.
At the core of Management 4.0 is team alignment and collaboration to jointly find the best solutions to bring together the digital and physical worlds — team empowerment vs. hierarchical control. Decentralized decision-making needs a centralized signal.
Conclusion
In the pharmaceutical industry, the need for more agility, combined with a dramatic increase in productivity, is unquestionable. CDMOs are adapting to this demand by specializing in various services and encouraging close collaboration between multidisciplinary experts to create a more agile approach to pharmaceutical development.
While Agile commonly brings forth the concept of project management related to IT or software development, it is proving its effectiveness and efficiency in other non-IT sectors, including classic project management. But this does not come easy. Agile can only work if it also fulfills the needs of the classic project management system — so Agile has to add best practices of Lean, Theory of Constraints, and Critical Chain Project Management to really leverage its merits.
Greater agility and flexibility can save clients valuable time and help improve the value of drug pipelines. Therefore, agile principles can be used to enforce collaboration throughout the whole network.
References:
- https://www.managers.org.uk/~/media/Files/PDF/Reports/Management-40-Report.pdf
- Patrick Balve (Author), Alfred Oswald (Editor), Wolfram Muller (Editor), Management 4.0: Handbook for Agile Practices, Release 3, Books on Demand, 2019. https://www.amazon.com/Management-4-0-Patrick-Balve/dp/3749430977
Additional References For Learning And Implementing Agile Practices:
- List and comparison of current vendors of agile CCPM software - https://www.marris-consulting.com/en/points-of-view/critical-chain-project-management-software-solution
- Steve Tendon and Wolfram Muller, Hyper-Productive Knowledge Work Performance: The TameFlow Approach and Its Application to Scrum and Kanban (The Tameflow Hyper-productivity), J. Ross Publishing, 2014
- “The CIO's Guide to Breakthrough Project Portfolio Performance: Applying the Best of Critical Chain, Agile, and Lean,” Michael Hannan, Wolfram Müller and Hilbert Robinson, Fortezza Consulting, LLC; 2014
About The Authors:
Hector M. Samper is the principal and strategic advisor at Global Strategic Sourcing Solutions (GSSS), which provides expert advice to the biopharma sector, including strategies to transform and guide cross-functional business/procurement teams to generate maximum value throughout the operations life cycle. He has over 30 years of experience in capital expenditure and manufacturing operations, including indirect spend categories across North America, Europe, and Latin America. His recent experience at Sanofi included creating and leading the Strategic Vendor Management Office for the Global IT function, and heading the North America Operations and CapEx Procurement group. Prior to Sanofi, Samper worked for Amgen, Purdue Pharma, and Merck, where he held roles of increased responsibility in the global engineering, sourcing, and procurement organizations. You can contact him at hmsamper@aol.com.
Wolfram Mueller is principal and expert for agile multi-project management at Consileon Business Consultancy. He is dedicated to speed — either for projects or for changes. He has experience in over 550 agile and classic projects in IT and numerous kinds of mechanical and electronic engineering. The main theme in his work is flow — how to bring organizations to a hyper-productive state. As the author of many books and a well-known speaker, he has inspired companies to do more with less in a very short time. All this led to the invention of BlueDolphin, a community platform for self-organized changes based on the Theory of Constraints (TOC). You can reach him at Wolfram.Mueller@Change-Base.com. For a free, individualized report/benchmark of the symptoms and potential of agile project management in your organization, complete this simple, nine-question survey