Change, yes we can: The Amgen Italy Case

All too often, attempts to change the organizational culture in a company turn out to be no more than wishful thinking: certain habits and practices seem just too ingrained to modify. Resistance to change can loom like an insurmountable obstacle for a management team that’s decided make a radical transformation of the corporate environment. And the issue reaches critical mass if there’s a handover at the top of the organization, with new leaders intent on making a break with the past.

And yet change is possible, and can even happen relatively quickly. In fact, in just three years, a company can go from the bottom of the ranking to the very top in terms of employee satisfaction in a big multinational group.This is the story of Amgen Italy , the Italian subsidiary of a California-based, publicly-traded biotech and pharmaceutical company.

The trigger for this transformation was a complicated and actually painful moment in the history of the company. Founded in 2002 with a highly-qualified team of professionals, for the first few years the Amgen Italy “startup” worked side by side with the long-time Italian distributor of the Californian parent company, successfully implementing a co-marketing approach. But new legislation forced the two companies to merge in 2008, prompting a drastic cut in the workforce: half of the employees lost their jobs.

Along with the inevitable repercussions from the layoffs on the corporate climate, there was the added difficulty of integrating the culture of the “young” subsidiary of an American multinational (Amgen Italy) with a traditional family-run Italian firm (the long-term distributor). The immediate fallout was a palpable lack of team spirit and cooperation among the various departments. And management, for its part, was focused solely on financial performance, and paid little attention to engaging employees. All this was clearly revealed by a 2012 internal survey on organizational environment in Amgen subsidiaries.

For the new General Manager of Amgen Italy, who had recently taken the helm, it was urgent to try to reverse the direction of the company. But any intervention couldn’t be handed down from above; instead it had to be deployed on several levels, like “work flow”, with all employees playing a proactive part.

The first area of intervention was career opportunities: limiting recruitment of qualified candidates from outside the company (which had been the strategy up till this point) and working more on growing in-house talent. The approach here was to invest in training, and helping employees to embrace the corporate vision. And the results were readily apparent in the form of enhanced motivation, satisfaction, and loyalty toward the company.

Another pressing problem was excessive bureaucracy within the organization, which left little room for delegation or autonomy. In this case, top priority was to work with company leaders, urging them to take a different approach with their employees, and redesigning mechanisms for internal assessments as well. Some of the buzzwords that described this effort: simplify, with a task force assigned to overhauling internal processes to give individuals more autonomy; delegate, thanks to revamped decision-making processes; interfunctional collaboration, to overcome the barriers that prevented possible synergies in the past. Added to all this was a strong motivation to engage employees in new projects centering on social responsibility promoted by the company. Overall, Amgen Italy employees came out of all this with a sense of empowerment, enabling them to make critical decisions autonomously.

Along with HR interventions and process re-engineering, the company also had to rethink internal communication to enhance transparency. To encourage open discussion on any and all business-related issues, regular meetings were encouraged between the General Manager, the management team and the staff. Everyone had the chance to ask questions and bring up problems with no topic off-limits. The main source of inspiration here was the Japanese notion of gemba, which holds that most organizational problems can be clearly seen in “the real place” where activities are actually carried out.

Ramifications of the new approach were quick in coming and long-lasting in the Italian subsidiary. This was corroborated by the Amgen 2015 survey, which found a phenomenal escalation in employee alignment with company objectives; recognition and identification with Amgen values, and a renewed sense of optimism for the future of the organization. But here’s the real takeaway: all this was thanks to interventions centering on the cultural and organizational dimensions of the company, nothing to do with compensation. In fact, the dynamics of internal incentives didn’t change at all.

And this is no flash in the pan either. Amgen Italy has continued to rack up exceptional results in terms of employee satisfaction, as demonstrated by its 8th place ranking in Great Places to Work 2016. What also emerged here, though, were areas where there may be room for improvement. For example, employees see some forms of control and pressure as excessive, and want to see them dialed back. This goes to show that it’s never a “done deal” - striking the perfect balance between improving company performance and employee satisfaction is an ongoing effort that calls for continual attention and reflection by management.

• To push past cultural resistance and bring about real change, leaders first have to prove their credibility and earn the trust of their collaborators. Transparency, engagement in decision-making, a willingness to dialogue – these are all important signals that can encourage employees to move beyond their preconceptions, and can generate a sense of belonging and inclusion in the company community.
  
  

• Financial incentives can help attract qualified, competent people, but in and of itself this isn’t enough to engender loyalty, dedication and motivation. To engage on these aspects, it’s a must to reflect on corporate climate, with the aim of creating a positive and pleasant work environment.
  
  

• Ambidexterity is the organisation’s ability to perform daily activities efficiently and effectively, while keeping eyes on the horizon, taking a long-term development outlook. To encourage employees to see their work within a broader framework, it’s essential to instill in them a sense of community, which pushes them to look beyond their routine activities to see the big picture.