EMBRACING QUALITY CULTURE IN BIOPHARMACEUTICAL COMPANIES

1. EMBRACING QUALITY CULTURE IN BIOPHARMACEUTICAL COMPANIES For Taiwan PDA Ben Chen, P.E. November 16, 2015

2. TOPICS • Ten Warning Signs of A Weak Quality Culture • Quality Culture Measurement • Quality Culture Summary • Culture Transformation • Douglas McGregor – Theory X and Y • Leadership vs. Management • Situational Leadership • Communication Rules BEN CHEN

3. INTRODUCTION • What is Quality Culture? • Quality Culture plays a critical and complimentary role because it affects the decisions that contribute to the data that are used for calculating the metrics. A good quality culture is often described as one that puts the interest and safety of patients and consumers above all else and where people do what is right versus what is good enough. Quality Drives Business; Not the Other Way Around! • Srinivasan and Kurey define Quality Culture as “an environment in which employees not only follow quality guidelines but also consistently see others taking quality-focused actions, hear others talking about quality, and feel quality all around them” Systems, Not People, Drive Quality! An environment in which each and every person understands and embraces their responsibility for protecting product quality and patient safety. BEN CHEN

4. PURPOSE This course will provide the aspects of quality culture, steps of culture transformation, and the skills of situational leadership for supervisors and non-supervisors to improve corporate quality culture and build a coherent approach, which the pharmaceutical industry and regulators can adopt. BEN CHEN

5. TEN WARNING SIGNS OF A WEAK QUALITY CULTURE Reference: Culture of Quality (Forbes Insight) • The CEO and other senior executives rarely discuss quality—let alone performance against quality objectives. • The company’s quality vision is either non-existent or has minimal linkage to business strategy. • Managers throughout the organization either fail to consistently emphasize quality or are resistant to quality initiatives. • The organization has few if any feedback loops for continuous improvement of processes. • The company lacks formal mechanisms for collecting and analyzing customer feedback. • Metrics used for performance evaluation feature little-to-no mention of quality goals. • Employees are not familiar with the company’s quality vision and values—or perhaps worse, view them as mere slogans. • Training and development do not emphasize quality. • New hires are not formally introduced to the organization’s quality vision and values. • The organization experiences frequent, though often minor, setbacks owing to inconsistent quality. BEN CHEN

6. QUALITY CULTURE MEASUREMENT • The PDA Quality Metrics Task Force has hypothesized that there are certain behaviors that correlate with a strong quality culture, and that these behaviors are driven by maturity attributes that can be measured and quantified. The executives and non-executives view themselves with regards to maturity level Density curves of the cross-functional vision category per survey It should be no surprise that executives have a rosier view than non-executives. while 75% of senior or C-suite titles believe this, responses drop to less than half among those with quality job titles. The further from the C-suite, the less favorable the view of the culture of. More executives were selecting a higher number of observed cross-functional behaviors than non-executives. BEN CHEN

7. QUALITY CULTURE SUMMARY The top five observed behaviors and top five maturity attributes from those identified by the PDA. The observed behaviors identified were Leaders who exemplify quality culture behavior Incentive program supports a strong quality culture Timely feedback and coaching of job performance Following clear and transparent governance processes Adoption of a quality by design (QbD) mindset and approach Similarly, the top five maturity attributes identified were Management communication that quality is everyone's responsibility Site has formal quality improvement objectives and targets Clear performance criteria for feedback and coaching Quality topics included in at least half of all-hands meetings Collecting error prevention metrics BEN CHEN

8. CULTURE TRANSFORMATION • Matching the right person at the right job • Educational and career backgrounds • Douglas McGregor’s X-Y Theory • Job preference vs. company’s needs • Balancing the team strength • Levels of competence and commitment • RACI & leadership identification • Set effective “SMART” goals • Exercising effective leadership • The traits of effective leaders • The traits of successful managers • Situational leadership styles BEN CHEN

9. CULTURE TRANSFORMATIONMATCHING THE RIGHT PERSON AT THE RIGHT JOB • Educational and career backgrounds • Meeting employees one-on-one to get acquainted with them from personal levels and learn about their educational and career paths to see if they do what they know. • Providing peer mentorship and on-the-job training to subordinates who need to close their gaps between what they do and what they know. • Douglas McGregor’s X-Y Theory • Most people prefer ‘Y-theory’ management. These people are generally uncomfortable in ‘X-theory’ situations and are unlikely to be productive, especially long-term, and are likely to seek alternative situations. • Job preference vs. company’s needs • Understanding how much employees enjoy their jobs and what their short-term and long-term career goals are. (Periodically) • Working with HR to develop employee retention program. (Periodically) BEN CHEN

10. CULTURE TRANSFORMATIONBALANCING THE TEAM STRENGTH • Levels of competence and commitment • Identifying high or low level of competence and of commitment. • Equalizing levels of competence and commitment among teams. • RACI & leadership identification • Establishing RACI of the tasks of each team. • Defining roles and responsibilities. • Evaluating headcount conditions. • Set Effective “SMART” Goals • Identifying Company’s goals and defining personal “SMART” goals. • Developing personal action plan to success. • Monitoring performance progress. BEN CHEN

11. CULTURE TRANSFORMATIONEXERCISING EFFECTIVE LEADERSHIP • The traits of effective leaders according to Kazmier: • Intelligence • Communication skills • Ability to assess group goals • The traits of successful managers according to Yntema: • Ability to see and solve problems • Ability to deal with people effectively • Communication ability • Organizational ability • Persistent effort • A good memory • Situational leadership styles Directing, Coaching, Supporting, and Delegating Leadership Styles BEN CHEN

12. X-Y THEORY’ QUESTIONNAIRE BEN CHEN

13. X-Y THEORY’ QUESTIONNAIRE(Continued) Score the statements (5 = always, 4 = mostly, 3 = often, 2 = occasionally, 1 = rarely, 0 = never) BEN CHEN

14. DOUGLAS MCGREGOR - THEORY X Y Douglas McGregor, an American social psychologist, proposed his famous X-Y theory in his 1960 book 'The Human Side Of Enterprise'. Theory x and theory y are still referred to commonly in the field of management and motivation. McGregor's XY Theory remains central to organizational development, and to improving organizational culture. BEN CHEN

15. BEN CHEN

16. A good leader is an effective leader, who possesses Y-Theory characteristics and understands that authority only exists to the extent where subordinates will allow it to exist. The leader has to make his subordinates believe that his subordinates are his best interests, he can maintain strengthened relationships with the informal organizations, and he makes sound decisions all the time to gain or sustain his authority. • A good leader is a visionary leader, who is guided by principle and always helps his team take steps that are difficult in the short term but helpful in the long term. To be helpful to his team in the long term, he would educate his team and then motivate them to sacrifice in the short term in order to achieve greater benefits over the longer term. • The best leader walks behind his subordinates and serves them in whatever way that he can as described by Lao-tzu, the ancient Chinese philosopher: “To lead the people, walk behind them.” In addition, a good lead should possess three traits according to Kazmier: intelligence, communication skill, and the ability to assess group goals. BEN CHEN

17. SITUATIONAL LEADERSHIP Goals: • Retaining Talent • Reducing Turnover • Enhancing Efficiency • Strengthening Communications Purposes: • Breaking In • Developing Competence • Gaining Commitment BEN CHEN

18. SITUATIONAL LEADERSHIPBreaking In • Thinking of yourself as a supervisor instead of as a worker. • Past: Measuring how well you did your specialty. • Now: Measuring how well you keep your team as a whole. • Overcoming Resentment • The reasons for resentment may not always be clear or rational. (i.e. Jealousy) • No magic formulas, but try to ask your subordinates for their advice – they are flattered when asked. What if you solicit advice and then don’t take it? • Reject it privately. Never embarrass a person by turning down his or her suggestions in front of others. • Do it diplomatically. Instead of telling them their advice is not good, ask further questions about it. Good questions will enable them to find the weaknesses in their advice. BEN CHEN

19. SITUATIONAL LEADERSHIPBreaking In (Continued) • What should we do to give respect to our people? • Ask for their advice • Listen to them • Give them responsibility • Be there for your people • What do we do to earn respect? • Be good in what you do • Treat your people fairly • Stick up for your people • Give your people credit BEN CHEN

20. SITUATIONAL LEADERSHIP What is Situational Leadership? The situational leadership (theory) model is a leadership theory developed by Paul Hersey, professor and author of the book The Situational Leader, and Ken Blanchard, leadership guru and author of The One Minute Manager. The theory was first introduced as "Life Cycle Theory of Leadership". During the mid-1970s, "Life Cycle Theory of Leadership" was renamed "Situational Leadership theory". Situational Leadership II is an improved version and has been the world’s most taught leadership model for more than 30 years. Its foundation lies in teaching leaders to diagnose the needs of an individual or a team and then use the appropriate leadership style to respond to the needs of the person and the situation. For individuals, teams, and whole organizations, the Situational suite of programs equips people at all levels of your organization to lead at a higher level.  The Ken Blanchard Companies is the leading institute for leadership training http://www.kenblanchard.com/Solutions/Situational-Leadership-Development/Situational-Leadership-II BEN CHEN

21. SITUATIONAL LEADERSHIP (High) S U P P O R T I V E High Directive and High Supportive Behavior High Supportive and Low Directive Behavior S3 S2 S4 S1 High Directive and Low Supportive Behavior B E H A V I O R Low Supportive and Low Directive Behavior (High) (Low) DIRECTIVE BEHAVIOR HIGH MODERATE D3 LOW D1 D4 D2 BEN CHEN DEVELOPMENT LEVEL OF FOLLOWER(S)

22. LEVELS OF DEVELOPMENTD1LOW COMPETENCE, HIGH COMMITMENT “Enthusiastic Beginner” BEN CHEN

23. ENTHUSIASTIC BEGINNER • Development Level 1 • Low Competence • High Commitment • Characteristics/Needs • Recognition of enthusiasm and transferable skills • Clear goals and roles • Standards for what a good job looks like • Timelines and Priorities • Information on how data about performance will be collected and shared • Action plans-specificdirection about how, when, and with whom • Boundaries and limits • Information about the goal or task and the organization • The unwritten rules on "how things work around here" • A step-by step process for learning new skills • Hands-on training-being shown and told how • Concrete examples of how others accomplish the goal or task • Opportunities to practice • Frequent feedback on results • Solutions to problems BEN CHEN

24. LEVELS OF DEVELOPMENTD2SOME COMPETENCE, LOW COMMITMENT “Disillusioned Learner” BEN CHEN

25. DISILLUSIONED LEARNER • Development Level 2 • Low to Some Competence • Low Commitment • Characteristics/Needs • Clear goals • Perspective • Frequent feedback • Praise for making progress • Help in analyzing successes and failures; assurance that it is OK to make mistakes • Explanations of why the goal or task is important • Opportunities to discuss concerns and share feelings • Involvement and influence in decision making and problem solv ing • Encouragement • Advice/additional next steps/alternatives • Coaching to build and refine skills BEN CHEN

26. LEVELS OF DEVELOPMENTD3 MODERATE TO HIGH COMPETENCE, VARIABLE COMMITMENT “Reluctant Contributor” (Capable, but Cautious Performer) BEN CHEN

27. RELUCTANT CONTRIBUTOR Development Level 3 Moderate to High Competence • Variable Commitment • Characteristics/Needs • An approachable mentor or coach • Opportunities to test ideas • Opportunities to express concerns and share feelings • Support and encouragement to develop self-reliant problem solving skills • Help in looking at experience and skills objectively, so confidence is built • Praise and recognition for high levels of competence and performance • Removal of obstacles to goal accomplishment • A kick-start to overcome procrastination BEN CHEN

28. SITUATIONAL LEADERSHIP (High) S U P P O R T I V E High Directive and High Supportive Behavior High Supportive and Low Directive Behavior S3 S2 S1 High Directive and Low Supportive Behavior S4 B E H A V I O R Low Supportive and Low Directive Behavior (High) (Low) DIRECTIVE BEHAVIOR HIGH MODERATE D3 LOW D1 D4 D2 BEN CHEN DEVELOPMENT LEVEL OF FOLLOWER(S)

29. LEVELS OF DEVELOPMENTD4HIGH COMPETENCE, HIGH COMMITMENT “Peak Performer” (Self-Reliant Achiever) BEN CHEN

30. PEAK PERFORMER Development Level 4 High Competence • High Commitment • Characteristics/Needs • Variety and challenge • A leader who is more of a mentor and col league than a manager • Acknowledgment of contributions • Autonomy and authority • Trust • Opportunities to share knowledge and skills with others BEN CHEN

31. DETERMINATION FOR LEVELS OF DEVELOPMENT Development LevelIsTask Specific! • Competence Includes • Task • Knowledge • Skills • Commitment Includes • Motivation • Confidence It is very common that one person may have different levels of development required from different projects or assignments. BEN CHEN

32. SITUATIONAL LEADERSHIP (High) S U P P O R T I V E High Directive and High Supportive Behavior High Supportive and Low Directive Behavior S3 S2 S1 High Directive and Low Supportive Behavior S4 B E H A V I O R Low Supportive and Low Directive Behavior (High) (Low) DIRECTIVE BEHAVIOR HIGH MODERATE D3 LOW D1 D4 D2 BEN CHEN DEVELOPMENT LEVEL OF FOLLOWER(S)

33. LEADERSHIP STYLEDIRECTING (S1)HIGH DIRECTION, LOW SUPPORT • Acknowledges enthusiasm and transferable skills • Defines goals, timelines, and priorities • Defines roles, limits, and boundaries • Takes the lead in action planning and problem solving • Organizes and shares information and resources • Develops a plan for learning and practicing new skills. • Teaches and shows how • Gives examples of what a good job would look like • Checks and monitors learning frequently to give feedback “Leader Decides” BEN CHEN

34. LEADERSHIP STYLECOACHING (S2)HIGH DIRECTION, HIGH SUPPORT • Involves the individual in clarifying goals and action plans, but makes final decisions • Listens to the individual’s concerns and ideas • Provides perspective that progress is being made • Involves the individual in problem solving and decision making • Helps the individual analyze successes and failures and consider alternatives • Gives advice and ideas; shares examples of others’ work • Provides information, resources, and coaching to continue building and refining skills • Explains why (about what and how) • Encourages and provides frequent feedback and praise to build competence. “Let’s Talk, Leader Decides” BEN CHEN

35. LEADERSHIP STYLESUPPORTING (S3)LOW DIRECTION, HIGH SUPPORT • Encourages the individual to take the lead in goal setting, action planning, and problem solving • Asks questions, listens to concerns, and serves as a sounding board • Facilitates self-reliant problem solving and evaluation • Asks: How can I help? • Shares expertise and collaborates when asked • Provides support, reassurance, encouragement, and praise to acknowledge competence and build commitment • Reflects on past successes and skills to build confidence • Suggests ways to make the goal more interesting or challenging, if motivation is low • Removes obstacles to goal accomplishment “Let’s Talk, D3 Decides” BEN CHEN

36. LEADERSHIP STYLEDELEGATING (S4)LOW DIRECTION, LOW SUPPORT • Expects the individual to take charge and keep others informed • Expects the individual to take responsibility for goal setting, action planning, and decision making; confirms plans • Trusts the individual’s judgment • Expects the individual to evaluate his or her own work and to continually innovate • Encourages the individual to challenge himself or herself to even higher levels of performance • Provides opportunities to share knowledge and skills, mentor and teach others • Acknowledges, values, and rewards contributions • Provides additional resources as required “D4 Decides” BEN CHEN

37. COMMUNICATION RULES The Power of Transparent Communication By Meg Whitman, CEO at HP • Start small – Tear down “commando fence” • Communicate the problem, but focus on solutions • Empower your people • Transparency upwards and downwards in consistency Taiwan PDA November 16, 2015 BEN CHEN

38. BE A “SUPER” SUPERVISOR! Two Types of Mismatch: • Oversupervision: S1/S2 with D3/D4 • Undersupervision: S3/S4 with D1/D2 The Goal is a Match: S1  D1 S2  D2 S3  D3 S4  D4 Taiwan PDA November 16, 2015 BEN CHEN

39. THANK YOU FOR YOUR ATTENTION! Any Questions? Please contact Ben Chen E-Mail: ben@qualicle.com Cell Phone #: (Taiwan) 0905-732-723 (US) (925) 621-9101 Taiwan PDA November 16, 2015 BEN CHEN