Does your boss show angelic or demonic qualities whilst at work? Naysan Firoozmand discusses what attributes distinguish a good and bad boss in the pharmaceutical industry and the formula needed for success.

It comes as no real surprise that the pharmaceutical industry expects a high level of industry-specific skills from its key leaders. The employees of pharmaceutical businesses, like those of any organisation whose operational foundations are firmly rooted in the acquisition, management and development of technical knowledge, will tend to look for evidence of expertise as an attribute of current and future managers. Where intellectual property is king, it’s not surprising that the rest of ‘the royal court’ might display a preference for intellect over sentiment.

But this goes beyond simply operating in a culture where knowledge is mission critical. Embedded in the fundamental processes of the industry – research, development, testing and monitoring – there is also a culture in which it is expected that decisions are informed by evidence, as well as instinct, and with a real preference for the former. Pharmaceutical line and key account managers will be expected not just to have an impressive track record, but for their career trajectory to be documented and provable: their personal case for leadership is more likely to be clearly argued rather than debatable. 

Individuals often operate under an expectation that they will develop substantial professional standing through publication and presentations, with their output being reviewed and scrutinised by the peers. This is arguably a third instance of ‘evidence’ taking precedence: the individual’s standing is ‘proven’ by its being documented. The phrase “well, they’re so good at what they do, leadership seemed like the logical next step” is often heard. However, the implications of following this route to success are not always recognised. Only leaders that have the interests of the people they manage in mind have the ability to truly succeed and excel in the future.

Vision and strategy
The qualities that are readily admired in rising talents can often be out-of-step with those that the emerging leader’s followers are looking for. Indeed in its 2010 White Paper, The Leadership Challenge in the Pharmaceutical Sector, the Center for Creative Leadership identified ”having too narrow a functional orientation” as the greatest potential derailment factor for budding pharma executives.

While their own expertise and knowledge provide a shortcut to establishing trust within their organisations, technical knowledge is not all that is required of them. A successful leader needs to provide more: the ability to provide vision and strategy, the emotional intelligence to relate to others interpersonally and show a willingness to engage with them, and a desire to inspire achievement and attainment.

In the context of the pharmaceutical sector, they must also typically be able to communicate effectively and credibly with an audience that comprises highly intelligent and critical individuals working in various scientific, research and academic or supporting roles. Moreover, to do so requires them to effectively deploy emotional intelligence in an arena where intelligence and factual reasoning will often hold greater appeal than self- or social-awareness, never mind self- or relationship-management.

Overtaking manoeuvre
In an environment where recognition for individual performance is so frequently influenced by the evidencing of expertise, and in an industry that attracts many of its key talents as they are seeking opportunities for personal development within a specialism, ‘progress’ is too easy to relate to building an impressive personal portfolio. Pharma bosses that are truly ‘great’ are those who recognise that to achieve greatness they must enable others to surpass them, and do so by creating trust and putting their self-orientation and their own ego much further down their priority list. As Dame Anita Roddick once pointed out, “leaders should encourage the next generation not just to follow, but to overtake.”

Part of the key to success for excellent pharma managers is in two possible responses to this situation. Firstly, to ensure that the organisation’s senior leadership provides individuals with opportunities to develop their personal portfolios – as these can be key personal motivators. The second response is in identifying and voicing a common motivator and visions – a factor that binds individuals to the organisation and its vision rather than to the pursuit of individual goals. Within pharma, that common motivation is often the wish to do something of value to humanity – to combat disease, help people to survive and live positively with otherwise threatening or disabling medical conditions. It’s pharmaceuticals existence not as a pure but an applied science that provides this opportunity to establish common ground and shared vision.

For the organisation, the ability of its managers to build effective collaborative teams is a win-win situation: not only does this approach help to counter the potential for functional narrowness, but a multi-disciplinary approach to problem solving strengthens the R&D function that is so critical to an industry so profoundly rooted in problem-solving, applied research and intellectual property.

Above all however, the pharmaceutical expert-to-leader must recognise and embrace a new way of serving: where their role as expert affords them respect and authority as a source of knowledge. But in their role as leader they must earn respect and authority as a source of judgement and direction and a skilled guider of the application of the knowledge of others.

Naysan Firoozmand is a Managing Consultant at ASK Europe plc.

The switch to Key Account Management is one more companies are introducing to tackle current challenges. Apodi’s Tony Swift highlights the principles of effective execution and making a strategy work for a smooth transition.

More and more companies are now addressing the changing healthcare market by transitioning the sales process from one which primarily involves representatives engaging with healthcare practitioners on a ‘one-to-one’ basis, to the establishment of Key Account Management (KAM) teams.

The rationale for this change is irrefutable. Access to GPs is increasingly difficult and the ‘customer’ now represents a series of more complex accounts with numerous stakeholders and influencers. Furthermore, decision making is both at a national and regional level and there is now a greater need than ever to focus on local healthcare economy needs and requirements.

As a result, pharmaceutical companies have established, or are in the process of doing so, KAM teams in which individuals have increasing responsibility and autonomy in addressing the needs of their customers at a local level. Some pharmaceutical companies have even taken the model further and given team members, or a small collection of them in a specific locality, P&L responsibility – essentially establishing micro business units within the team itself.

 

A different approach

Some years ago it could have been argued that any company transitioning to the KAM model was differentiating itself from the competition. This argument is much more difficult today because most pharmaceutical companies have moved, or are moving this way – in short, almost everybody’s doing it.

However, there is still a key source of competitive advantage in this environment – and that is to actually make the new model succeed.

Our research, and the feedback we have received from companies trying to adopt the new model, is that the execution process is much more difficult than originally anticipated. The type of feedback we receive often includes the following observations:

• Account managers do not appear to be acting in any materially different way than the sales representatives of the past
• They are adopting the new model at vastly different rates with a small number leading the way and the rest struggling to come to terms with the new strategy
• The move to more local autonomy is creating confusion about the role of the centre and its interaction with the decentralised function.

 

Difficulty of execution

So why is it that so many companies are finding the execution process more difficult than anticipated? The primary reason is that there is often an underestimation of the scale of the organisational change required.

For instance, many sales functions in pharmaceutical companies have historically been based on a traditional command and control structure. Here, the sales management instructed sales representatives on which HCPs to target, how many times they should be called on and exactly what to say during any meeting with them.

Within the new model however, many of these individuals are now faced with adapting to a new environment where decentralisation, decision making, autonomy and P&L accountability are now among the order of the day. Given the above, managements’ task of transitioning the organisation from the old to the new model requires considerable skill, focus and expertise.

 

A decentralised approach

Many management commentators argue that decentralisation is a panacea for all ills. If executed effectively, in an appropriate environment, this structure can deliver enormous benefits to an organisation. However, the move towards decentralisation often creates a number of serious problems which, if not addressed directly and quickly, will significantly impact on performance.

These problems are as follows:

A lack of expertise: a decentralised structure almost always requires an increase in expertise in the key roles within the structure. For example, increased knowledge will be required by employees AND management to solve problems, address more complex customers and, in effect, run businesses – particularly if P&L account responsibility is part of the role.

Inertia: many employees enjoy going to work in an environment where they understand exactly what the day will bring; the common challenges they always face and, in exceptional circumstances, being able to refer any unusual problems to their line manager. In a new environment where their decision making authority is increased, many employees will be reluctant to do things differently and may continue behaving much as before.

Lack of responsibility: the new environment is a scary prospect for some people. The last thing they want is more responsibility and a fear of failure and an inability to work in the new way paralyses them – again leading to ineffective execution.

At Apodi we have looked at specific pharmaceutical companies that are struggling with the implementation of KAM teams and researched the reasons for their difficulties. In every single example, one or more of the problems outlined above was prevalent – and in most cases all three problems coexisted together.

In fact, some of our own executives have reported their own first-hand experiences of working with companies in which the almost evangelical zeal and enthusiasm of top management continued unabated whilst chaos reigned and they failed to achieve an effective transition.

 

The way forward

As we have seen, the execution process can be difficult. And because of this, it is critical that a clear procedure for managing an effective transition is implemented. This process needs to address the following:

1. Identify clearly the strategic intent of the company, including the projected benefits of changing the model and how these are to be measured

2. Given the strategy noted above, clearly identify the role of the centre and the role of the decentralised units and how these might evolve over time. In our view, companies are often too ambitious in managing the transfer of responsibilities from the centre to the divisions or KAMs. Clear standard operating procedures need to be driven from the centre in the early stages and KAMs need to understand the rules that they are expected to work to. Think carefully about giving newly formed KAM teams P&L account responsibility. It may be better to transition to this over time, and in some cases, not even to go this far

3. Identify very clearly the roles and responsibilities of management and KAMs at all stages in the change process

4. Given the roles identified in the new structure, carefully recruit the appropriate personnel. Implement a training and development programme focussed on areas such as the role of Key Account Management, the implementation of a complex sale, general business disciplines and other skills

5. Management need to quickly identify any KAM team member who cannot make the leap to the new world of working and deal with this appropriately

6. Instil best practices across the whole KAM team by establishing effective coordination and information sharing processes

7. Establish effective incentives to drive the performance required

8. Put in place appropriate controls, feedback, learning and corrective action processes to improve performance. Key to this is the management team that drives KAM performance. This team needs to be highly experienced and knowledgeable about the requirements of KAM teams and how to manage a change process.

 

Leading the way

As ever, the role of the leader is absolutely critical in driving through the changes to address the needs of the new healthcare economy. Whilst the development of a sound strategy is critical, it is also the relatively easy part of the process. In every pharma magazine, nearly all consultants and most competitors will support the notion of moving towards a KAM driven business.

However, it is the effective execution of this transition that the leader should focus on. They will also invariably experience many of the challenges that are common to such change programmes, such as internal politics, resistance to the new way of operating, lack of appropriate skills within the team and so forth.

It is because of this that a leader needs to draw on commonsense business disciplines to be successful. It is also crucial that the immediate management team are able to do the same. Therefore, before embarking on the process, it is important to make sure that the management team is capable and ready to execute change.

As I noted at the beginning of this article, many companies are implementing similar strategies. It is therefore logical to assume that, everything else being equal, it is the company that has the management capabilities to execute these changes most effectively that will gain a competitive advantage over its competitors.

 

Tony Swift is the Managing Director of Apodi. He may be reached on tony.swift@apodi.co.uk.