The BioPharma industry is in the midst of disruptive renewal. Executives and managers need to be Change Leaders. But leading change in BioPharma involves some additional challenges. Robert Thong highlights these challenges and suggests some key pointers for Change Leaders in pharmaphorum‘s leadership and talent management themed month.
BioPharma industry in midst of renewal – change leaders to the fore
The BioPharma industry is at a critical juncture in its evolution. “Innovating” a patent-protected molecule is no longer enough, we must demonstrate sustainable added value to the healthcare system i.e. real innovation that takes customer benefit to the next level. The Payer is now king and the Patient has an increasingly louder voice. At the same time, R&D productivity has been declining for many years despite huge investments by the industry.
But opportunities also abound! The Baby Boomer generation has become the well-informed chronic illness generation. Rapid growth in emerging economies is driving spending power and chronic disease incidence. Continuing technological advances provide better diagnostic and treatment possibilities. Open Innovation is no longer a buzzword but a rapidly-evolving reality.
BioPharma companies are renewing their business models for this new world. Being a Change Leader is now a critical and in-demand skill in BioPharma. As a starting point, BioPharma Change Leaders can draw many lessons from the classic change management literature (for example Kotter’s frequently-quoted Harvard Business Review article). Increasingly however, the classic approach on its own is not enough for BioPharma today, especially bearing in mind the “new paradigm” nature of the opportunities and problems that our industry now needs to address. So why is this the case?
What’s different today
Many of our industry’s historically successful change initiatives took place within established business models – ideal for leveraging benchmarking, best practices, gap analysis, metrics, process re-engineering and many other classic tools for change. However we have now entered an age where we have to re-invent our traditional paradigms in R&D, Commercial and Supply Chain. Such opportunities and challenges have no “standard” solutions; more than likely, each organization will have to derive its own bespoke solutions based on its unique combination of capabilities, assets, market situation and culture.
In the new BioPharma world, the greatest performance improvements are often needed where teams of scientists and professionals from multiple disciplines collaborate to solve complex problems with no pre-defined solutions. To develop and implement the new business models needed, these “knowledge workers” have to synthesize their expertise across disciplines, engage external constituencies (partner companies, suppliers, payers, patient advocacy groups) and apply judgment in their teams to create integrated solutions. Superior performance and eventually improved business outcomes are thus the direct result of creative thinking, internal cross-disciplinary teamwork and insightful interactions with external constituencies. Hence the key to making sustainable high impact change in BioPharma is to lead change effectively with knowledge workers, bearing in mind their unique characteristics.
Leading change with biopharma knowledge workers
Change Leaders need to bear five key principles in mind when designing and leading strategic change efforts with BioPharma knowledge workers:
(1) Communicate an inspiring purpose and change rationale
Knowledge workers need to know the broader significance and implications of their work. They perform best when they feel a sense of ownership for their organization’s mission and strategy, and how their work contributes to it. They often need a higher purpose than just conventional business goals. “Increasing shareholder value” will often not cut ice with them as the key underlying aim. Nor will typical “burning platform” threats like an impending patent cliff. Such messages might trigger short-term cost savings, but they will not motivate knowledge workers in the medium-to-long term to change how they invent new products, secure market access and increase product uptake after launch.
(2) Frame the right challenges
Most major change efforts are broken down into several manageable initiatives, each with a clearly defined strategic challenge. Change leaders should beware of some classic pitfalls when defining these challenges and setting up their corresponding initiatives e.g. separating initiatives by department or scientific function, or by type of financial impact (grow revenue, reduce cost, increase asset value), or by business discipline (“strategy”, “operations”, “HR”). The real world’s problems and opportunities do not come nicely packaged like this. The best solutions often arise from creativity at the intersections of how people normally see things. Change leaders should focus on those cross-functional processes where most value is generated. They should emphasize effectiveness and new value creation, not just efficiency. And each initiative should combine “strategy”, “people” and “process” aspects. Knowledge workers thrive on challenge and mastery – we need not be afraid to set them a tough problem!
(3) Empower the organization to find its own solutions
Knowledge workers value their autonomy and need to have a significant say in what they do and especially how they do it. They are demotivated by seeing their work reduced to a series of checklists, boxes and arrows. And attempts to micro-manage or re-engineer the details of how they work are often counter-productive. They need to be genuinely and heavily involved in defining the solutions. Beware of a top-down process which prescribes solutions for them!
(4) Form the right diverse teams, leveraging the middle of the organization
Tackling each specific strategic challenge requires a carefully-selected team with the appropriate diversity of ingredients (perspectives, skills, knowledge, external networks) that combined, will lead to a superior outcome. Change leaders should beware of assembling a team just around the obvious senior problem owners, experts and representative political constituencies. It is also important to engage especially the middle managers and the mid-career scientists who have energy and fresh ideas.
(5) Manage co-creative collaboration in the teams
To maximize the potential from the teams, it is necessary to engender and manage synergetic interactions between the team members that lead to solutions which are “more than the sum of the parts”. This means that team members not only contribute what they know and can do individually, but also push each other’s thinking, working at the intersections of each other’s know-how, to “co-create” superior solutions together. This approach is more likely to generate innovative differentiated solutions that enable sustainable competitive advantage.
Leading change with knowledge workers is tricky. Their motivation, engagement and commitment matter immensely for superior performance – value is generated from their creativity, energy and teamwork. Much thought thus needs to be given to how to involve them and keep them energized and engaged throughout the change process.
This article was originally published in Pharmaphorum.