The Pharma Leadership Challenge: Thawing the “Frozen” Middle Managers

The challenge for senior leadership is to enable the layers of middle management to work to their full potential. Mike Straw argues that ‘failing fast’ should become the new mantra if pharma is going to drive greater innovation and creativity.

J. Michael Pearson, CEO of Valeant, the Canadian based speciality drugmaker, recently said that “the pharmaceutical industry is stuck in the 1980s with big bureaucratic R&D functions that produce little value”. At the same time, the industry is under huge pressure as old cash cows are dying off, new breakthrough drugs are few and far between, and time to market gets longer and longer.

As an industry, pharma is having to cut back in ways they would not have imagined just a decade ago. The industry has also seen a wave of mergers turning into a tsunami, with more than $100bn in deals either announced or rumoured in just one week earlier this year. Valeant themselves are trying to snap up Allergen, the maker of Botox, for $53bn.

Such market turbulence, combined with cost pressures, means that pharma companies desperately need to get the most out of their highly skilled and talented people.

But, because of these very forces, the workforce is under pressure to work in ways they have not had to before.  Whereas pharma used to be an arena in which science was prized above everything else, now with a shift to cost cutting and the maximizing of ROI, the climate is very different.

The drug development process has always been extremely rigorous, with strict protocols to be followed. The emphasis has always been on not failing. So scientists will do everything they can to eliminate the risk of failure.  But in today’s climate, when they are being asked to be more creative and innovative - to do things faster - they need to learn the culture of “failing fast”. It’s a whole new challenge and a new way of thinking.

In terms of people, there are two key issues that pharma companies are wrestling with. First, talent shortages are putting more pressure on middle management to perform and deliver results. In 2013, pharma topped a ‘talent challenge’ poll with 51 per cent of respondents reporting it was becoming more difficult to attract and hire the right people. This is exacerbated by changing attitudes to work: decreasing levels of loyalty, greater career mobility, and the much more short-term attitude of Generation Y talent.

Second, middle managers are reluctant to take risks as they are constantly adapting to change rather than driving it, and capitalising on it. Last month, it was reported that a lack of risk appetite is undermining European life sciences.  This at a time when they most need to successfully take risks.

Despite these two issues, boards and senior management within pharma companies are missing a trick. The talent they need is all around them - they need to unlock it from what I call the ‘frozen’ or mighty middle. The task for senior leadership is to find ways to enable the layers of their middle management to work to their full potential – and indeed to reach new heights of productivity.

How can they do this?  In my experience, there are four key steps:

• Retrain the senior leadership and middle management on what they believe it is possible to accomplish. By raising their aspirations and inspiring them to be bolder, a new mind-set can start to be born.

• Help them blow up conventional wisdom and assumptions. By encouraging open discussion, in which anything can be challenged, the middle layers can start to look with fresh eyes at new ways of working.

• Help them see that they can be accountable for delivering on things that are missing and essential. By giving them a sense of empowerment to change things, they will feel a new level of engagement and commitment to the business.

• Open conversations about the future they want to build. Encourage discussion of the place everyone wants to get to and help to create the future they want.

This is not something that can happen overnight and it is not straightforward. It takes genuine commitment and an investment of time and energy. It requires much of senior leadership. They must be as committed to the process as anyone, and it requires them to believe that what they are really there for is to unblock potential and creativity - rather than simply to control and manage.

If senior leadership can create the right environment, they could be genuinely astonished at the results they can achieve by unlocking the potential of their mighty middle. They can create an environment characterised by genuine innovation, the constant and productive challenging of the status quo, and collaborations across all the different elements of the pharma pathway.

In a corporate world that is more unpredictable than ever, the pharma companies that are agile and super-responsive, powered by an inspired middle management layer, will be the successful organizations of the future.

Mike Straw is CEO of Achieve Breakthrough, a business- and people-performance consultancy based in Bath, UK.