Genentech Case Study - HBR | Dineshkumar M H

Berkley-Hass Case Series

What are the critical Challenges that Jennifer Cook faces as the new
head of GIO?
-Jennifer Chatman

Case presented by
Dineshkumar M H
D10429970
Course: Applied Strategic Management
Instructor: Dr. C.P. Ganatra

Genentech Case Study - HBR | Dineshkumar M H

Everybody has accepted by now that change is unavoidable. But that still implies that change is
like death and taxes it should be postponed as long as possible and no change would be vastly
preferable. But in a period of upheaval, such as the one we are living in, change is the norm.
Peter Drucker, in Management Challenges for the 21st Century (1999)

The case presented to us speaks of one of the biggest mergers in the bio-tech pharma industry.
Genentech Corporation which was acquired by Roche in 2009 and was converted into an
independent Research and Early Development center. Despite the fears of the Swiss giant that
was more focused on pharmaceutical sales and diagnostics, stifling the innovative and free
thinking culture of the Californian based bio-tech firm, Genentech was able to withhold its status
a science and data driven unit even after being acquired. The Roche-Genentech merger was a
diversified case in the sense that Roche had a history of more than 125 years whereas Genentech
was only over 35 years old at the time of acquisition, it was Genentech who went global with the
merger and the workers feared a reverse takeover situation from Genentech. "The companies'
structures were very different, indeed on merging focus is on what you count in terms of sales
and profit, level of engagement and work culture gets overlooked often. R&D in bio-pharma
mergers seldom succeeded, on the surface, nothing would suggest that they would ever come
together."
Typically mergers of these magnitude and size fail due to cultural differences in the work place
among employees and difference in ideologies. Also, the biopharma industry was such that
Genentech and Roche were rivals in the market up until the merger proposal and it would have
been an unwelcoming change for the rivals to be working together.

Genentech Case Study - HBR | Dineshkumar M H

Roches four top selling medicines were all cooked up in Genentechs lab which leaves a feeling
of superiority to hover above the Genentech staff. However companies with strong focus and
relentless communication that exploits internal strengths continually do well and adopt a winning
attitude with the partner. Generally it would take two or three years for the synergy to be noticed
as failure is far more than common in corporate cultural integration.
Coming to discuss the magnitude of cultural differences between these two companies, Roche
had a more formal and hierarchical approach whereas engineers and bio-chemists in Genentech
would wear informal clothes and flip flops at work. In Genentech it wasnt about what you
looked like but what you are. Having thrown light on some of the apparent differences in work
culture among the employees, this case is about Jennifer Cook who envisions to bring down
disparity among franchises and to unify them by bringing about a cultural change to be
successful over the long run through Organizational Cultural Profile (OCP) assessment.
After the merger the then head of Genentech Immunology & Ophthalmology was in-charge of
four products/franchises with inherently independent team cultures and histories and were also at
varying stages of development. Following the merger, Roche shifted its base from NJ to one of
the Genentechs office in California, also Roche shut down its operating plant and assumed
operation in full capacity at one of Genentechs site. Cook started to realize that Roche
employees felt discontent towards the restructuring effort by Roche which came out more as an
upper hand to Genentech workforce since most of the lay-off post the merger happened with
Roche than Genentech. So it would seem to let them operate as independent entities would seem
prudent but it might increase the fissure and break the Genentech-Roche merger altogether which
had brought about major restructuring as such in terms of work force and product line
disruptions.
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Genentech Case Study - HBR | Dineshkumar M H

As a senior executive or manager one could changes policies in a firm with a stroke of a pen but
changing the entrenched culture requires to win the hearts of the employees through cunningness
and persuasion.
Even though the manufacturing and commercial operations of the two companies were combined
on large the research approach of Genentech was adopted across the merged divisions. Hence, it
was imperative on Cook to embark on a culture change drive to identify and establish a unified
work culture and help the organization realize its vision. In addition to the fact that Cook might
have to bring together people from various divisions, the workforce for these divisions were
spread out in the country in various locations.
Jennifer Cook was very successful in her position as a SVP mostly because she saw the
Genentech staff as people first and employees second. She advocated that people created value to
the company in addition to research and everything else. Cook fully recognized that her firm was
engaged in treating chronic diseases and wanted to deliver the best to treat their patients. Since
her inception into Genentech in 1998 as a fresh MBA grad, Cook was successful in
implementing her pedantic culture profile assessments, with a goal of bringing the team together
and giving a sense shared purpose to a team of 15 personal. Cook met with her first strategic
victory following a post-survey conducted on this group two years later to show the extent of
cohesion instilled in this group.
According to Blue Ocean Strategy, changing an organizational structure or implementing new
cultural changes is met with 4 hurdles viz. cognitive, limited resources, motivation and
institutional politics. The task upon Jennifer Cooks hand would be to first look into the
fundamental mission and vison statements of Roche and Genentech to which their respective

Genentech Case Study - HBR | Dineshkumar M H

employees abide by. Implementing change would require shifting of resources, motivating
people to desire the change and help understand why change is necessary.
Roches culture was primarily based on integrity, courage and passion towards business
development, providing healthcare and improving sales; whereas Genentechs focus was on
science, patients and people. Genentech as mentioned before was a research driven organization.
Hence, before implementing any culture change programs Cook has to find a common ground to
bring together the business divisions both within Genentech and between Roche and Genentech.
Lastly, before even Cook can decide to implement anything she should be able to overcome the
cynicism and fear or giving up ownership from the team towards cultural changes.
Cook took up to this by drafting out a vision statement with the combined inputs from all
divisions to understand the outlook of the teams towards each other. Cook noticed that they were
still disconnected but willing to accept change, they wanted a greater sense of community and be
a part of a greater network. Cooks challenge would still lie in trying to make sense of Roches
employee work culture and to connect with them personally to understand what integration
methods would suit better. In addition to a disparate sense of involvement, the workforce was not
just the people in the same floor or even just in the same city, Cooks new plan should focus on
being spread out to various centers of Roche and Genentech collectively.
Jenn quickly realized to bring together the workforce it was imperative to bring together the
leaders from all the divisions. She did a similar task of asking the senior execs their motives and
goals post the merger and unsurprisingly she received the same response of unified structure and
being a part of the bigger network and to reduce variety and ambiguity even though personal
interaction between the employees is very rare.

Genentech Case Study - HBR | Dineshkumar M H

In circumspect, to understand the teams at a much personal level it was necessary for Cook to
engage a 3rd party consulting firm to interview representatives given the sheer number of
employees added after the merger and being distributed over various locations and to group the
data. The interviews or surveys were focused on evaluating the perception of the current
prevailing work culture and the weighted parameters for the desired work culture. As the
employees already know what they want and what they perceive as a good work culture, Cook
had to focus on improving the communication of these ideals. While tackling something purely
emotional, non-materialistic and intangible elements like culture change and desired
communication between employees, Cook took an unconventional approach of framing her
strategies based on numbers and data. The interviews and surveys helped Cook to quickly
identify the 4 pillars of the new GIO strategy everyone wanted. Cook wanted to reshape the
strategy to give an opportunity for the employees to work on something they care about, instead
of seeming to demand intensity even though they were a sales driven business. She wanted to
shift the focus on treating more number of patients effectively rather than just treating more
number of patients.
To implement strategic change, one has to understand it is impossible to bring change to the
entire organization altogether. So Cook held a separate survey and workshop for the Sales team
to understand their principles and acceptance to change before organizing a GIO wide workshop.
Second, to implement change, it takes more than just lecturing, it is necessary to experience
reality. The GIO wide workshop brought together 550+ employees and Cook made each of them
weigh in their own objectives and parameters for the new vision, after brainstorming across
various levels and help with the 3rd party consulting, Cook was able to devise a new vision
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Genentech Case Study - HBR | Dineshkumar M H

statement and set of cross functional goals and objectives across the platform for the employees
at the GIO division.
However during this process Cook could have potentially upset some work force as it wouldnt
be feasible to include all the inputs from 500+ employees and had to be convincing with the
chosen objectives. In addition to it cook had one too many dimensions to be classified under 4
cultural pillars due to which the objectives might lose their translation when being organized.
After framing out the vision and objectives, Cook formed different divisions to be in-charge of
realizing these new dimensions are met in the new enforced work culture.
Some of the positive aspects by Cook to drive change was to start at the inception or train new
hires in the new GIO work culture and to pair them with veteran employees to assimilate quicker.
She also enforced effective means of communication through cross-franchise initiatives in order
to bring the divisions together and get a sense of whats going around in the organization. To
simulate creativity it was mandatory to understand and evaluate the company personnel structure
and to mix talents and employees with different levels of experience. Above all Cook involved
the employees to get together for just one more time to create a new identity or logo for their
merged organization.
Despite these efforts Jennifer Cook fails to realize in a science and research driven organization,
not always interpersonal communication is preferred, some teams produce better results to
independent functioning and Cooks new perspective doesnt provide room for such
convenience, also the cross functional initiative may not always pan out successfully when there
is no synergy and that might bring some disruptions. From here on Cook should slowly and
rationally incorporate the factors that drive sales and pace of turning out new/improved
medicines once the chief executives and the different teams have successfully adapted into their
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Genentech Case Study - HBR | Dineshkumar M H

chosen work culture to ensure the survival of the organization, to generate revenues and not just
improve performance.

If one were to adopt a different strategy given the organizational structure that was prevalent in
these two divisions, it would only seem logical to maintain the identification that separates the
entities, as much as a unified thinking is required for the success, one should not merge the talent
pool, skill sets and in this case R&D with sales, business and logistics, Cook should have taken a
two prong approach, first to unify the teams within themselves, to create a common motivation
to improve as divisions in-charge of independent research as one cannot merge resources
required for one pharmaceutical unit with the other, then Cook should devise a structure to
integrate the teams superficially to compete in performance, to share resources and knowledge if
required or necessary instead of mandating it. In her strategy Cook failed to understand that an
organization should be divided in terms of its products, development and functions but unified in
objectives and long term goals rather than trying to bring together the organization towards a
common everything.
One shouldnt forget that Jennifer Cooks success to recreating or instilling the unified work
culture was only possible because Roche was able to recognize the decentralized structure at
Genentech and the R&D potential with the same and understood Genentech was more than just
sales and logistics like in Roche.