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Creating the Turnaround

My last few posts on inVentiv Health (VTIV) were picked up by PDI (PDII), the competitor I compared them to in my first post. They reached out to me and I had the chance to interview PDI’s CEO, Nancy Lurker. What she shared with me fits what my last three posts laid out – how inVentiv has grown so dramatically over the past eight years while PDI has actually shrunk. But Nancy’s insights also point to a new horizon for PDI because the company is making changes, redirecting itself, and indeed, reinventing itself.

I liked what Lurker shared about PDI. The management acknowledges past mistakes while maintaining respect for its competitors. However, Lurker says PDI is resisting the common "copy-cat" response. When a company realizes its strategy is inferior to a competitor’s, it usually, in my experience, defaults to simply trying to copy the "winning" competitor’s formula.

PDI is not doing this. It is crafting its own path.

There is a lot I could share about the interview. But today and tomorrow I am going to focus on the three most important insights in my view.

Retell the story – find a compelling "anchor"

Lurker joined PDI as CEO at the end of 2008. She came from Novartis Pharmaceuticals Corporation (the U.S. subsidiary of Novartis AG), where she served as an SVP and the chief marketing officer.

She saw that PDI had lost its way. This once innovative company had "grown rigid." It had, in other words, fallen into what I call the "metal phase" of innovation - when the innovation loses its ability to adapt to changes in the market.

Lurker had seen this symptom before in a previous employer (not Novartis). That company had grown so successful that it had stopped questioning itself. It became more sensitive to what it might lose if it changed strategy. It was extremely successful, but Lurker saw that it was growing stiff.

So Lurker jumped from that company to Pharmacia, which was an underdog at the time. People thought she was crazy because she was leaving a winner for a horse in the middle of the pack, but what she saw was that the horse in the middle was hungrier, had stronger leaders, and was pursuing a more compelling vision. The move worked for her and for that company, which grew tremendously and eventually was sold to Pfizer.

When she joined PDI, the first step in her turn-around was to "anchor" the company in the first 10 years of its existence, during which the company was innovative, flexible, and forward thinking. She retold the company narrative and she was able to get rid of the sense of fear that had engulfed PDI’s people. By using the original story of PDI, Lurker infused a sense of heritage and pride within her people.

Communicate until it hurts

For an article I have been working on for Harvard Business Review, I have been interviewing lots of leaders of large companies to understand how they use stories to shape their organizations. Microsoft’s COO, Kevin Turner, is an example of a leader that I have studied fairly extensively. He is known as a storyteller.

When we hear "storytelling" we often think of the "soft" elements of leadership, creating meaning and passion. While these are important, my research shows that leaders use a different type of story far more often. They tell short anecdotes, what I call "strategic narratives," that inform a certain type of behavior.

Examples of such anecdotes can be found at the root of all strong cultures. Japanese Zen Koans are an example. The Chinese 36 Stratagems are another. In the U.S. we often site colorful stories and aphorisms by Benjamin Franklin or Warren Buffett.

Buffett recently wrote, for example, that you don’t ask a barber if you need a haircut. What he was communicating was that you don’t ask a banker, who is paid a commission for a transaction, if you should buy a company.

Stories are powerful tools for shaping behavior and thereby directly impacting strategy. But this takes an immense amount of communication.

Lurker has been building momentum for a turn-around strategy by, among other things, focusing on constantly telling stories about the new strategy. She has lunch regularly with different employees. Her goal is that she gets to have lunch with all inside employees each year. During these lunches she makes sure to communicate her message continually and on-point. To broaden the strength of her mouthpiece, she has now gotten all of her top management team to start communicating the same points, in their own language, of course.

Applying "strategic narratives" can build a powerful advantage if you are willing to invest the effort. As Richard Nixon once said, "About the time you are writing a line you have written so often that you want to throw up, that is the time the American people will hear it."

Ask yourself the questions below to see how you can find a new energy in an old story.

1.      When you tell the story of YOUR organization, where do you start?

2.      What is the most compelling part of your organization’s history?

3.   Can you remind people of a time when your business was being particularly innovative?