Creating Strategies that Work: An Example from the Pharmaceutical Industry

James D. Ludema & Amber A. Johnson Change, Leadership, Strategy

In his book, Good to Great, Jim Collins writes that great companies have a firm understanding of three key things – what they are deeply passionate about (including core values and purpose); what drives their economic engine; and what they can be the best at in the world. To set and execute strategy, they translate these understandings into a simple, crystalline concept – called the Hedgehog Concept – and establish “Big Harry Audacious Goals” (BHAGs) to guides their efforts.

Most of the successful values-driven companies we know follow Collins’ formula to the letter. They begin with a clear understanding of their core values and purpose and then study what drives their economic engine and what they can be the best at in the world. They do this by actively engaging people inside and outside the organization in asking questions, debating ideas, shaping strategy, and designing the organization for execution, all led by senior leadership.

Using Appreciative Inquiry for Strategy Creation

Appreciative Inquiry is the best approach we know of for leading a strategy creation effort like this because it is based on three powerful principles:

  • Appreciation – understanding core values and strengths past, present, and future
  • Inquiry – systematic study of what works and what’s possible in relationship to values and strategy
  • Wholeness – engagement of all stakeholders for a fully-informed, values-driven strategi perspective

Appreciative Inquiry also provides a clear four step process for execution called the “4-D model” – Discovery, Dream, Design, and Deploy.

4D cycle

We used Appreciative Inquiry to help one of the world’s leading pharmaceutical companies, let’s call it PharmCo, align its Latin America growth strategy with its values. Since its founding more than 100 years ago, PharmCo has been dedicated to improving health and well-being around the world, led by a strong set of core values such as: Honesty & Integrity, Innovation, Promoting Life, Expanding Access to Healthcare, and Teamwork.

Shaping Strategy through Appreciative Inquiry: 4 Questions

The Latin America division has been recognized as a leader in living out the values and in financial performance, and they wanted to build on their track record by charting new values-driven growth strategies for the future. Along with our colleague, Diana Whitney, author of Appreciative Leadership, we helped PharmCo Latin America lead their stakeholders (employees, customers, consumers and government officials) through an Appreciative Inquiry process based on four core questions:

  1. Think of a time that PharmCo Latin American was at its best, a time that it was thriving and growing in a way that was fully congruent with its values. What made it possible?
  2. Imagine that tonight you fall into a deep relaxing sleep, and you don’t wake up for 10 years. When you awake, you are in your home country and you see that many small and large miracles have occurred, and the world has changed in ways you would most like to see it—for yourself, for children, for grandchildren, for nature, etc. You go out into the world and get a panoramic view. You are happy with what you see. It’s the kind of world you most want to be part of.What has changed in society, education, health, people, nature, technologies, economy, arts, spirit, community? What do you see in your vision of a better world.
  3. Now, more specifically, what do you see in your vision about PharmCo Latin America? How is PharmCo Latin America helping to create the world you envisioned? What’s happening at PharmCo Latin America that is new and different and better? How is your ideal PharmCo Latin America organized, designed, and led for values-driven growth?What special practices – business, management, HR, customer service – are helping to bring out the best in people? What do you see PharmCo Latin America doing to create and maintain its extraordinary relationships with its customers? To continue as the number one division in all of PharmCo?
  4. Finally, if you could develop or transform PharmCo Latin America’s growth strategy in any way, what three wishes, in order of priority, would you make to elevate its overall excellence and vitality?

As a result of the process, PharmCo Latin America strengthened its relationships with customers, consumers, government officials, and other stakeholders and charted a bold new strategy for growth.

PharmCo and many other companies have found that Appreciative Inquiry’s power for setting and executing values-driven strategy lies in the questions it asks. Just like plants grow toward the light, human systems grow in the direction of the questions they ask. Ask negative questions and you’ll receive negative answers. Ask positive, values-focused questions and you’ll receive positive, values-focused answers. By incorporating positive, values-focused questions into your strategy sessions you’ll move in a direction that is aligned with your values and strategic to your overall objectives.


MVM 3D image book stack cropThis excerpt is taken from the e-book, Making Values Meaningful: A Menu of Options for Senior Leaders, which you can download for free at this link. The book is authored by Jim Ludema, Ph.D., the Director of the Center for Values-Driven Leadership; and Amber Johnson, the Center’s Chief Communications Officer.

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