Frozen or Mighty Middle Management – the chilled pill for Pharma to swallow…

The Chief Executive of Valeant, the Canadian based speciality drugmaker recently commented that ‘the pharmaceutical industry is stuck in the 1980’s 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 is longer and longer.

Pharma 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. Valeant themselves are trying to snap up Allergen, the maker of Botox for $53bn.

Market pressures and rapid change is having a marked effect on the management of Pharma companies, with three key issues: 

• Talent shortages are putting more pressure on middle management to perform and deliver results. In 2013, Pharma topped a ‘talent challenge’ poll with 51% of respondents reporting it was becoming more difficult to attract and hire the right people.
• 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.
• Pharma companies are missing a trick. Much of the talent Pharms needs already resides inside their organisation – trapped all too often in the ‘frozen middle’. Companies, led by the Board, need to pay more attention to unlocking the capacity that they are already sitting on within the layers of their middle management.
• Driving Innovation. Pharma is looking to innovate, challenge the status quo, and collaborate across all the different elements of the industry, but the pathway to this happening is inspiring and unleashing the middle layers of the business, but few leaders have the skills to do this.

This comment piece, will discuss the impact that the above issues are having on the industry, their boards and management, but also identify how a change in mindset could lead to management breakthroughs, as well as drug ones.