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How to succeed in bad times and good

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In 2012, an American pharmaceutical company, the subsidiary of a Japanese firm, was in transition. In terms of immediate pipeline, the cupboard was bare. The company was in crisis, and morale was low. Although the long-term horizon was brighter, that prospect did little to brighten the spirits of employees in the here and now. Enter a new general manager, Nakagawa-san. Great in a crisis, he was the right person for the job. He was an advocate of failing forward; that is, he encouraged his teams to make plans knowing that these plans would probably fail and have to be changed. Which was okay: “Progress is made by forward action.” The environment that he developed fostered a degree of risk-taking. Willing to walk the walk, Nakagawa acted quickly when he saw that something was not right, whether a matter of compliance or how someone was being treated. No problem was too small for him.

The company’s employees responded. After all, what had they to lose? In a crisis, there is a willingness to make changes, and a bond is formed of the kind formed between survivors of an accident. A feeling of good humor and camaraderie. We will get through this. We have each other’s backs. Nakagawa understood all this.

As 2023 began, the company had achieved a 180-degree turnaround. The pandemic was waning. The pipeline had come to fruition. For the first time, instead of partnering with others to market its products, the company was in complete control.

One might have assumed that all of Nakagawa’s problems were over, that he was now home free. The firm had an enviable pipeline and no longer had any trouble hiring great performers.

But there were new problems. How to handle growth. How to prevent complacency. How to ensure that the company could hold its own and not be subservient to the headquarters in Japan. For he was learning that in Japan, although a struggling subsidiary is an orphan, success has many fathers.

Unfortunately for Nakagawa, he was unable to make the transition. Great in a crisis, but he was not so great at leading a thriving firm.

With Nakagawa-san given a warm farewell, a successor we’ll call Takahashi-san was brought in as general manager. She set targets, inculcated new ideas, and promoted the best and brightest of the firm to positions in which they were responsible for sometimes unfamiliar functions. When hiring, she looked for candidates with character, energy, and passion. And she let underperformers go. Her number one priority was getting the medicines of the company to the right patients. Takahashi was motivated by the goal of serving the patients of Japan; and, when necessary, she resisted the demands of headquarters. While making new investments in digital products, she watched the bottom line carefully, cut costs wherever she could, and continually improved the operation. Always asking what we don’t know, she never assumed anything.

As when the cupboard is bare when a company’s pipeline is bursting is also a time for transformation. It has been said that one should never let a crisis go to waste. Takahashi believed that one should never let the good times blind you to the changes that need to be made and never let prosperity go to waste.

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