Today’s pharma industry is suffering a crisis of trust, say Bart Sayle and Nick Hawker, The Breakthrough Group. They discuss creating a culture of trust and breakthrough in the industry.
Pharma is grappling with a variety of issues that are affecting the industry’s performance and value and require an adjustment to the traditional business model. To thrive in this new environment top leaders will not only have to develop innovative patient-centered models, they will also need to achieve enterprise-wide culture change and facilitate breakthrough innovation.
According to PWC’s Report ‘From Vision to Decision Pharma 2020’, the pharma industry faces three fundamental challenges.
First, rising customer expectations as payers are imposing new cost constraints on providers and are scrutinising the value of medicines more carefully.
Secondly, low scientific productivity. Pharma’s output has flat lined for the past decade.
And thirdly, cultural sclerosis. The prevailing management culture, mental models and strategies on which the industry relies are the same ones it’s traditionally relied on, even though they’ve been eclipsed by new ways of doing business.
Against this background, the results of a recently published article from PatientView Quarterly cannot be a surprise. Only 34% of patient group respondents gave pharma a “good” or “excellent” rating.
So what can the industry’s senior figures do to rebuild public trust and build healthy, innovative, high-performing companies to successfully meet pharma’s fundamental challenges of the future? They would be well advised to start by focusing on their culture.
According to 84% of the more than 2,200 global participants in the 2013 Culture and Change Management Survey by Booz & Company, culture is critically important to business success. However, less than half of participants saw their companies effectively managing culture, and more than half said a major cultural overhaul was needed. Interestingly,
Even more remarkable were the findings of Kotter and Heskett’s landmark study. It documented that companies managing their cultures well saw stock price increases of 901% versus 74% for the companies that did not.
Strong cultures don’t happen by accident or are only achievable by organisations with exceptional leaders or extraordinary products. What many companies don’t realise is that there are a number of practical ‘tools’ (concepts and techniques designed to change the way individuals think and act) and processes that are proven to increase both individuals and the company’s future success and levels of innovation and to build and sustain a strong customer-centric culture.
This year’s Global Innovation 1000 study shows that spending more on R&D is not what drives results in innovation. The most crucial factors are strategic alignment and a culture that supports innovation.
Companies with strong innovation cultures think innovatively in everything they do and are constantly searching for better or more effective ways of doing things. The optimal outcomes are achieved when each person in the organisation channels their creativity and actions toward: business growth, people development, an empowering and supportive culture and providing innovative tools and processes for effectiveness and executional excellence.
Strengthening customer focus and trust, accountability for results, teamwork, and a sense of urgency along with instilling an entrepreneurial, winning spirit are the key to achieving success.
An innovative culture cultivates engagement, enthusiasm, challenges people to take risks in a safe environment, fosters learning and encourages independent thinking.
Former Lilly executive Bernard Munos has analysed industry data to ascertain which pharma R&D operations have been most productive, and why. His analysis confirms Novartis has been one of the best performers over the last 15 years, and he believes that the company’s leadership and culture were instrumental in this success.
“At Novartis we are driven by our mission of caring and curing. We strive to attract and retain talented associates who are passionate about improving patients’ lives," says Novartis’ current CEO Joseph Jimenez. "Believing in a higher purpose for the organisation builds strong associate engagement, and is critical to building a world-leading culture." He adds, “We try to foster a culture of innovation and creativity, and this includes how we continue to improve as a more responsible and sustainable company.”
Another leader who understands the impact of culture is Pascal Soriot who has overseen an increase in AstraZeneca’s share price by nearly 60% since he took over as chief executive. In his words "We have fostered a culture of innovation where science is at the heart of what we do.”
The upshot: A culture can make or kill a company. If, as a business leader, managing your culture isn’t already at the top of your priorities, it should be. Breakthrough discovery comes from a breakthrough culture. Getting the corporate culture right can transform businesses and unleash explosive breakthrough innovation and growth of the enterprise.