WHAT IMPACTS LEADERSHIP EFFECTIVENESS IN THE PHARMACEUTICAL INDUSTRY?
The role of the leader has never been as important or demanding as it is today in the pharmaceutical/biotech industry. Many companies have begun to re-engineer R&D and commercialization strategies in response the threat of fewer viable molecules and drained sales from generic erosion, and leaders at all levels are faced with the challenge of delivering consistent, sustainable results in leaner organizations. To succeed, leaders must ensure that the right people with the right skills are in the right roles. In this environment, an understanding of which competencies make the difference in a leader's effectiveness can help pharmaceutical/biotech organizations prioritize their talent management efforts to ensure the greatest return on investment. To shed light on this, in partnership with the American Management Association, I collected data on the effectiveness of approximately 100 leaders in the pharmaceutical/biotech industry.
Which Competencies Set Apart the Most Effective Pharmaceutical/Biotech Leaders?
Of 46 competencies, five emerged as the factors that differentiate the most effective leaders in pharmaceuticals/biotech. The results suggest that these leaders are able to balance execution-oriented behaviors with the interpersonal skills required to build strong relationships. The five competencies include:
- Action orientation (e.g., maintaining a sense of urgency, acting decisively to implement solutions and resolve crises, persevering in the face of adversity or opposition, and translating ideas into action)
- Quality orientation (e.g. , encouraging others to suggest improvements to work processes; providing a focus on quality as well as results)
- Flexibility and agility (e.g., adjusting one's behavior to changing circumstances, remaining open to new ways of doing things, working effectively in an unstructured or dynamic environment)
- Managing people for performance (e.g., setting clear performance goals, providing direct reports with specific feedback and coaching on a regular basis, and addressing performance problems in a fair and consistent manner)
- Building trust and demonstrating personal accountability (e.g., keeping promises and honoring commitments, accepting responsibility for one's actions, communicating honestly)
We also wanted to understand what sets apart pharmaceutical/biotech leaders who are exceptional in their current roles and are seen as having potential for more challenging roles from exceptional leaders who are not perceived as having potential. We found that four competencies differentiated these managers:
- Of the four differentiators, two had the greatest impact on the perception of potential-building trust and personal accountability and managing people for performance. These competencies were also identified as differentiators of top performing leaders, which further emphasizes the need for pharmaceutical/biotech leaders to master these areas.
- The other two competencies were self development (e.g., seeking feedback about one's strengths and weaknesses; keeping up to date in one's knowledge and skills; and learning from successes and failures) and resilience and stress tolerance (e.g., continuing to perform effectively when faced with time pressures, adversity, or disappointment, and bouncing back from failures or disappointments).
The Bottom Line
While there is clearly no silver bullet to effective leadership, our study offers some insight into the competencies that set apart the best from the rest. The competencies that set apart exceptional pharmaceutical/biotech leaders reinforce the idea that leaders must be able to balance execution with the interpersonal side of leadership. It also appears that failureto master these skills early in one's career may be a top derailer for a leader in today's challenging business environment.