Question

Describe the strategy that Ken Franzier has articulated for moving Merck forward?

LA Merck CEO-Ken Frazier. First African American Leading a Major Pharmaceutical Company A Kenneth Frazier has been the CEO of Merck since January 1, 2011. In an industry dominated by white I men who are either scientists or salesmen, Ken Frazier is an unlikely CEO. He is a lawyer by training and an African American who grew up in Philadelphia's inner city. He comes from a very humble background. His father was a jani- tor with a limited education who Frazier admires and adores. He describes his father as one of the most intelligent men" he has ever met At the time of his appointment, many analysts saw Merck as a company in need of rejuvenation. Merck's mission is to Save and improve lives around the world, and to uphold the highest standards of ethics and integrity All indications were that Merck was having a difficult time fulfilling this mission For a company that has introduced more new medicines in the past 60 years than any other company, Merck ranks only fifth in new drug approvals over the past 10 years. Since 2003 the company's stock has been up and down with no clear direction. Except for the purchase of Schering-Plough in 2009. organic growth has been stagnant. Merck has not launched a drug that has reached annual sales of more than $1 billion since 2007. Drug research is a high-risk and time-consuming process. Only one out of every 5.000-10.000 compounds screened becomes an approved drug It takes an average of 10 to 15 years at an average cost of more than $1 billion to develop a successful medicine. Me Frazier was seen as the candidate best suited to set things right Mr. Frazier's understanding of Merck's business comes from his 35-year career with the company, first as an outside attomey and then as the company's general counsel and top marketer Frazier believes that Merck's competitive advantage is the quality of its research, and he worships its researchers, who can spend 15 or more years developing a single new medicine. "All I can do is create an environment where really talented, smart, committed people want to show up and (discover new drugs)," he once proclaimed. Echoing this Sentiment, one writer said of Me Frazier."He professes a near religious belief in letting his scientists do their jobs*** After a slow start. Me Frazier has begun to make some real changes. A lot of his initiatives are right in line with our recom- mendations for fostering a learning organizational culture (see Exhibit 12-5). For example: Since assuming the leadership of Merck. Frazier has erated his desire to return Merck to a culture of innova tion. In his 2012 annual report he said. We believe that innovative and productive research and development is the only sustainable way to create true and enduring value for all of our stakeholders." He backed his com- mitment by increasing Merck's R&D budget for research The world is changing Mr. Frazier said, but Merck's focus on pursuing the best science and building a sustainable business is steadfast. One of the recommendations for fostering a culture of learning is to create a shared vision for learning • As a learning organization, Merck aims to promote a culture of professional development that will sup- port its employees' growth while aligning their career aspirations with the company's strategic priorities With its new professional development tool called Career Maps, employees have increased exposure to key com- petencies and skills for roles across the company. The competencies within Career Maps are linked to learn ing resources, empowering employees to focus their professional development on building and enhancing skills and helping them develop a plan to achieve their personal career goals. This is part of creating a culture conducive for individual and team learning providing incentives for learning and innovation instituting mecha nisms for channeling and nurturing creative ideas and building confidence in followers' capacity to learn and adapt • Merck recognizes that its employees are an invaluable source of ideas that can help transform it into a stron ger, more innovative company Sa to take advantage of this asset. Merck created an annual event for collabora- tion among thousands of its employees globally Over a three-day period employees engage in an online brainstorming forum to tackle some of Merck's greatest transformational challenges. The round-the-clock format is designed to break down traditional divisional and geographic barriers and engage and inspire participants from all levels of the organization At its latest gather ing in 2012. some 24.000 employees from around the continued

Answer 1

Ken Franzier has articulated that in order for Merck to be moving forward, he needs to invest more in research and development and make Merck technologically advanced and innovative. Another strategy being adopted by Franzier is professional development and empowerment of all the employees so that they are able to develop their skillsets and work towards incresing their productivity levels as well. Franzier also organizes brainstorming sessions among all the employees so that they are able to come up with ideas to tackle challenges faced by the organization and also make it innovative.