# Structured Autonomy with Paul Souren https://commercialexcellenceconsortium.com/podcast/structured-autonomy-with-paul-souren Sixteen years at Roche, and the "playground" model for owning the how. Topics: structured autonomy, change vs. transformation, guardrails, empowerment and accountability, passive resistance, agile transformation, back-casting, feedback culture, coaching ## Summary Paul Souren spent sixteen years at Roche, in Dutch affiliate roles and global ones. He was portfolio strategy director when a patent cliff arrived on products that had built the company, and revenue on a drug in a market like the Netherlands can evaporate within months of it. What followed was entry into neuroscience, hemophilia and immunotherapy as the new arrival rather than the incumbent. He draws a hard line between change and transformation: change is continuing to improve what you already do and taking the same way of working into a new market; transformation is redesigning how people think and behave. A metamorphosis rather than an improvement. The mechanism he describes is a playground with a stated perimeter, three non-negotiables you may not cross, and everything inside left to the team, including the freedom to fall off the swing. Around it: outcomes instead of numbers, back-casting instead of forecasting, four modes a leader switches between, and a deliberately built feedback culture in a company that had been very good at being nice to each other. ## Key points - Sixteen years at Roche, arriving at transformation work through marketing, sales and portfolio strategy rather than by design. - The patent cliff: revenue on the products that built the company evaporating within months in markets like the Netherlands. - Entering neuroscience, hemophilia and immunotherapy as the new arrival, not first to market and not first in class, after being the big player in oncology. - The line between change and transformation, drawn precisely: improvement and portability on one side, metamorphosis on the other. - Why the leader is the force multiplier, and what people conclude when leadership will not move first. - The playground: a stated perimeter, an entrance and an exit, everything inside left to the team, and permission to fall off the swing. - Three non-negotiables at Roche, and how much room the absence of a fourth created. - Empowerment and accountability as one thing, and why people hand back authority whose edges they are unable to see. - VACC: visionary, architect, catalyst, coach, and switching between them rather than leading one way everywhere. - Building a feedback culture inside an organization that was very good at being nice to each other. - Feedback against coaching: one is specific to a moment, the other assumes the answer sits inside the person. - Abandoning the annual planning cycle, and measuring outcomes rather than numbers. - Back-casting instead of forecasting: five years, then three, then the one to two years that decide it. - The two forms passive resistance takes, and why self-preservation sits under the first one. - Fifteen to twenty percent as the critical mass that starts the snowball, and the accountability half few leaders enjoy stating. - How the agile shift was made: leadership alignment, no safe corner to pilot in, and celebrating the failures. - Taking one hundred and eighty people out to other companies to watch how somebody else does it. ## Definitions - **Change vs. transformation** — Paul's distinction. Change is continuing to improve what you already do, and applying the way of working that made you successful to a new area. Transformation is reinventing and redesigning how you work, including behaviors and mindsets, so how people show up is different afterwards. Jesse's image for it is the caterpillar becoming the butterfly, and Paul's word is metamorphosis. - **The playground** — Paul's model for structured autonomy. Leaders provide the guardrails and define a virtual playground: this is its size, here is the entrance, there is the exit, and you can use whatever is inside it. The order in which people use it is theirs. His closing clause is the part most models leave out: it is okay to fall off the swing. - **Structured autonomy** — The what and the why come from leadership as guardrails; the how belongs to the people doing the work. Paul's argument is that the boundary is what makes the freedom usable, because it gives people a line of sight on where the empowerment is ring-fenced, and the fence is there for safety rather than containment. - **Patent cliff** — The point at which exclusivity ends on the products a pharmaceutical company's revenue depends on. In markets like the Netherlands, Paul describes revenue on those products evaporating within months as generics arrive. It is a known date rather than a surprise, and it converts an improvement problem into a reinvention problem. - **The three non-negotiables** — The guardrails a Roche leader stated: do not compromise patient safety, do not break the law of the land you work in, and do not compromise the Roche brand. Inside those, you can make a lot of mistakes. Naming three and stopping is what made the space inside them real. - **Empowerment and accountability** — Two halves of the same act. Paul's position is that empowerment lands only when people can see where it is ring-fenced, and that the other half has to be stated as clearly: an expectation that people take accountability for what they do with it. Announcing the first without the second is why people leave the authority on the table. - **VACC** — Visionary, architect, catalyst, coach. Four modes a leader moves between rather than one style applied everywhere: painting the direction, working out how to get there, bringing energy and keeping people focused, and drawing the answer out of someone. Paul credits the framing to outside work rather than to Roche, and the value to having made it usable in practice. - **Five Frequencies** — The book Roche's leaders worked from on how a leader shows up: what you tolerate and refuse to tolerate, what you reward and recognize, and how you behave informally rather than only in meetings. They used it through conversation and mutual feedback rather than as a reading exercise. - **Feedback vs. coaching** — Feedback is specific and tied to a moment: in that meeting yesterday, this happened, this is how it landed on me. Coaching starts from the belief that the truth sits inside the person, so the work is finding the question that lets them reach the insight themselves. - **Guided discovery** — Jesse's term for the coaching half. Rather than supplying the answer, you ask the question that produces the realization in the other person's head. The conclusion is then theirs, which is what makes it something they act on rather than something they were told. - **Outcomes vs. numbers** — Roche shifted from working toward a number to working toward impact. Paul's objection to the number is behavioral: a target is something people can stop at once it is hit. An outcome is expressed as reaching a given share so that a given number of patients can be reached, which is a change in someone's life rather than a figure. - **Back-casting** — The inversion of forecasting. Describe at a high level where the company needs to be in five years, work back to where that means being in three, and then to the one-to-two-year outcomes that are the only route to the three-year ones. The future gives direction to the present rather than the present being extrapolated forward. - **Passive resistance** — People nod and agree in the meeting, then go back to what they were doing the next day. Paul names two forms: a leader who agrees verbally and disagrees mentally, usually out of fear for their own position, and anyone who has lost the connection to why this is happening and why now. - **Critical mass** — Paul's estimate is that fifteen to twenty percent of a population is enough to start the snowball, after which people tend to follow the mass. It is the reason a transformation does not need everyone at the outset, and the reason the early group matters more than its size suggests. - **Adversity Quotient (AQ⁠®)** — Dr. Paul Stoltz's measure of how a person responds to difficulty, which Jesse introduces in this episode and Paul is hearing for the first time. Its relevance here is the critical-mass number: rather than treating the willing fifteen to twenty percent as fixed, AQ is presented as a way to measure adaptability and raise it. - **Climbers, campers and quitters** — Stoltz's three groups, as Jesse describes them. Climbers accept that a better future means changing who they are. Campers have reached a point they do not want to lose and prefer the environment to stay as it is. Quitters have stopped. The argument Jesse makes is that these are measurable positions on a curve rather than fixed character, and the curve can be moved. ## Questions this answers ### Who is Paul Souren? Director Business Transformation at Roche, based in the Netherlands, with sixteen years at the company across marketing, sales, portfolio strategy and global roles. He was portfolio strategy director for the Dutch affiliate when a patent cliff arrived on several of its major products. ### Did he set out to work in commercial excellence? No. His words are that it was not by design. He came through commercial roles: marketing, sales, product and portfolio, in the Netherlands and globally. His view is that commercial excellence is fundamentally about using the people and money available to create the biggest customer impact, which is what those roles were about anyway. ### What is a patent cliff and what does it do to a company? It is the point at which exclusivity ends on the products the revenue depends on. In markets like the Netherlands, Paul describes revenue on those products evaporating within months once generics arrive. The date is known in advance, which is what makes it a planning problem rather than a shock, and it converts improvement into reinvention. ### What did Roche have to do after the cliff? Enter neuroscience, hemophilia and immunotherapy. Having been the big player in oncology, it was now the new arrival: not first to market, not first in class, not best in class. Paul's assessment was that this needed a completely different approach from the people and a different mindset, not a better version of the old one. ### How big was the organization at the time? Around seventeen thousand five hundred people in the international organization, and between a hundred and eighty and two hundred in the Dutch affiliate. The reinvention had to happen at that scale rather than in a startup. ### When did he shift from running a function to running the system? In the portfolio strategy role, and it happened organically. It was the first time he had to think not only about what the strategy was but about how to get there: what it would take from the people, how to bridge the gap, and what it required of him as a leader. Several changes stacking on top of each other, in his description. ### What is the difference between change and transformation? Change is continuing to improve what you already do, and taking the way of working that made you successful into new areas. Transformation is reinventing and redesigning how you work, including behaviors and mindsets, so how people show up is different afterwards. Paul's word for it is metamorphosis. ### Why does that distinction matter in practice? Because the first is portable and the second is not. Applying the approach that won in oncology to neuroscience is change, and it is a reasonable thing to try. What Roche found was that being the new arrival in an unfamiliar category needed people to think and act differently, which is a different piece of work with a different timeline. ### Do other transformation leaders draw the line the same way? Jesse notes the same distinction from Roy van Griensven, who put it to a CEO as an interview question: are you looking for change, or are you looking for transformation? If it is incremental improvement, I am probably not your person. If you want to transform this organization, with the pain that comes with it, I can help. ### How do you tell people that what got them here will not get them there? By separating the person from the situation. Paul's framing is that these are great people and the environment shifted, so what is required is different rather than better. The mistake is delivering it as a verdict on how they have been working, because that lands on identity rather than on method. ### What do leaders most often get wrong in a transformation? Paul lists them in one breath: lack of understanding of the why, of the direction, of the speed, of what the change requires of people, and an underestimation by leaders of what it takes from themselves. The last one is the one the others sit on. ### Why does leadership behavior matter more than the communication? Because people look to leaders, and the leaders are the force multiplier. Paul's line is blunt: if leaders are not willing to change, why should anyone else? A program can be explained perfectly and still be read off what the leadership is visibly doing. ### Is it acceptable for a leader to say they do not know? Paul's position is that it is an answer in itself: I do not know yet, let us find out together. It costs some ego and it shows that not knowing everything is human. If the search happens with the people, and mistakes are allowed along the way, it produces cohesion and sometimes urgency. ### What is the playground model? Leaders provide the guardrails and define a virtual playground. This is its size, here is the entrance, there is the exit, and you can use whatever is inside. The order in which people use it is up to them. And, in Paul's words, it is okay to fall off the swing. ### What does the swing clause add? Permission to get it wrong. A perimeter without it produces people who stay in the middle and check upward, because the unstated question is what happens when a decision inside the boundary goes badly. Saying it out loud is what converts a boundary into usable space. ### How did they decide where the boundaries sat? A Roche leader named three: do not compromise patient safety, do not break the law of the land you work in, and do not compromise the Roche brand. Inside those, you can make a lot of mistakes. The discipline is in naming three and stopping, because a longer list closes the space it was meant to define. ### Does the CEO stating the guardrails make them real? Not on its own. Paul's observation is that leaders are human, interpret direction through their own character, and create a smaller environment for their people out of that interpretation. In a company the size of Roche, some leaders disagree with a direction, and some agree verbally while disagreeing mentally. ### What do you do when a manager narrows the space the CEO opened? Feedback in the other direction. Paul's account is that people take the stated guardrails back to their leader and say the CEO said this, and you are not giving us the room to create impact. When that dynamic runs, you are no longer managing a program. You are shifting a culture. ### Why do people hand back the authority they are given? Because there is risk involved, and announcing empowerment does not remove it. Paul's condition is a line of sight on how the empowerment is ring-fenced, and he is specific that the fence is there for safety and security rather than to contain anyone. Without visible edges, using the authority is a personal gamble. ### Why does empowerment need accountability attached? Because it is the same act. Jesse's example is an executive who took the empowerment on offer, reframed the problem, built a case, ran a pilot and scaled it, and who had to put his own reputation behind the prediction. What he accepted along with the authority was the consequence of being wrong. Most people decline the second half, which is why they leave the first on the table. ### So is announcing empowerment enough? No, and Paul is careful not to judge any particular case. What he connects it to is the structure: the guardrails, the line of sight, and an explicit expectation that people take accountability. Empowerment stated without either is a message rather than a change. ### What is VACC? Visionary, architect, catalyst, coach. Four modes a leader moves between: setting direction, working out how to get there, bringing energy and keeping people focused, and drawing the answer out of someone. Paul's point is that leaders ideally do not show up the same way all the time, everywhere, with everybody. ### Where did the framework come from? Outside work rather than Roche, and Paul credits it rather than claiming it. What he does claim is the application: they took the terminology and made it usable in practice, which he treats as the part that mattered. ### Why invest disproportionately in leaders? Not because they matter more than anyone else, in Paul's framing, but because if leaders get it better, it is better for their people too. The multiplier runs the same way in both directions, which is also why an unconvinced middle layer does so much damage. ### What is the Five Frequencies work? A book on how a leader shows up, which Roche's leaders worked from: what you tolerate and refuse to tolerate, what you reward and recognize, and how you behave informally rather than only in meetings. It was applied through conversation and mutual feedback rather than as a reading exercise. ### Why did Roche have to build a feedback culture deliberately? Because it did not have one. Paul's description is that there was a lot of niceness in the organization, which he calls fantastic, and which does not make you better tomorrow than you are today. The feedback culture was put in place on purpose rather than assumed. ### What is the difference between feedback and coaching? Feedback is specific and tied to a moment: in that meeting yesterday, this happened, and this is how it landed on me. Coaching starts from the belief that the truth sits inside the person, so the work is finding the question that lets them reach the insight themselves. ### What is guided discovery? Jesse's term for the coaching half: asking the question that produces the realization in the other person's head rather than supplying the conclusion. The insight is then theirs, which is what makes it something they act on rather than something they were told. ### Did they try to build adaptability into the organization? Yes, though not under that name. The concrete move was abandoning the annual planning cycle in favor of much shorter planning and execution cycles. Paul reports it lowered risk aversion, which mattered because people had known the off-patent products and their customers for years and the new markets asked for something else. ### Why does a shorter cycle lower risk aversion? Because the cost of being wrong falls. On an annual cycle a wrong call is carried for a year, so the rational move is to avoid making one. On a short cycle it is corrected in weeks, which makes trying something the cheaper option. ### What is the difference between outcomes and numbers? Outcomes are about creating impact, and impact goes beyond hitting a figure. Roche's version translated a target market share into the number of patients that share reaches, which is a change in people's lives. Paul's behavioral objection to the number is that people can stop once they hit it. ### Is a customer metric like NPS an outcome? Paul's answer is that it can be a signal of success rather than the outcome itself. The outcome is the impact on the person at the end of the chain; the metric is evidence that you are producing it. ### What is back-casting? The inversion of forecasting. Describe at a high level where the company needs to be in five years, work back to where that means being in three, and then to the one-to-two-year outcomes that are the only route to the three-year ones. Paul's phrase is that you let the future give you direction. ### How is that different from a normal five-year strategy and annual plan? Paul declines to judge how other companies do it and names the difference for Roche precisely: instead of forecasting, they back-cast. The five-year picture sets the direction and each nearer horizon is derived from the one beyond it, rather than the near-term plan being extrapolated outward. ### Can you build capabilities and hit short-term numbers at the same time? You have to, and Paul says they did both simultaneously. The focus on numbers did not disappear; what changed was that the organizing question became the outcome rather than the figure. What he reports coming out of the first few years is more empowerment and accountability for the people closest to customers. ### What is passive resistance? People nod and agree in the meeting, then go back to what they were doing the next day. Paul names two forms. A leader agreeing verbally and disagreeing mentally, and anyone who has lost the connection to why this is happening and why now. ### Why do leaders agree verbally and disagree mentally? Fear for their own position, in Paul's account. Jesse's framing is that self-preservation sits under most passive resistance, and that people are more averse to loss than drawn to gain. Neither treats it as a character flaw, which is what makes it addressable. ### How do you address it in a senior leader? By acknowledging the uncertainty rather than talking past it, including that it may not resolve quickly. Then by being clear that they are not the wrong people in the wrong place: they are good people, and things are shifting. From there the question is a shared one about how to bridge the gap. ### What causes the second kind of passive resistance? Losing the thread of why. Not disagreement, but no live connection to why this is happening and why now. Paul's remedy is involvement in working out what needs to happen collectively, because that forces someone to think the why through themselves rather than receive it. ### Does a better-told why fix it? Not on its own, and Paul says so directly when Jesse presses him on whether some people simply stop caring. The other conditions of a good workplace have to exist too: leaders walking the talk, career perspective, development opportunities. Without those, a well-framed why lands on nothing. ### How much of the organization do you need to move first? Fifteen to twenty percent, in Paul's estimate, is enough of a critical mass that the snowball starts and the ball of change grows. Once there is traction, people tend to follow the mass. It is why the early group matters more than its size suggests. ### And the people who stay at the back? This is where Paul states the accountability half. It is not only about creating an environment for empowerment; it is about creating the expectation that people take accountability for it. If someone is keeping the bus from making progress, at some point they need to get off it. ### Is that critical-mass number fixed? That is the challenge Jesse puts to him, and it is the part Paul had not encountered before. The alternative on offer is Adversity Quotient: rather than treating the willing fifteen to twenty percent as a given, measure adaptability and work on raising it, on the argument that the distribution can be moved rather than only sorted. ### What are climbers, campers and quitters? Stoltz's three groups, as Jesse describes them. Climbers accept that a better future means changing who they are. Campers have reached a point they do not want to lose and would rather the environment stayed as it is. Quitters have stopped. The argument is that these are measurable positions rather than fixed character. ### Had Paul come across AQ before this conversation? No. Asked directly whether he had heard of the science, his answer is that he had not. What he had done independently was build for the same outcome by other means: shorter cycles, permission to fail, and leaders modeling the change first. ### How did Roche make the shift to agile stick? Three things, in Paul's account. Leadership alignment from the most senior people down to middle managers on the urgency and on creating an environment where mistakes and risk were allowed. Making it meaningful rather than safe. And celebrating the failures as well as the successes. ### What does making it meaningful mean? Not piloting in a low-stakes corner of the portfolio where failure would not matter. They ran the new way of working on the three launch products going into the new markets, which were the most important things they had. Paul's expectation was that the rest would follow, with help. ### Why not pilot somewhere low-risk first? Because a pilot everyone knows is low-stakes teaches the organization that the new way is optional. Putting it on the launches made it real, and made the question how do we make this work rather than whether it is worth adopting. ### Why celebrate failures? To make trying survivable. Paul pairs it with the guardrails: if the perimeter is stated and falling off the swing is allowed, then the failures have to be treated publicly the way the successes are, or the permission was rhetorical. Jesse's version is asking his daughters each night what they failed on. ### Where did the new thinking come from? Two sources. Consultancy help in the first few years, which Paul credits. And deliberately going outside for inspiration: the leadership team travelled to Silicon Valley for a week, and locally they took a hundred and eighty people out to other companies in the Netherlands to watch how somebody else does it. ### What is the point of taking a hundred and eighty people to look at other companies? Observation rather than instruction. The question afterwards is how could this work in our affiliate, in our country, which is the same guided-discovery move made at organizational scale. It also signals from the leadership that they do not have the answers and are willing to go and look. ### Does any of this apply outside pharmaceuticals? Paul's answer is that it is not unique to Roche or to pharma and can be applied across sectors. The pharmaceutical detail supplies the pressure and the deadline; the mechanism is a boundary, a stated set of things you may not do, and everything inside left to the people doing the work. ### What is the one-sentence version? Draw the playground, name the few things that are out of bounds, hand over everything inside it, and say out loud that falling off the swing is allowed. ## Quotations > "This is the size of the playground. Here's the entrance, there's the exit. You can use whatever is in that playground. In what order you do that, that is up to you. And it's okay to fall off the swing." > — Paul Souren > "Leaders don't have all the answers. But admitting that and saying I don't know yet, let's find out together, is also an answer." > — Paul Souren > "People will look to leaders. The force multiplier is the leaders. If leaders are not willing to change, why the hell should I change?" > — Paul Souren > "Change for me is continuing to improve on what you're doing, and applying the same way of working that always made us successful into the new areas." > — Paul Souren > "Transformation is completely reinventing and redesigning the way you work, including behaviors and mindsets. How people show up." > — Paul Souren > "As long as you don't compromise patient safety, as long as you don't break the law of the land that you work in, and as long as you don't compromise the Roche brand, you can make a lot of mistakes." > — Paul Souren, on the guardrails a Roche leader stated > "There was a lot of niceness in the organization, which is fantastic, but it doesn't make you better tomorrow compared to today." > — Paul Souren, on why Roche built a feedback culture on purpose > "Coaching is much more about believing that the truth sits within people themselves. As a coach, it's about what questions you can ask to help them reveal those insights to themselves." > — Paul Souren > "Not all leaders agree all the time with the direction. They verbally agree to it, but mentally, no. And that has an impact on how they lead people." > — Paul Souren > "Instead of forecasting, we started back-casting." > — Paul Souren > "It takes about fifteen to twenty percent of a population to create such a critical mass that the ball of change grows and grows." > — Paul Souren > "Don't experiment in a corner of your portfolio. We started with the three launch products into the new markets." > — Paul Souren, on where to put the new way of working > "Not only celebrate successes, but celebrate the failures as well." > — Paul Souren > "What got us there will not get us there in the future." > — Paul Souren > "You had to put your neck on the line. To be empowered, what he really accepted was a pile of accountability." > — Jesse Hopps ## Transcript ### Sixteen years, and not by design Jesse Hopps: It is always interesting to see how people got into commercial excellence. Sixteen years at Roche. Did you start in a commercial excellence role, or did you evolve into it? Paul Souren: No, this was not by design. I started in commercial roles: marketing, strategy. I have done marketing and sales at a product level and a portfolio level, both in the Netherlands and globally. But in the end it is about how to effectively use the resources, the people and the money available, to create the biggest customer impact. And to a certain extent that is what commercial excellence is about as well. In those years the experience and the learnings, the failures and the learnings, create the critical mass. That is what propels you forward into thinking about different ways of doing things, and helping people to get the best out of themselves. ### The patent cliff Jesse Hopps: I am curious about the point where you transitioned from being a contributor or a manager into working at a system level. Do you remember when that happened? Paul Souren: That was the strategy job. I was portfolio strategy director for the Dutch affiliate, which meant I was accountable for the individual product strategies and the overarching portfolio strategy. At that point in time, about eight or nine years ago, we were facing a patent cliff on a few of our major products. Products that made Roche the great company that it is, and helped millions of patients globally with various forms of cancer, solid tumors as well as hematological tumors. To continue to drive innovation, companies like Roche need to bring new innovations to market through research. And when a company faces a patent cliff, in many markets, and the Dutch market is one example, you see your revenues evaporate on those products within months. Jesse Hopps: They go to a generic solution, essentially. Paul Souren: Exactly. We knew that was coming, so it has an impact on your internal organization. ### The new kid on the block Paul Souren: A company like Roche is able to launch new products into markets every so often. But where we were the big player in oncology at that time, we were now entering markets where we were the new kid on the block. We needed to familiarize ourselves in neuroscience, in hemophilia and in immunotherapy. We were not first to market, we were not first in class or best in class. We needed a completely different approach from our people, a different way of working and a different mindset, to get a form of beachhead in those markets. Jesse Hopps: You look at a big company like Roche and you never think they have major adversity like a patent cliff, where all of a sudden they need to reinvent themselves, no longer the eight-hundred-pound gorilla, figuring it out almost like a startup but at major scale. How many employees did Roche have then? Paul Souren: In the international organization, around seventeen thousand five hundred. In the Dutch affiliate, maybe between a hundred and eighty and two hundred. And as it always is with things like this: what got us there will not get us there in the future. ### From running a function to running the system Paul Souren: Coming back to when I started thinking about transitioning, it happened organically, because it was the first time as a leader that I needed to think not only about portfolio strategy but about how we get there. How do we bridge the gap? What does it need to get our people there? And what is then needed from me as a leader to help them get there? These are multiple changes stacking on top of each other. ### Change and transformation are different beasts Jesse Hopps: You had a pretty acute way of describing the difference between change and transformation. How would you define it? Paul Souren: For me, change and transformation are two different things. Change is continuing to improve on what you are doing. Incremental improvement on the current status. And applying the same way of working that we always did in oncology, that made us successful, into the new areas and the new markets we want to enter. Jesse Hopps: So you transplant the way you think and act into the new application area. Fundamental thinking and acting stays relatively the same. Paul Souren: Yes. And transformation, I believe, is a profoundly different beast. Transformation is completely reinventing and redesigning the way you work, including behaviors and mindsets. How people show up, and what is actually needed to make that transformation happen. Transformation is going from one state to another state. Jesse Hopps: You need to fundamentally get people to change how they think and how they act, as opposed to moving them from doing what they do and thinking the way they think into a new area. It is the caterpillar turning into the butterfly. Paul Souren: It is a metamorphosis. Jesse Hopps: That is in line with what Roy van Griensven told me. He took a job at a big German chemicals company, and in the interview process he asked the CEO a fundamental question: are you looking for change, or are you really looking for transformation? Because if you just want incremental improvement, I am probably not your guy. But if you truly want to transform this organization, with all the pain that is going to come along with that, I think I can help you. ### Where it goes wrong Jesse Hopps: If you tell people what got you here is not going to get us there, you are touching their beliefs and their identity. They were successful. The environment changed, so it is not that they did something wrong. But you need people to fundamentally think and act differently. Where do organizations get this wrong? Paul Souren: It is about understanding, or lack of understanding, of the why. Lack of understanding of the direction, of the speed. Lack of understanding by leadership of what it requires of people. Underestimation by leaders of what it takes from themselves as well. Because in the end, people will look to leaders. The force multiplier is the leaders. If leaders are not willing to change, why the hell should I change? And as a disclaimer: we make mistakes. You do not learn without mistakes. Before we got there it was a continuous loop of reinventing ourselves on the go, and that in itself brought a lot of value. ### Leaders do not have all the answers Paul Souren: When you shift from one market to another, it starts with alignment on what we know and what we do not know. By taking that approach and bringing people alongside you as a leader, it became clear that there were many unknowns. The question is how we get answers, and how you involve people in getting them, rather than letting them depend on the illusion that leaders know it all. Because leaders do not know it all. Jesse Hopps: There is ego involved in letting go, in letting the people you are leading figure things out and not rely on you for the answers. Paul Souren: Leaders do not have all the answers. But admitting that and saying I do not know yet, let us find out together, is also an answer. It takes away some of your ego and shows that it is only human not to know everything. And if on the way to an answer with your people it is okay to make mistakes, it shows you are all in the same boat. That creates cohesion, and sometimes even a sense of urgency. ### The playground Paul Souren: At that moment we decided to create an environment where, as leaders, we provided the guardrails and designed not a framework but what I would call a virtual playground. And we said to the people: you can all be involved. This is the size of the playground. Here is the entrance, there is the exit. You can use whatever is in that playground. In what order you do that is up to you. And it is okay to fall off the swing. Jesse Hopps: So you give them the what and the why in terms of guardrails, and you let them figure out the how. Paul Souren: Exactly. ### Four ways a leader shows up Paul Souren: It boils down to a form of situational leadership, which is not a new term, and I am not sure I completely like it, but it is not so much about the terminology as about how you apply it. We worked in the beginning with some consultants, some of them from the big four, who were really helpful. We took some of that terminology and found a way to put it into practice. An example is that leaders ideally do not show up in the same way all the time, everywhere, with everybody. Sometimes you need to be more of a visionary. Sometimes more of an architect: how are we going to get there. Sometimes it is about coaching. And another time it is about catalyzing, bringing energy into the room and making sure people continue to be focused. Visionary, architect, catalyst and coach. Jesse Hopps: I feel like I have already stepped through all of those just this morning. Paul Souren: This is not something that we invented, so kudos where it is due. But it worked for us. We made it work. ### Five Frequencies, and building a feedback culture Paul Souren: A lot of time and money was invested in leaders. Not because they are more important than other people, but if the leaders get it better, it is better for their people as well. One of the concepts we applied was the five frequencies. There is a book about it. It is about how you show up as a leader. What you tolerate and do not tolerate. What you reward and recognize. How you show up informally, so not only in meetings but also when you meet somebody in passing. Jesse Hopps: Was this a book club, everyone reads it and then you talk about it? Paul Souren: By having a lot of conversations and applying a lot of feedback to each other. That was another big shift, because Roche did not necessarily have a great feedback culture. There was a lot of niceness in the organization, which is fantastic, but it does not make you better tomorrow compared to today. Jesse Hopps: So you intentionally put a feedback culture into place. ### Feedback and coaching Jesse Hopps: How would you distinguish feedback from coaching? Paul Souren: Feedback is mostly specific and linked to a certain time and moment. Great feedback for me is when you are able to call it out: Jesse, yesterday in that meeting, this happened in this specific situation, I felt like this, and that created a certain impact on me. It is highly specific to a situation. Coaching on the other hand is much more about believing that the truth sits within people themselves. As a coach it is about what questions you can ask to help them elevate or reveal those insights to themselves. Jesse Hopps: We call that guided discovery. Instead of telling people the answer, you ask the right question so the epiphany happens in their mind. ### Abandoning the annual cycle Jesse Hopps: How did you go about improving the adaptive capacity of the organization? Were resilience and adaptability things you intentionally tried to measure or coach on? Paul Souren: Maybe we did not call it that, but we for sure tried to build it in, and we have successfully built it in. One of the big shifts was to completely abandon the yearly planning cycle and move into much shorter cycles. It helped to lower the risk aversion of some of our people. With the products that went off patent, people had known them for years and knew their customers. Entering the new markets required a completely different approach. So we went into shorter planning and execution cycles, and focused much more on impact than on hitting a certain number. Because if you work toward a number, there is a risk that people stop working once they hit it. ### Outcomes instead of numbers Jesse Hopps: Can you describe the difference between outcomes and numbers? Are numbers not a form of outcome? Paul Souren: The way we see it, outcomes are about creating impact, and impact goes beyond hitting a certain number. Jesse Hopps: Could you give an example? Would something like a customer satisfaction score be an outcome? Paul Souren: That could be a signal of success. But how we described it was: let us say we want a market share of X percent, so that this number of patients can be reached. It is about changing people's lives. Jesse Hopps: So you get very intentional about the end impact. The benefit-how part. ### Forecasting and back-casting Paul Souren: The way we did that was basically back-casting. We described at a high level where we want to be in five years from now, the long-term outcomes. That describes where you directionally need to be about three years from now to achieve them. The three-year outcomes are the midterm outcomes, and they can be a bit more specific. And the three-year outcomes can only be reached if you hit your short-term outcomes, which are your one-to-two-year outcomes. Jesse Hopps: How is that different from a typical five-year strategy and one-year operating plan? Paul Souren: I cannot judge that perspective. The difference for Roche was that instead of forecasting, we started back-casting. Let the future give us direction. Jesse Hopps: What would need to be true to reach the outcome in five years, and then problem-solve your way toward it, knowing if you are on track from the markers at one and three years. Paul Souren: Yes. And to come back to balancing the new way of working with building capabilities: we needed to do that simultaneously. And strangely enough, over the first few years, there was a lot more empowerment and accountability for the people closest to the customers. ### Empowerment, and the neck on the line Jesse Hopps: I heard from a CEO recently who felt they had sent the message of empowerment across the organization: go solve issues, take resources, do what you need. There was one person who stepped up and took it. He reframed the problem, built a case, found evidence in a pilot and scaled it up, and was really successful. But the part that resonated with what you said is that he had to put his neck on the line. To be empowered, what he really accepted was a pile of accountability. Most people do not take the empowerment. They are afraid of the accountability that comes with it. Why are so many leaders hesitant to actually be empowered? Paul Souren: Because there is risk involved. I cannot judge the example you gave. But I want to connect it to what we talked about before, about providing structure and guardrails, because only if people have a line of sight on how empowerment is ring-fenced. And that is not to contain them, but to provide them with safety and security. ### The three non-negotiables Jesse Hopps: That is the psychological safety of the empowerment, because there is a dark underbelly of personal risk. It sounds so positive, you are all empowered. But does that mean if I take that power and use it, I could lose my job? Paul Souren: That may be true. But we had a great leader who said, in the case of Roche, there are a lot of things you can make mistakes on. But as long as you do not compromise patient safety, as long as you do not break the law of the land that you work in, and as long as you do not compromise the Roche brand, you can make a lot of mistakes. Jesse Hopps: So there are non-negotiables. Those are your guardrails. Failing that, it is not the end of the world if you take a shot and get to eighty percent of what you thought you could do. That is part of learning and growth. Did that actually create more momentum for people to take the empowerment? Paul Souren: Yes, that really helps. ### The verbal yes and the mental no Paul Souren: If a CEO says that, it does not mean that all leaders pick it up the same way, because leaders are only human. They interpret things, and they create a small environment for their people based on their own character and personality traits, and their interpretation of what outcomes should be. In a huge organization like Roche, not all leaders agree all the time with the direction. They verbally agree to it, but mentally, no. And that has an impact on how they lead people. So if the CEO says those three things, people can take that back and give feedback to the leader and say: the CEO says this, and you are not giving us the room to create impact. That creates internal dynamics. And if you have that dynamic going, you are talking about a culture shift. ### Where passive resistance comes from Jesse Hopps: You mentioned the middle layer, the verbal yes and the mental no. We call that passive resistance. Where have you seen it put the emergency brake on the work you were doing? Paul Souren: Two things come to mind, in random order. The first is leaders, middle managers or even some senior leaders, verbally buying in but mentally not. This might occur because they fear for their own job. Jesse Hopps: Self-preservation. We are much more averse to loss than we are drawn to gain. Paul Souren: As senior leaders in those situations, it is again about acknowledging that there is uncertainty, and that it may not be resolved in the short term or within a certain timeframe. It will stay for a while. And also assuring them that it is not that they are the wrong people in the wrong place. They are great people, but things are changing and shifting. The environment has changed. So how can we help them bridge that gap, or come to a joint conclusion about the capabilities needed in the future. The other one, and this can be regular employees and leaders at the same time, is that passive resistance occurs when people do not completely understand the why, or have lost connection to why we are doing this and why we are doing it now. Getting them involved in what needs to happen collectively requires them to really think about that why themselves. ### When the why is not enough Jesse Hopps: This is the elephant in the room sometimes. Looking at engagement scores across big enterprises, I am not sure it is fair to assume everyone really cares about the corporate mission on a personal level. Did you ever feel you had a good narrative and a good why, and there were still people who did not seem to care about it? Paul Souren: That is certainly not always enough. We mentioned capability building, but some of the other elements of having a great workplace need to be there as well. Leaders need to walk the talk. If there is no career perspective or development opportunity, people lose their motivation. But I want to come back to the point you raised, because it takes about fifteen to twenty percent of a population to create such a critical mass that the snowball gets bigger and the ball of change grows and grows. If there is traction, people tend to follow the mass to a certain extent. Jesse Hopps: You have to get the coalition of the willing moving faster than the detractors pull everyone down. Paul Souren: Then at some point you have the tail of the curve. And it is like that empowerment and accountability story: it is not only about creating an environment for empowerment, it is also about being very clear and creating an expectation that people take accountability. So when it comes to change, and people do not want to change, and the narrative is not enough, at some point you need to be clear that if they are dragging the bus from speeding up and making progress, they need to jump off the bus. ### Whether the critical mass is fixed Jesse Hopps: That is the standard response to change, and I want to challenge it a little. I have spent the past two or three years working with Dr. Paul Stoltz, the world's leading expert on human adaptability and resilience. He is master coach to the US Olympic team, his science is used at Harvard, Stanford and INSEAD, and MIT uses his assessment in admissions. Because he has figured out that if you want that fifteen percent, the number of those willing to get on the bus early, there is a way to increase how many people hop on. It is called Adversity Quotient, and it assesses how you perceive and respond to challenges, the way IQ assesses intelligence. Transformation is always full of adversity. Change management was always: get twenty percent on the bus, the middle will follow, and the last group gets more jaded over time and maybe leaves. We are leaving people behind by default. What Stoltz says is that there is a bell curve inside your population made up of three groups: climbers, campers and quitters. If you assessed the AQ of every coalition of the willing you have ever assembled, I would almost guarantee they have a proportionally higher AQ. They are just more adaptable. And the rub is that it is not about getting rid of the people at the tail. It is how you invest in them. A camper is someone who has arrived at a point in their career and does not want to lose what they have gained, so they hunker down and want the environment to stay the same. A high-AQ person thinks there may be a better future, but I am going to need to change who I am. The point is that you can measure and then strengthen AQ in everybody. Have you ever heard of this science before? Paul Souren: No, I have not. Jesse Hopps: Stoltz's line is that if you and your top competitors are dealing with essentially the same set of challenges, patent cliffs and the rest, isn't it fair to say that those who deal with them better and faster will win? ### How the agile shift was made Jesse Hopps: How did you transition people from traditional strategic planning and stage-gate project management to agile, not from a systems and tools perspective but on the mindset? Paul Souren: Two or three things, in random order. The first is the leadership component again. Really make sure that from the most senior leaders in the organization to the middle-level leaders all over the world and in our affiliates, people really understood the sense of urgency of the change that was needed, and the necessity of creating an environment where people were allowed to make mistakes and take risks. The other thing, which we did specifically in the Netherlands and which was later applied in other countries and globally, is to make it meaningful. Do not experiment in a corner of your portfolio where, if things go southwards, it does not matter. Jesse Hopps: Do not limit your risk too much. Make it a real, high-stakes thing. Paul Souren: Exactly. We started experimenting with this way of working on the three launch products going into the new markets. Jesse Hopps: The most important things you had. Paul Souren: And the rest will follow. We will help you, but you will follow. And the third is not only to celebrate successes, but to celebrate the failures as well. ### Going out to look Jesse Hopps: How did you come to these conclusions about the behavioral side? Did you figure it out naturally, or did you get help? Paul Souren: Two things. Yes, we got help, from some consultancy companies in the first few years at least. The second is that we deliberately went out, as the affiliate leadership team and also internationally, and sought inspiration in other industries and outside our own geographical area. We went to Silicon Valley for a week. Jesse Hopps: Spend some time with the tech companies and their culture. Paul Souren: And then: how could this work in our affiliate, in our country? From a very humble point of view, you just observe. And on a local level in the Dutch affiliate we offered the same kind of inspiration, not to Silicon Valley but locally in the Netherlands. We literally brought a hundred and eighty people to different companies and said: this is how they are doing it here. Jesse Hopps: Rather than doing a maturity assessment and saying here is the roadmap, being very judgmental about the current state, you said we do things a certain way now, and maybe there are other ways to look at it. It is the humility that comes shining through, and the ability of senior leadership to signal to frontline staff that we do not know everything. Let us go see what we can learn. ### Where the logic applies Paul Souren: What we talked about is not unique to Roche or to pharma in general. It can be applied in many sectors and industries. That said, my professional career has developed and grown in the life science sector, before Roche as well. That is the world I know, and it is a sector I feel makes an impact on people's lives, as many other sectors do. That is where I would love to continue to bring value. Jesse Hopps: Pharma, med tech, that kind of thing. Paul Souren: Science-based, but it could also be science-based nutrition. Jesse Hopps: Increasingly, nutrition is probably the way to focus on avoiding the need for the medicines later on. Paul Souren: Absolutely right. So if there is a place where I can help people get the best out of themselves in service of the company's objectives and purpose, I am your man.