"The April 2000 merger brought together a complex myriad of sites and just as many different ways of doing business and tracking performance goals," says Mert Livingstone, executive director of Global Real Estate and Facilities Management (GRE/FM) for Pharmacia. "We realized that each site needed to shift from site-based thinking and focus instead on achieving corporate-wide process improvements and synergies."

To do this, Pharmacia launched an organization-wide Continuous Improvement Initiative in April of 2001 with the goal of achieving "balanced excellence" through all sites and functions by encouraging sites to benchmark against each other for best practices. According to Livingstone, one of the key elements of the initiative is a Web-based balanced scorecard that links various functions across sites so they can effectively communicate with each other. These scorecards also enable the identification of best practices and process improvement opportunities quickly and efficiently, ultimately leading to the timely execution of such opportunities.

Setting Corporate-Wide Goals

Prior to the initiative's launch, Livingstone hired Brett Dibkey as Pharmacia's director of performance management to oversee the effort for GRE/FM. With an operating budget of approximately $250 million, GRE/FM is responsible for 37 million sf of space in 630 locations throughout 77 countries.

"GRE/FM's overall strategy focuses on five key perspectives: customer satisfaction, financial results, product and service quality, internal process improvement, and employee learning and growth," says Dibkey who explains that these five perspectives also served as a catalyst for the goals of the Continuous Improvement Initiative:

• Enable the efficient identification and prioritization of process improvement opportunities.
• Ensure enterprise-wide strategic alignment and provide employees with a "clear line of sight" to strategic execution.
• Enable cross-site, cross-function collaboration and the sharing of best practices.
• Yield a state of "balanced excellence" across all major sites and functions.

"The goal of the overall initiative is to link our sites together so that they can each benefit from the knowledge and expertise at other locations, whether the site is in Kalamazoo, Michigan, or in Italy or Sweden," says Dibkey. "We want to virtually tear down any existing site-based silos so that people from one site can easily collaborate and share best practices with their counterparts in other sites."

The five key perspectives are also the basis for nine strategic imperatives developed by GRE/FM (see box). Each of these strategic imperatives contains pertinent high-level metrics that serve as a means of measuring performance in a "balanced" context.

Measuring Performance with Scorecards

To measure results of the overall initiative, each of the 15 different functional disciplines throughout the organization uses Web-based balanced scorecards to track specific performance metrics, identify process improvement opportunities, and to share best practices through online chats and the posting of documents.

The scorecards serve Pharmacia's Site Networks and Global Functions groups. The Global Functions group provides global services across the corporation, including aviation and travel services, document and records management, global real estate and strategic facilities planning, and meeting management and video conferencing. The overall objectives of the group are to optimize services across the global enterprise and use global leverage and common processes to ensure high quality, cost-effective, flexible, and timely services.

The Site Networks are comprised of various functions at each of the major sites, including U.S. sites in Chicago, Kalamazoo, St. Louis, Peapack, N.J., and international sites in Italy and Sweden. The Networks include engineering/construction, operations/maintenance, environmental health and safety, materials management, research services, security, site business services, and space management. Similar to the Global Functions group, the objectives of the Site Networks focus on facilitating common business practices and encouraging cross-site collaboration and knowledge sharing.

The operating model is used by Pharmacia to illustrate that its sites are linked together through the networks. The balanced scorecard is a way for each of those sites to find at-a-glance information relative to performance and to easily benchmark performance between all sites. 

Dibkey explains that the primary focus behind the methodology of the balanced scorecard is to shift employee focus to what Pharmacia calls its "leading indicators," including condensing cycle time, improving on-time delivery rates, and encouraging development of the employee’s own personal skills and educational growth.

"Ultimately, when we have been able to document positive changes in the leading indicators categories, we also see a positive effect on our organization's overall financial results. Further, improvements to our leading indicators also have a positive impact on non-financial business results, such as enhanced quality of products and services and higher customer satisfaction levels," he says.

Getting the Scorecard Up and Running

Pharmacia uses an off-the-shelf scorecard application that extracts transactional data from various source systems and deploys performance information directly from the Web. The data is extracted from systems such as SAP, PeopleSoft, and multiple computer aided facility management systems at various sites. The software then aggregates the data into one central data repository, which eliminates the need to manually compile and enter data on a monthly basis.

"As with any data collection program, we are always monitoring data integrity and reliability issues," says Dibkey.

The balanced scorecards were designed so that each Network can easily identify trends based on the most recent reporting period. Using a traffic light metaphor of red, yellow, and green arrows, the scorecard shows whether a specific metric is trending positively or negatively and how the result compares to target values.

"The scorecards have also helped us to align our strategies from upper management all the way down through to the shop floor and ultimately drive best practices across the entire enterprise," he says.

Building a Symmetrical, Sustainable System

One of Pharmacia's primary objectives of the initiative is to ensure the sustainability of the system. Dibkey explains that selecting the right technology and the right vendors to implement the chosen technology is a critical part of system sustainability. He adds that putting the right technology in place allows employees to shift their focus from data collection to data analysis.

"In addition to sustainability, the scorecard is also intended to be symmetrical," says Dibkey. "It was built to benefit both strategic long-term decision making, as well as decisions being made on a day-to-day level."

For long-term decisions, the scorecard provides data that helps identify trends, measure performance against target values, configure alerts and variance reporting, and identify correlations between various metrics. On a day-to-day level, the system can be configured to send automatic emails to process owners when a metric dips below an accepted level. Users can also attach documents such as process maps or standard operating procedures.

Lessons Learned

"We've learned that driving Continuous Improvement and performance measurement initiatives across an entire corporation is not an easy process," says Dibkey.

He explains that since these types of initiatives are very demanding, there is bound to be resistance throughout the company. For this reason, Dibkey feels that executive-level support for the initiative is critical and that positive programs, such as the balanced scorecard, be put in place to manage the resistance.

"The balanced scorecard has given us a tool that clearly illustrates how day-to-day activities are linked to overall strategic objectives, and a way to gain empirical data that actually validates the company's commitment to the overall Continuous Improvement Initiative, he says.

However, Dibkey emphasizes that a scorecard should always be used for communication, not for employee command and control. In addition, he points out that a long-term view of continuous improvement initiatives is essential since "quick hits" are not always feasible.

"Taking a long-term view also helps you to identify future improvement initiatives," he says.

By Amy Cammell

Note: This article was initiated prior to the announced acquisition of Pharmacia by Pfizer. As such, the views, approaches, and methodologies discussed in this article are that of legacy Pharmacia and do not pertain to Pfizer.

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ISSN: 1096-4894