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Boosting pharma’s metabolic rate

How using more diversity at the top can speed-up change


There has never been a more exciting time to work in pharmaceuticals and the life science industry. Fast-moving developments in medicine and science, combined with big changes in society and our approach to healthcare, mean the industry is going through a period of almost unprecedented transformation.

New frontiers such as cell therapy and RNAi are becoming therapeutic realities and exciting new challenges are coming over the horizon, creating a constantly shifting landscape that leaders must navigate.

The companies that will prosper in this rapidly evolving world will be those that are most agile and whose leaders are best equipped to deal with constant disruption and stay ahead of the competition, whether that comes from established or newly emerging rivals.

For many organisations that is going to require a radical new approach to the way they do business, which in turn will need a new generation of talented executives who can thrive in this environment.

Reshaping the future

What has worked in the past may not work in the future. The industry has been built on the blockbuster drugs model where the Holy Grail is discovering, developing and marketing medicines that can generate $1bn or more of annual revenue.

Many companies have built their management structures and cultures around that, reinforced by regulatory hurdles that encourage me-too thinking, focused on new versions of existing bestsellers, with the result that improvements in scientific and medical knowledge tend to be incremental.

For certain medical conditions, such a strategy may continue to be worthwhile, but as science, technology and our understanding of population health management advance rapidly, the focus turns to the concept of personalised medicine targeted at specific patient groups. However, this type of cutting edge research requires an external innovation and ‘collaboration mindset’.

At the same time, governments are under more financial pressure than ever before and the debate about how taxpayers and individuals pay for healthcare is only going to intensify.

Faced with such momentous change on so many fronts, the pharmaceutical and medtech/life science industries must evolve rapidly and companies that fail to adapt risk being left behind.

What is required is a more agile and dynamic type of company with leaders to match, from senior managers to chief executives.

Defeating inertia

Yet, all too often, inertia holds back the pharmaceutical industry and some of the larger organisations within it. They are too conservative in the way they hire senior managers, failing to develop a diverse talent pool, leading to a shortage of the skills that will be needed in the future.

Research we carried out at Heidrick & Struggles for our recent Route to the Top report for pharmaceuticals and medtech/life sciences, based on 104 executives in 27 companies, shows the scale of the challenge.

There are some positives and the UK pharmaceutical sector in particular is more internationally diverse when it comes to country managers and European heads than its German and French counterparts.

Almost 70% of the UK executives at the companies in our study come from outside Britain, while only 7% in France have international backgrounds and in Germany 33% of roles are held by non-German nationals.

The UK was also found to be the most gender diverse in pharmaceuticals, with women filling 38% of country manager roles, compared to 15% in Germany and 14% in France, while in medtech women make up 22% of country managers in France, against just 10% in the UK and Germany.

There is certainly no room for complacency because the pattern across both industries in all three countries is similar, with country manager positions still largely dominated by men in their early 50s and with almost two decades of service in their current company.

Changing a large pharmaceutical company is like steering a super-tanker on to a new course. It is not always easy, but when you are on the helm and see an iceberg ahead, you have to move quickly or face the consequences.

Companies have to evolve and so do their R&D and marketing. They need to recognise that getting a drug approved in the future will depend on the support and approval of a wider network of stakeholders than in the past. Recent commercial partnerships in the cell therapy space illustrate this.

New thinking

The pressures and demands on the general manager of the future will require new ways of thinking and the recruitment and promotion processes that might have worked well in the past are unlikely to succeed in the future.

If the industry is to change, we need to draw on a more diverse pool of talent to fill those management positions. Bringing in people from more diverse backgrounds infuses an organisation with new ways of tackling problems and ultimately a ‘collaboration mindset’ that supports external innovation and creative commercial partnerships. Biopharma company UCB is a good example of an organisation that has made patient-centricity a reality at the core of the business.

When we are looking to fill general manager positions - the feeder talent for more senior positions - we need to find those who have personal qualities and skills around communication, leadership and strategic thinking so that they can navigate this increasingly complex world.

Diversity in itself is not the goal and it does not necessarily have to be along the lines of gender, race or ethnicity. It is diversity of thought that is important and to nurture that we need to draw on people with different viewpoints and perspectives so that we improve our problem-solving capability.

Simply looking at candidates’ past experience is not enough and recruiters must take a much more holistic approach and be more conscious of their culture and values.

We know that a ‘plug and play’ approach, hiring a successful executive from one company and dropping them into another, is not a guaranteed recipe for success and can even be disastrous.
A cost-cutter from one organisation may not be right to lead another through a growth phase.

The first step is for individuals at the top to recognise that change is valuable and essential, not for its own sake but to give a competitive edge.

Unfreezing the culture of inertia is a gradual process, but when enough people in an organisation want to do it there is a collective lightbulb moment and a tipping point is reached where resistance to change drops away.

Adapt and thrive

A separate study by my colleagues at Heidrick & Struggles, called Accelerating Performance, shows that successful companies and leaders are able to adapt and pivot faster than their competitors by removing the factors that drag on change and harnessing those that drive progress.

Pharmaceuticals has traditionally drawn leaders from people with a sales and marketing background, often referred to those who ‘carried the bag’ earlier in their career, but I believe this needs to change. What we need is a blend of people with a variety of experience that might include public affairs, market access and experience in sales.

I also question whether the reliance on international experience, which is such a feature of the industry in the UK, is good for diversity because it is an avenue that many women find difficult to negotiate if they have a young family.

The industry’s seemingly constant rotation of people in senior roles may have benefits, but we should recognise that it can lead to a lack of continuity and a sense of disruption among staff.

The established business model is not equipping the leaders of the future with the skills they will need to negotiate this fast-changing and ever more complex landscape.

We need to boost the metabolic rate of the industry and the companies and the teams within them, and the best way of doing that is to build a more diverse culture where creativity and innovation can prosper.

Article by
Dr Niren Thanky

is a partner in the global healthcare and life science practice at Heidrick & Struggles in London

27th October 2017

Article by
Dr Niren Thanky

is a partner in the global healthcare and life science practice at Heidrick & Struggles in London

27th October 2017

From: Sales



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