Specialty Medical Chemicals

Specialty Medical Chemicals, a company known for developing chemicals that bind together drugs so that they can be taken/ingested by people, provides a case where employees’ behaviors and attitudes are blamed for the company’s problems when it really comes down to systemic failures. 

In 1997, a headhunting agency brought in Carl Burke to be the new CEO of Specialty Medical Chemicals.  Burke’s background consists of working in sales and marketing positions within large pharmaceutical companies, such as Merck.  As the new CEO, Burke wants to get to know his people and the business of the company, he also came in with ideas about stimulating growth by moving in the biotech direction.  In order to get to know his people, Burke focused on his leadership team, which consisted of the six managers overseeing the different segments of the business.  Burke would try to have meetings with the team every Monday morning, where he would try to get the team to be collectively responsible for the company by encouraging them to debate about different aspects of the company.  The CEO’s was faced with resistance as each person only wanted to comment on their own area, not others.

Although Burke’s rhetoric suggested that he cared about his people, he wanted them to fit into his leadership style rather than taking the time to really get to know the team to adjust his style and capitalize on their strengths.  Instead, at the suggestion of the headhunting agency, Burke hired Laura Wells, a consulting psychologist to come in and analyze the six leaders.  Laura used several methods to extract information on the leaders and provided Burke with an analysis of their strengths, weaknesses, and recommendations for their positions for the future.

What Carl Burke fails to see is that the issue is not his people, but the system.  At Burke’s former company, the leadership team worked together to be accountable for all areas because the environment supported it.  To walk into a company and expect the leadership team to fit into this type of leadership style, which is obviously not what they were used to, in three months is unrealistic.  It is clear that the leaders at SMC were coming from a different place, evidenced by their personnel history.  When Burke investigated the personnal files/review process of the leaders, he discovered that although they had an elaborate process, everyone had been given high ratings, thus it is safe to assume that their former supervisor did not provide honest feedback about their performance.  If they haven’t been told how they are performing, how can Burke expect them to feel confident in commenting about their areas as well as the areas of others?  Open dialogue and sharing of ideas was obviously not encouraged under the previous CEO, so Burke is wrong to expect the leaders to fit into his mold of what leadership looks like.  Since most of the leaders don’t fit into Burke’s mold, his solution is to realign and possibly hire from the outside. 

Bringing in Laura Wells didn’t help the situation because her job is to analyze people, which puts the focus on the employees as opposed to the system.  What is interesting about Laura’s assessment is that she tested the leaders and then compared them to “Exec Norms.”  Where do these norms come from?  Who decides what is the norm?  How is this information useful?  Measuring cognitive and intellectual functioning implies that these things are fixed, but a good leader understands that this is a self-fulfilling prophecy.  If we believe that our cognitive ability is fixed, we do not strive to achieve seemingly unobtainable goals because we are already convinced that we cannot meet them.  If Burke uses this logic, his leaders really will never grow because they will not receive the encouragement that they need to challenge themselves to be more strategic. 

I think that Burke needs to throw these assessments out the window and sit down with his leaders on an individual level and get to know them.  Burke needs to understand why these people are there, what motivates them, and what he can do to improve the system.

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