From scratch.

In a world where ingrained cultures and old habits present the greatest barriers to organizational change, Wayne P. Yetter has had "a unique, once-in-a-lifetime opportunity - the chance to build a new company from scratch." Yetter is president and CEO of the Astra Merck pharmaceutical company, headquartered in Wayne, PA. After starting life as a strategic alliance between Merck & Co. and Sweden's Astra AB, Astra Merck became a stand-alone corporation in November 1994; it has since built sales to over $1 billion.

As executives put the new organization together, "we saw that the best way to be efficient and have a strong customer focus was to align the company around very specific core processes," says Yetter. Astra Merck now is managed as six horizontal processes, and "there are only four layers between me and the front-line representative in the field. We've found that our process focus facilitates speed and innovation, because members of the process teams really develop a sense of empowerment and feel that it's their job to deliver value to their particular set of customers." Here, Yetter offers some insight into the advantages and challenges of building a process-oriented company.

On leading a process-driven organization: We all recognize that we have to lead and manage in a different way, with much less of a control mentality. I've had to learn a lot about what management style I need to be effective in this organization - and a lot of that has come from the people I work with.

We've defined an extensive set of leadership behaviors that reinforce the culture we want. Based on that, we conduct leadership surveys, in which senior managers look at each others' leadership styles. And I've been surprised by some of the feedback. For example, I consider myself very results-oriented. But a number of my people rated me somewhat low on results orientation. As I explored that, I realized that what was being sought was my intervention in terms of supporting conflict resolution a little more strongly - that in situations where two or three good ideas were competing, and people were having difficulty deciding between them, I may have been allowing the process to continue too long. I was being told to step in sooner.

On learning in the process-oriented company: I've been very impressed with the knowledge individuals gain when they are part of a team responsible for a total process. The amount of cross-functional learning that takes place is enormous. For example, our marketing people have gained a greater appreciation of the drug-development process, of regulatory issues, and of the financial perspective. So people with one area of expertise are learning a lot about all the other disciplines on the team. This gives them a more global view of the business; they aren't just seeing what goes on in their function. I think this ultimately leads to better quality decisions.

On the need to communicate: Leading a process organization has required me to be a communicator to a much, much greater extent than I ever was before. When we have, say, a large meeting with 1,000 people present, there is no podium, there are no scripts; everything is people talking to people, sharing ideas, feeling very comfortable. We avoid formal presentations, so that we get a sense of connection and openness. You have to connect with people at a much more emotional level - instead of just the left brain, logic side, the numbers and plans - you have to get the whole brain involved, and tap into people's energies.

On process management and competitive advantage: Process management is absolutely the most important thing we've done here at Astra Merck - I would say it has been vital in differentiating us from the competition. With process management, you get an external focus. All the necessary resources and people and talents are organized in the end-to end process to deliver value to the customer - as opposed to the strictly functional organization, where it is sometimes difficult to get cooperation and communication across functional areas. You're continuously watching those customers and improving your processes - not just to be reacting to what's happening today, but to be at the point where your customers are going to be out in the future. It helps you place your bets today so you are there to meet your customers when they arrive.

On the difficulties of running a process-driven company: If you look at a diagram of Astra Merck, you'll see six core processes, with various supporting skill centers driving down through each of those horizontal processes. It looks simple, but in reality there are many, many teams underneath that, and there are complex interactions between teams. It's a very fluid organization, which is a positive. But this also creates a challenge in terms of our people understanding how the organization works.

In the early phases of setting this up, we quite frankly had to go through some periods of inefficiency and duplication of effort, as people struggled to figure out the responsibilities and roles of various teams, and how each process related to the others. Decision making often took longer than we expected. I found that it required a great deal of patience at times to have faith in the teams and trust that the right things would be done. But you have to allow the teams the time they need to sort it all out and make it work.

On what CEOs should expect as they move to process management: Be prepared to be uncomfortable with the whole effort. You have to find a way to keep the organization on the edge a little bit - keep it from falling back, getting comfortable, and being resistant to change. The real energy and innovation occur when there is a little bit of adrenaline pumping and the receptors are really open. Remember that good things will happen when the CEO and the organization are a little bit out of their comfort zone.