Specialty Medical Chemicals (Case: HBS-9-399-094)

Dr. Winthrop received over 200 patents in his lifetime. The company was basically built off of his innovations and the day to day management of the company was done by professional business people. He was the creative researcher that built the company. A corporate system of keep to the old seems to have been built into the fabric of the company. Barry Tompkins was just the type of CEO that could build that type of corporate system, and keep it maintainable. Very little creativity seemed to ever be encouraged at SMC.

When looking for a replacement for Tompkins, the board decided to look for a person that would not undo “a lot of what Barry had accomplished.” Not really possible, as Tompkins had built a company that was systematic and steady, not innovative and growth oriented.

The job search landed a biology major with New Product Marketing experience. The problem being that there is little new product development at SMC and Carl has little experience in the other area’s of a pharmaceutical company.

SMC has a corporate system that does not encourage its management to work together. In fact, the system encourages them to be self interested, and greedy with information in order to protect their own needs. The annual “evaluations” continued to mark the VP’s with high marks and top salaries, even when the overall performance of the company was sub par.

Carl needs to step up and communicate with his VP’s on what he wants from them. He is waiting for them to “get it”, but they are all longtime employees of SMC, and are not familiar with the group give-and-take that his previous CEO from Merck had built into his management team. That system needs to be developed, through trust and open communication with the team members, in groups and individually.

The consultant Wells, basically told Carl everything he wanted to hear. He had already know most of what the final evaluations told him. If anything, the whole exercise was a waste of resources and time.

I think all of the management VP’s are motivated to achieve success in their own departments. Carl needs to change the system (carefully) within SMC to redirect the VP’s motivations to be the overall success of the company, and not just the individual departments. I liked his idea of changing the departments to Pharmaceuticals, Biotech, and Generics, as this will require his VP’s to start thinking about all the departments instead of just their own.