True Grit: Why Pharma’s Leaders Aren’t Yet Capable
Faced with an ever-challenging commercial environment, how do upcoming pharma leaders stack up when it comes to critical leadership capabilities and how can they be nurtured to achieve success?
“The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strived valiantly; who errs, who comes again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly” - Ted Roosevelt
Leadership in all its guises is a demanding and challenging role to take on, and with globalization, increasing complexity, the velocity of change, and increasing expectations from an empowered consumer, the role is fraught with unprecedented challenges. One of the most crucial questions facing the industry, though, is what leadership skills companies will require to navigate this landscape – and how do current pharmaceutical leaders stack up? Not very well, apparently.
Lead v Manage
According to Fred Schaebsdau, Head of Global Strategy and Business Development at Roche, even though we believe we understand the difference, too often we are still confusing management skills with leadership. “A leader is always at the forefront, showing the way, blazing a trail and setting the course for others to follow. A manager, in contrast, is someone who succeeds in accomplishing a task, sometimes despite difficulty and hardship. The main difference is that leaders have people follow them while managers have people who work for them.”
So why is this of particular importance now? “The difference between the two roles is profound: To lead in the 21st century necessitates much more, including the ability to make tough decisions decisively (e.g. whether to divest or acquire), the ability to adapt to change (e.g. moving from a rapid growth market to market stagnation in mature markets), the ability to look across the entire value chain – from R&D to operations, to sales and marketing and observe patterns and trends and draw conclusions from that. This necessitates a specific skillset that is often not fostered in in-house leadership programs with the result that managers don’t transition well into leaders. Often, we reward successful managers with leadership positions that they are ill-equipped to deal with because they haven’t had their metal hardened by adversity. The distinction between a manager and a leader is also about risk. Leaders are concerned with fulfilling their vision and expect barriers that will need to be surmounted. Real leaders command a group of people who want to follow you, not because they have to, but because they believe in you. They believe in what you’re doing and where you’re going and they want to be a part of it”.
Great leaders are lauded for their successes. But, paradoxically, what makes good leaders great are the trials and tribulations of failure. Very often, the lessons learned from confronting fear and uncertainty - and from experiencing frustration - transform good leaders into great ones. Today, leaders who have endured adversity are most likely to be the ones with the emotional resilience and resolve to succeed. This is not exclusive to pharma: “The best developer of a leader is failure,” says Richard Branson. However, modern organizational life exists to celebrate success and deny failure – no one ever notes a significant setback or mistake on their résumé. Yet, it is precisely these experiences that are necessary to create a remarkable leader.
The ability to bounce back after failure, to continue along a path and persevere against the odds, to take decisive corrective action when you feel you are off course and take risks and have the courage to make the tough decisions – these are skills that are required to become an accomplished leader and these are all skills that are honed through adversity and experiencing failure and setbacks – whether personal or professional. Would you have faith in someone who has never experienced adversity? Would you follow them?"
The Leadership Deficit
The demand for quality leadership is expected to far outpace the supply in the coming years. And that means organizations are facing a leadership succession challenge bigger than ever before. Last year, the pharma industry topped PWC’s ‘talent challenge’ poll with 51% of respondents reporting it was becoming more difficult to attract and hire the right people. Many feel that inefficient recruitment strategies and the lack of real forward planning are behind the shortage.
To make matters worse, professionals considered emerging leaders account for only 8% to 10% of the current talent pool. Pharma organizations will need to perfect the art of identifying high-potential employees earlier and grooming them for key leadership roles.
We have identified 5 potential derailment factors for pharma executives on the path to leadership:
1) No experience of adversity
According to Schaebsdau, “Many of the home-grown managers who have come up within the ranks of the organization don’t necessarily transform into good leaders as they haven’t experienced adversity and therefore have not honed the emotional resilience required to make tough decisions and react under intense pressure and time constraints. Sometimes you can learn great leadership lessons from failure. Standing up after each set back helps you to foster grit and stamina within yourself and the teams you lead. To me, adversity is what creates a strong leader. The ability to bounce back after failure, to continue along a path and persevere against the odds, to take decisive corrective action when you feel you are off course and take risks and have the courage to make the tough decisions – these are skills that are required to become an accomplished leader and these are all skills that are honed through adversity and experiencing failure and setbacks – whether personal or professional. Would you have faith in someone who has never experienced adversity? Would you follow them?"
Business history is full of examples of leaders who experienced crushing adversity at the peak of their careers, learned from their failures and bounced back to become more successful than before. After Steve Jobs was fired from Apple, he returned to his entrepreneurial roots and re-emerged at Pixar, where he created new products with new technology. When he came back to Apple, he had a new view of the market; with products like the iPod, he redefined the industry.
2) Too narrow functional orientation
Having blinkered exposure is a characteristic often found in leaders who have risen up the ranks through sales, research or some other functional “silo.” These individuals may struggle when asked to take on a more general leadership role. “I liken it to a T-structure, requiring broad skills (along the T) and one or two areas of specialism (the horizontal part of the T) such as sales or operations experience. But to fulfil the promise of a leader’s potential, it is critical to have developmental assignments that broaden experience", states Schaebsdau.
3) Inability to Make Decisions
“In my experience, many of today’s up and coming leaders fall down on this key trait – the ability to make informed decisions quickly based on the information at hand. They can be risk-adverse and over-analyze. Nothing is more revealing about the leadership and the future of an organization than how decisions are made. One of the most fundamental responsibilities of top management is to align the organization, get everyone moving in the right direction and taking decisive action when you steer off course. Leaders who lack decisiveness erode everyone’s confidence in their ability. It’s about self-confidence and trusting your gut instincts”.
4) Inability to Transition from High Growth to Market Stagnation
“The current leaders have come up through a hierarchy of growth. When you have stagnation and contraction, you need a vastly different focus and skillset. If you look at someone’s career, if it’s always been on an upward trajectory, have they ever been really challenged? Have they ever had to overcome obstacles and bounce back from failure, dusting themselves off and continuing on having gained those valuable learnings? Can you trust that they will know what to do when they are faced with a seemingly insurmountable challenge?”
5) Limited Cross-Cultural Experience
“Exposure to different cultures brings with it huge learnings. Hiring decisions should factor in the diversity and adversity each candidate has experienced, along with exploring how or whether they have helped him change or grow”.
Research has shown that self- and organisation-initiated cultural experiences contribute greatly to global leadership effectiveness, but self-initiated experiences have a more meaningful benefit to leaders. In particular, non-work cultural experiences are associated with cultural flexibility and tolerance to ambiguity, including reduced ‘ethno-centrism’.
Fostering Leaders: The Organization as Facilitator
How can organizations facilitate leadership development and foster the capabilities required to succeed in the 21st century business environment? We offer some suggestions:
1) Broad Perspective: Organizations can broaden leaders functional exposure by offering and encouraging "zigzag" career paths that feature lateral plus vertical movement.
2) Foster Decisiveness: To improve the decisiveness of your organization’s leaders, create processes to help managers obtain relevant information for decision making. Help managers take calculated risks that will demonstrate and reinforce their orientation to action. Develop criteria and a process for decision making and clarify responsibilities.
3) Don’t allow success or failure to define leadership development: In succession planning, performance reviews and other assessments, it’s tempting to make quick judgments about people based on their successes and failures. We’re not suggesting that anyone should discount performance but that more productive, open-ended conversations will factor in answers to deeper, more probing questions such as these: What did this person learn when he/she succeeded or failed? How has he/she changed because of the experience?
4) Make every open position a leadership development opportunity.
Currently, companies are focusing on experience as the best developer of people. While the recognition that leadership development must take place outside the classroom is positive, many companies simply give people jobs and let them sink or swim. We’re suggesting that they provide support and guidance to those entering these passages in the following ways:
- Offer regular 360-degree feedback (your boss, your direct reports, and your peers give you feedback on what are your strengths and weaknesses)and talks with supervisors to express concerns, ask questions and monitor progress.
- Encourage reflection around new experiences.
- Challenge people to take some risks; push them out of their comfort zones.
- Use coaching to help people talk and receive advice about issues they may not feel comfortable talking to colleagues or bosses about.
Transforming Leaders to Be Transformational
The rules of the global game are different as new competitors from developing economies emerge and challenge traditional business models. And the rules are changing for leaders as well. Increasingly, homogenous management teams made up of individuals who have spent their entire career at corporate headquarters will no longer be fit for purpose. Instead, companies need to ensure that management teams comprise individuals from diverse backgrounds and different ages, races and gender, who have experience of both fast- and slow-growth markets. A complex, globalized economy demands diverse, complex talents. The diversity of someone’s path can add incredible value and perspective to their problem-solving abilities and innovative thought.
The lack of pharma leaders ready to take on global roles in emerging and expanding markets indicates that Global Leadership Development Programs are deficient. Talent will only get us so far. What’s harder is funnelling potential leaders through the organization in a way that challenges, tests, channels, and changes them to make them viable and valuable in the real world. In order to cross the chasm from insight to profitable business, every promising leader has to go through an arduous and bruising process of exposure to the real world: those that make it are inevitably transformed by the process. Truly global leaders need the emotional intelligence and the mettle to take action, especially when what has to be transformed is precisely what made them successful in the past.
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