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The case series describes strategic transformation at Takeda, the largest Japanese pharmaceutical company, with a special focus on the R&D function. Since 2015, the 237-year-old industry doyen has narrowed its strategic focus from six to three therapeutic areas, reorganised its global R&D footprint around one Japanese and two US sites, and engaged in over 180 new partnerships across multiple modalities of drug discovery around the world. The pipeline of new drugs, a key gauge of future growth, has shifted from 7% partner-based pre-transformation to approximately 45% partner-based today, and an entrepreneurial, geocentric way of working has taken hold. At Takeda, a generation’s worth of strategic transformation has been compressed into three years. From the outset of the transformation process, outgoing Chairman Yasu Hasegawa and incoming CEO Christophe Weber made it a point to sound out major shareholders and engage candidly with the union, working with different stakeholders to find novel organisational solutions. Once plans crystallised in 2016, Hasegawa and Weber moved to reconstitute the board of directors, changing its composition and renegotiating its modus operandi to further strategic dialogue. During the course of the same year, the executive team was recast around people – internal and external – who had the skills and the mindset to take the company forward on its new path. Early in 2017, executives finally initiated a review and adjustment of existing structures in R&D, particularly as they pertained to the burgeoning partnership portfolio. In other words, Takeda stands out not only as a rare example of a large company reinventing itself, but also as a case that illustrates the importance of proactively addressing the governance of transformation.
1. Understand the constellation of events and interests that enable a large, healthy, listed company to initiate strategic transformation.
2. Highlight the critical importance of considering strategic transformation and governance change not separately, but in parallel, explaining the roles of various stakeholders.
3. Illustrate how shareholders, board of directors and executive management work together in strategic transformation, with a special focus on the freedom of executive management.
4. Emphasise the need for executive management to proactively create new governance mechanisms as management challenges evolve.
|Publication Date:||October 2020|
|LBS Case Code:||CS-18-025_JPN|
|Subjects:||Corporate governance, Organisational development, Research and development, Strategic transformation|