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Law and Finance
Case Study: Glaxo Smith Kline
Corporate planning at Glaxo had traditionally followed the lines of a financially-driven exercise, involving the processing of five year plans from local operating companies based on centrally-issued global assumptions. This was supplemented by central ten-year sales forecasts based on longer-term assumptions regarding the product pipeline. Following the acquisition of Wellcome in 1995, a new approach to looking at longer term issues which could impact on the new company, Glaxo Wellcome, was developed by the Group Strategy team.
The go-ahead for a scenario exercise in 1996 was given by the company's Executive Committee, thus securing top-level endorsement. A steering group to manage the project was established, led by the Group Strategy team and including external specialist scenario facilitators to provide the essential process expertise. A range of interviews was conducted with key executives from across the business and various pieces of preparatory material were circulated. The process culminated in two linked off-site workshops, composed of senior executives representing the major business functions and global regions, together with some external opinion leaders. The first workshop was very successful, particularly so as there had been no previous history of scenario development at Glaxo and there was some scepticism among participants at the start. Following a structured but flexible methodology, the two-day workshop developed four scenarios for the global healthcare environment. These were subsequently writ ten up and circulated.
A second two-day workshop was held a couple of months later. This focused on two aspects: first, to confirm and extend the scenarios; and secondly, to map the strategic options for the business arising from the alternative scenarios. This latter process was very stimulating as it provided a means of identifying common strategic directions from the scenarios, as well as analysing the drivers and external signals which could come into play to steer towards any individual scenarios.
As a result of the exposure of senior executives to the process of strategic scenario thinking, added impetus was given to the need for the company to invest in new technologies and emerging global regions. In addition, all participants agreed that they viewed, analysed and interpreted external signals in the global environment in a very different and more purposeful way.
The exercise stimulated a range of further scenario planning activities in subsequent years, in research and development; manufacturing and supply; and major operating regions. The project to assess Glaxo's potential business in predictive and preventive has been documented in "Scenarios in Business", Gill Ringland, ISBN 0-470-84382-9.
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