Strategic behaviour

These human factors are important in any company but especially so in yours because your colleagues are atypical. Compared to most commercial organisations, pharma and other life sciences companies employ a disproportionate number of highly educated people. Further, life sciences workers span a bewildering range of expertise, from their many scientific disciplines to health economics, from patent law to regulatory affairs and from medical to marketing. Combined with the complexity of the industry’s scientific and socio-political environment, this combination of higher education and hyper-specialisation means that life sciences companies don’t function in the same way as, for example, a retail operation or even a technology firm. The entire functioning of a life sciences company depends on work that is highly discretionary, in the sense that individuals can’t be micro-managed and must be trusted to do their jobs well. As a result of this special situation, your company and others in our industry have a specific problem: successful strategising depends more on individual behaviour than on processes, systems and controls.

If managing the strategy process depends on our colleagues’ behaviour, we must first be clear about what we mean by the nebulous, ill-defined concept of strategic behaviour. As ever with academics, there is debate around which behaviours influence the highly discretionary work of strategising, but a reasonable consensus is captured in the box below.

Typically, strategising is more effective when the behaviour of those involved is good along all three of these dimensions and vice versa. However, the three kinds of behaviour are independent. For example, if you’ve ever known a colleague who was technically brilliant but difficult to work with, you have probably seen someone with good task behaviours but bad organisational citizenship behaviours. The three behaviours also have a compound effect on the strategy process. For example, you can have a strategy team whose members are great at their individual jobs (task behaviours) and work well together (citizenship behaviours), but the strategy is ruined by severely counterproductive behaviour of just one or two key people. If you lead a strategy team, for example a brand or therapy area team, then your challenge is to optimise task and organisational citizenship behaviour and to minimise counterproductive behaviour. In the following sections, I’ll describe what my research has uncovered about how to do that in the exceptional context of life sciences companies.

The three dimensions of strategic behaviour

Strategic behaviour, the discretionary behaviour of strategists, can be understood along three dimensions:

Task behaviours: The behaviour involved in accomplishing the specific, often technical tasks associated with strategising. Task behaviour varies from highly competent to highly incompetent, depending on how well it contributes to task achievement.

Organisational citizenship behaviours: The behaviour involved in enabling the wider functioning of the strategy process, beyond the individual’s tasks. Organisational citizenship behaviour varies from a minimum of contractually required behaviour to a maximum of extensive extra-role behaviour that improves wider strategising.

Counterproductive behaviours: Those individual behaviours that explicitly reduce the effectiveness of the strategy process. Counterproductive behaviour varies from no significant counterproductive behaviours to multiple, egregious behaviours that collectively prevent or misdirect effective strategising.

Good task behaviour can be influenced by organisational factors such as resources. For example, a business intelligence analyst can’t do a good job without the necessary data. But if those extrinsic factors are set aside, the task behaviour of an individual is largely the product of motivation and technical competence, both of which can be managed to optimise outcomes.

Take the example of brand managers I’ve observed, whose strategic task was to understand market segmentation. If their technical competence was low (for example, if they confused disease categories with segments), then their task behaviour would be incompetent, even if they were highly motivated. Similarly, if their motivation was low (for example, if they felt unable to achieve the task or unlikely to be rewarded for competence), then their task behaviour may well be incompetent even if they were technically competent. These individual factors that shape task behaviours point to how it can be optimised. In our brand managers’ example, training in how to apply contextual segmentation and test segment validity would improve their technical competence. It would also improve their self-belief and in turn, with appropriate encouragement and rewards, their motivation. Conversely, no amount of training would improve their task behaviour if their motivation wasn’t addressed and vice versa.

The challenge of managing task behaviours, and thereby improving your team’s strategising, is often that the problems lie beyond the individual responsible for the task.

If, in our example, the company doesn’t have good knowledge of segmentation theory, then it is unlikely that the brand managers’ competency weaknesses would be recognised and fixed.

Equally, if they lacked motivation as the result of poor business unit leadership or corporate hygiene factors (eg, working conditions), then it would be hard to correct the root causes of their poor task behaviour. Managing task behaviour is then as much an organisational and leadership issue as it is an individual one.

Good organisational citizenship behaviours are also the result of extrinsic (organisational) and intrinsic (individual) factors. For example, the behaviour of medical affairs managers will be influenced by the culture of their profession as well as by factors specific to their roles and their personalities. Leaving those wider, and largely uncontrollable, factors to one side, good organisational citizenship is a compound of personal attributes and cultural expectations. Again, both can be managed to optimise strategy-making but not without difficulty.

In one example of a company I studied, personal attributes and cultural expectations amplified each other to cause organisational citizenship behaviour that significantly hindered strategising. In this case, the leader’s beliefs in ‘healthy rivalry’ led to a culture that normalised internal competition between departments. At the same time, a recruitment bias towards ‘dynamic’ individuals in commercial functions had favoured ambitious, career-focused young marketers and salespeople.

As you might imagine, these two factors had a synergistic effect, leading to behaviours that prioritised individual or sometimes departmental achievement over the wider working of the organisation’s strategy process. In practical terms, intra-organisational conflict became normalised and this hindered cross-functional strategising. This situation was not resolved until the leader was replaced by someone who discouraged internal rivalry and prioritised the recruitment of people more predisposed towards cooperative working. Then, the same interaction between company culture and individual attributes changed the direction of the synergy, leading to much better organisational citizenship behaviours and, consequently, more effective strategising.

Comparing task behaviours and organisational citizenship behaviours reveals a paradox in how they are best managed. Although task behaviour happens at the level of the individual, steps to manage it are often at the organisational level, such as how leaders behave and competencies are developed. At the same time, organisational citizen behaviour happens at the level of departments and organisations but its management is often at an individual level, as with recruitment policy and the cultural expectations set for individual behaviour.

The third dimension of strategic behaviour is both the most problematic and the most difficult to manage. Counterproductive behaviour is usually deeply embedded and often unconscious.

For example, some therapy area leaders I’ve studied, while otherwise well-meaning and hardworking, showed multiple counterproductive behaviours. These rendered their group’s strategising largely ineffective but they were oblivious of this. The unconscious nature of counterproductive behaviour means that managing it involves first identifying it and then replacing it with more productive habits.

In this example, the therapy area leaders were blind to their various counterproductive behaviours because they mistook them for ostensibly good behaviours. For example, they strongly espoused pragmatism and shunned ‘book theory’ but, in doing so, they used terminology related to strategy (‘positioning’ for example) so loosely that it became meaningless. They also enthusiastically favoured openness to new ideas but this resulted in ‘fad surfing’, assigning undue importance to new ideas without evaluation. Finally, under the mantra that ‘good enough is close enough’, they encouraged a ‘tick box’ approach to strategising, one that completed the strategy process prescribed by corporate but without adding any real value. The leaders’ good intentions made their failings, and the weakness of the resultant strategy, all the more disappointing and their resolution all the more difficult. The situation was only improved by a significant period of coaching and mentoring. This began with illuminating the practical implications of their behaviours and how they were masked by good intentions. It continued with a slow process of embedding productive behaviours such as semantic precision, reference to strategy fundamentals and validation of strategy processes. This improved their therapy areas’ strategising hugely but only slowly.

Countering counterproductive behaviour again highlights the behavioural linkages between the individual and the organisation. Although the therapy area leaders’ behaviours were theirs alone, they negatively influenced the strategising of entire business units. Equally, when their behaviour changed, that improved the strategising of their teams. In this sense, strategy teams are like small villages because behaviours in any part of them echo around them and shape the strategy process as a whole.

In the constant quest for a more effective and more efficient way of making and executing strategy, life sciences firms regularly revise their data inputs, their analytical methods and the processes they use for strategising. Firms pay much less attention to the human, behavioural issues that influence how strong their strategy is. This is an example of doing what’s easy, rather than what’s right. Behavioural issues, along with the other human factors discussed earlier in this series, have a much bigger impact on strategy than incremental improvements to its technicalities. But as we all know from our lived experience, changing people and their behaviours is difficult, which is why process change is preferred. As with much else in life, a strategist’s choice is between the easy way and the right way.

Professor Brian D Smith works at SDA Bocconi and the University of Hertfordshire. He welcomes comments and previous articles in this series, and his other writing for PME, can be found at www.pragmedic.com