At a meeting at DIA in Boston yesterday, Mike Svinte, President of Global Life Sciences at IBM provided a sneak peek and insights into a new report probing CEO challenges and concerns and their implications. The report, which is due to be released next month, will distill interviews with more than 1,100 CEOs from around the world, 40 of them heading life sciences companies, including mid-sized companies, in North America, Europe and Asia. Not that their individual names can or will be disclosed, but the CEO’s appeared very willing to engage in open dialogue and creative discussion of issues. "The interviews were a bit like therapy for some,” Svinte said.
Nearly a quarter of the life sciences CEOs interviewed admit that they have had no, or only minimal success at managing change within their organizations. At the same time, IBM analysts found, they are hungry for change. The study suggests that CEOs need to “seed” their organizations with challenges and to gain inspiration by examples from other industries that have already undergone transformation. They will then need to convince their companies that change is necessary, and cultivate enthusiasm for it
IBM’s research shows that life sciences companies’ financial performance tends to be better when CEOs encourage change and invest in new areas, Svinte said. The questions are where to invest and why, and how will pharma’s industry model and business model need to change for the future. Will pharma companies be the "dinosaurs" predicted years ago---holding companies that outsource all key functions?
Not enough CEO’s have actively wrestled with these questions, the survey suggests.
Talent shortages top the list of their concerns---63% of pharma CEOs named this the major problem (compared with 48% in other industries. Regulatory issues, as one might expect, came in second (53% vs. 45% for other industries).
One factor driving change, CEO respondents say, is a better informed consumer, who demands more as he or she pays more."We’re experiencing increased pressure related to environmental initiatives,” wrote one anonymous CEO from
North America.“Transparency is being driven by the government as well as by consumers. There is great risk in not focusing on rising consumer expectations."
As pharma moves from the old multinational model to a globally integrated one, Svinte said, issues of global regulation, intellectual property protection and talent shortages in India, China and other regions of the world may pose risk but more CEO's say they are investing there.
Three quarters of pharma CEOs are pursuing innovations in business models. More than half are focused on enterprise model innovation or reconfiguring the breakdown between what work is done inhouse and what is outsourced. Only 17% were focused on new industry model innovations, including those that will involve diagnostics and targeted or personalized medicine, and will require new revenue and enterprise models. Among blue sky possibilities discussed was the concept of consumers paying for a therapy only if it worked. (Ha! Don’t hold your breath waiting for this to happen – brief editorial interjection)
62% of the life sciences CEOs surveyed also see rising expectations of corporate social responsibility as a positive, rather than a negative one. But nearly a quarter of respondents don’t expect such work to have any impact on their corporate bottom lines. IBM analysts suspect that new dimensions of corporate responsibility may not yet have reached pharma CEOs’ radar screens.Pharma CEO’s may recognize the drug industry’s duty to “do no harm,” but they may not be able to measure the footprint that pharma has on society, analysts suggest, pointing to the issue of drug residues in the world’s municipal water supplies.
Knowledge management and the drive to turn data into information are becoming more important to a growing number of CEOs, the study found, since these establish a framework for more collaboration and cross-functional product development.
Manufacturing and supply chain management are becoming a priority for more CEO’s, Svinte said, although they were not probed in depth, by themselves, in this survey.
Among other subjects that came up at this discussion was IBM’s patient-centered healthcare project,
Also talked about was the MidEast Consortium on Infectious Diseases, a program underway in the
Middle East that is using supercomputers to predict future pandemics and the potential impact of changes within patient population.
Look for more detailed reporting on the research and trends in future issues of our magazine and online.
And now for something completely different (for any opera fans or Italophiles out there).
From 'On Pharma'