Managing for tomorrow Featured

8:00pm EDT May 26, 2008

Matt Emmens wrote the book on keeping a business culture fresh and relevant.

No, really, he did.

Published in January, Emmens co-wrote a book with author Beth Kephart called “Zenobia: The Curious Book of Business.” It’s a fable that illustrates what can happen if weeds are allowed to grow under a business’s culture.

“It starts with a quote from an Italian author about a city that is built on stilts,” says the chairman and CEO of Shire plc. “At one time, there was water there, but now it’s on stilts in the desert. That is kind of poignant about a culture and structure that is no longer relevant. That’s what the whole book is about. You have people doing things the way they have always done it and the world passed them by.”

Emmens calls business culture one of his hot-button issues. Many times over the course of his career, he has seen businesses fall by the wayside because the people within the company, management and employees alike, failed to adapt the culture to keep up with the times.

It’s the biggest reason why Emmens places a high priority on having an adaptable culture and adaptable people at Shire, a global specialty biopharmaceutical company that had $1.8 billion in 2006 revenue.

“That’s my biggest fear in business, that you’re going to set up a wonderful culture but it’s no longer relevant,” he says. “Then your performance falls off over the years, and sooner or later, your company is in trouble, and it’s largely due to lack of awareness and stifled creativity.”

Emmens says finding capable employees and developing a culture that gives them the latitude to create and innovate is the only way you can expect your business to flourish over the long haul. This is how he has accomplished that at Shire.

Keep your culture flexible

As a company built almost entirely on acquisitions, Shire’s culture has more potential outside influences than a lot of companies, so Emmens and his management team have a full-time job in deciding how they want to merge cultures with each acquired company.

When introducing new aspects to your culture, Emmens says it’s imperative to take a best-practices approach. It can be counterproductive to simply throw the new company into a prestamped mold. You could overlook a new perspective or a new procedure that could lead to more efficiency.

As your company grows and develops more levels, it takes more and more work to ensure that you can incorporate new elements into your culture. Often, growing companies value a stable organization above new ideas, and that can lead to culture stagnation.

Emmens says stability is good but not if it leads to stagnation. He tries to combat that at Shire by keeping many acquired companies under one business umbrella with regard to finances and communication but giving each a high degree of autonomy when it comes to operations. With that set-up, Shire’s management is exposed to best practices that can be implemented across the organization while still allowing each business unit to operate in the way that made it an attractive acquisition candidate in the first place.

“There is really no Shire way,” he says. “Culture is a constantly evolving thing. One of our recent acquisitions had a culture that was totally different from Shire, and we left it in place. That flexibility gives us a competitive advantage. We have the ability to develop specialized cultures, and I think businesses need to do that more often.”

Don’t fall into the comfort zone of valuing the status quo above all else. Emmens says the value of your organization lies not in steadiness of your culture but in your employees’ ability to create. He says your culture should never get in the way of innovation and creativity.

“As your organization grows, you have a tendency to develop these kinds of secret cultures where you have a slogan on the wall, but everybody has a different idea of what it means,” Emmens says. “That can be destructive.

“Size and creativity are often at odds with each other. When you are a large organization, it often gives you comfort to know how organized you are. But all value is ultimately created by the people in your company, by their creative acts, and I think creativity is squelched in organizations that have a lot of levels and rules.

“You’re always trying to have a balancing act of the best of both worlds, and one way to do that is through network of smaller business units that are allowed to function as a more nimble, creative unit.”

Make culture personal

It’s easy to say you have an entrepreneurial spirit in your company. It’s much harder to actually live it.

At Shire, Emmens keeps his company’s entrepreneurial spirit alive by introducing actual entrepreneurs into his company, then driving his creativity-first culture down to the level of each individual.

When Shire makes an acquisition, a major factor in whether Emmens’ leadership lets the acquired company operate with high level of autonomy is whether there is a strong entrepreneurial presence within the leaders of the acquired unit.

The stronger and more relevant the ideas and products that are coming from a business unit, the more freedom Emmens gives its leaders.

Emmens says it’s all about one word: passion. “We like to have those people stay on and have their passion continue to influence the business,” he says. “We basically license the drugs but keep that company separate and doing its thing because you don’t want to lose the knowledge and creativity those people have.

“Then, later, when they need help in terms of capital and resources, we can provide that. But having the flexibility to keep the passion of the entrepreneurs that started each of these companies is important to us.”

By keeping your company’s creative impetus close to the ground level, you can keep your company closer to your customers. Reading the pulse of the market will allow you to better meet your customers’ needs. Emmens says any business needs to give the people closest to your customers freedom to operate and meet their needs. Only when your customers’ needs aren’t being met should you intervene.

“Going back to the example of my book, it’s about not being in touch and not responding to external environmental changes,” he says.

“It’s like the idea that you built the cheapest and best buggy whip when there are no more horse buggies. It’s the idea that you have to stay close to the customer and really understand the challenges of the industry and what you have to overcome in order to be successful. Many businesses are at risk for thinking that they are the reason for the market existing. They’re not. Businesses have to follow the needs of the marketplace. You can’t become totally commoditized and falling asleep at the wheel.”

Emmens says taking a personalized approach to creativity and culture has been an uncommon concept throughout much of the history of business. If you’re not used to putting the future of your company in the hands of people other than yourself and your direct reports, it can take you out of your comfort zone. But the long-term survival of your business could depend on it.

“If you look at the history of companies that have failed, there is an element of that (lack of an entrepreneurial spirit) in a lot of them. They stifled creativity and refused to take risks, and as a result, they killed off the entrepreneurial spirit in their people.”

Build the right kind of team

Emmens says employees will respond positively when management places them in a culture where they are allowed to be flexible and creative. But that’s only part of the equation. You also need to hire people who are comfortable taking risks and working with less structure.

It starts with knowing exactly what you want in an employee. Emmens and his leadership team often discuss the traits they don’t want in a person as much as the desirable traits.

“You want to find someone who is willing to be comfortable in a rapidly changing environment,” he says. “You have to have the mentality that your company isn’t just a place to have a 9-to-5 job.”

You can start to get a feel for a person’s willingness to adapt and openness to change by looking at his or her resume and noting the number of different responsibilities that person has assumed previously.

“It’s especially important as you become a smaller company growing into a larger company,” Emmens says. “Working in a smaller company is a very different undertaking than a larger company. You need more of a jack-of-all-trades, someone willing to roll up their sleeves and get their hands dirty, going back and doing the things you used to do, things that you might have had subordinates doing in a larger organization. Sometimes, that can come as a shock for someone going from a bigger to a smaller company.”

You can look at a resume and ask questions, but there is a limit to what one interviewer is going to be able to learn about a job candidate. That’s why Emmens has no fewer than three managers interview each candidate separately.

During the span of three separate interviews, you will be able to paint a much more accurate picture of a job candidate. Following the series of interviews, the interviewers confer and compare notes.

“We often choose those three people to solicit different views from each of the interviews, to contrast those viewpoints to get a full story,” Emmens says. “It’s one of the most careful things we do, finding the right people to come into the company.

“You want job candidates to be able to have real, measurable things they can show you that would prove they’re a good fit for your company. But to me, the most important thing is what they want to do, what is important to them. There are a lot of very smart people in the world, but if what they want to do is not consistent with what needs to be done, you’ve got a real problem.”

When interviewing a job candidate and getting a read on the individual, it’s as important that you give him or her an accurate depiction of the company and the job.

Emmens says you can’t sugarcoat the situation the candidate will encounter should you hire him or her. Even if the candidate is highly creative, highly talented and seems like a perfect match for your culture, if the circumstances surrounding the job are too much to handle, the hire will be a failure.

“That’s probably the first thing you have to do, explain what the company is and what the issues are,” he says. “You don’t just tell them how wonderful everything is. You tell them perhaps ways to fail in the role. You’re not just trying to attract them, you want to tell them the truth the best you can so there are no surprises.

“It’s a matter of portraying the company as accurately as possible, then contrasting that against what a person can do. You really want a person to see and be able to meet the challenges they are going to face.”

HOW TO REACH: Shire plc, www.shire.com