CHANGING THE MINDSETS AND BEHAVIORS OF
17,000 PEOPLE… ONE PERSON AT A TIME
In late 2007, the Israeli drug maker Teva launched a generic version of Wyeth Pharmaceuticals’ patented drug Protonix, used to treat stomach acid reflux. Wyeth’s sales of this drug were more than $1 billion for the first nine months of 2007, but dropped by nearly 70 percent within two months of the Teva introduction.1 Prompted by this and other challenges, Michael Kamarck, president of Wyeth’s manufacturing group, TO&PS (Technical Operations & Product Supply), decided to revolutionize the way its 17,000 people operated. Kamarck set an ambitious goal: cut manufacturing costs by 25 percent. At the same time, TO&PS would need to keep improving the quality and compliance of its products, while finding ways to transform the capabilities, mindsets, and behaviors of its employees.
By mid-2009, just a year and a half after Kamarck had initiated the transformation, TO&PS was a different place. Most sites had cut annualized costs by the targeted 25 percent, and several had exceeded this goal. Overall TO&PS saved more than $250 million and was well on its way to achieving its target of $400 million in total savings by the end of 2010. Managers and workers had also been transformed. Despite hurdles and dark moments, the experience proved to be enlightening to Wyeth employees at all levels of the company. Among them was Charles Schneider, managing director of the company’s biotechnology plant in Pearl River, New York: “This last year has been sincerely fun…. We went through some of the hardest challenges I’ve ever encountered and I’m still having fun.”2
How exactly did TO&PS accomplish this transformation?
The company’s total revenue in 2007 was $22 billion.
Quotations are from interviews with the author, unless otherwise cited.
Isaac Waisberg prepared this case under the supervision of Professor Robert I. Sutton and Professor Hayagreeva Rao as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.
Copyright © 2009 by the Board of Trustees of the Leland Stanford Junior University. All rights reserved. To order copies or request permission to reproduce materials, e-mail the Case Writing Office at: firstname.lastname@example.org or write: Case Writing Office, Stanford Graduate School of Business, 518 Memorial Way, Stanford University, Stanford, CA 94305-5015. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means –– electronic, mechanical, photocopying, recording, or otherwise –– without the permission of the Stanford Graduate School of Business.
Wyeth Pharmaceuticals: Changing the Mindsets and Behaviors of 17,000 People… One Person at a Time: L-15
WYETH AND THE TO&PS ORGANIZATION
Wyeth began in 1860, when John Wyeth and his younger brother, Frank, opened a retail store with a small research lab in Philadelphia. In 1862, on the suggestion of doctors, they began to manufacture large quantities of commonly ordered medicines, and published their first catalog of drug preparations for wholesale distribution. In 1864, they began supplying medicines to the Union army during the Civil War. Over the next few decades, the company innovated massproduction techniques for medicines, expanded into Canada, and began producing vaccines. It was incorporated as American Home Products (AHP) in 1926.
In the 1930s and 1940s, AHP acquired several pharmaceutical laboratories, and in 1983, prescription drugs and medical supplies accounted for 47 percent of sales and 62 percent of profits. In 1968, the company introduced Inderal, a drug that reduces blood pressure and slows the heartbeat, and by 1983 supplied more than half of the U.S. market for beta-blocker drugs. The company was also busy developing new pharmaceuticals: in 1985 alone, it...
Please join StudyMode to read the full document