By Ben Locwin, Ph.D.
How often do you hear pharma companies (your company?) pride themselves with trite phrases like “our people are our differentiating factor.” Sounds good. Yet the reality in the trenches is far from this panacea — most industry talent reports refer to disgruntled staff who are poorly managed and organized into factions that are out for their own discrete success.
I’ve also heard quite a bit at some recent conferences about frustrations with performance management systems. This is feigned disenchantment with internal online systems for grading employees. It has become fashionable in the last few years to hear from companies (e.g., GE) that were ditching their performance management systems because of a lack of evidence of efficacy. But then ask these folks if they’ve eliminated employee performance management and ranking systems within their own organizations, and you’ll hear a number of synonyms for “no.”
Yet it’s entirely true: Forced- or stack-ranking or otherwise squeezing employees into a distribution for the sake of an annual performance review document is worthless at best and demoralizing and dehumanizing at worst. It also has no effect on, or correlation with, improvements in employee performance, development, retention, or any other meaningful human factor.
But aside from these procedural and organizational issues, let’s take a step back and ask the fundamental question:
“How does a company succeed or fail in a competitive market?”
The answer, my friends, is through that company’s talent (people).
I’ve spoken with recruiters and HR professionals, from associates and generalists to executives and chief talent development officers, and the resounding feedback is they feel less connected than they’d like to be with the business. There’s a pervading sense that because they often don’t have scientific experience, they’re just “filling positions.” But nothing could be further from the truth. I’ve found that who is in what role builds the personality of the company and is the premiere factor differentiating the business from its competitors.
Employees Aren’t Just Requisitions
It has been clear to me for a number of years that the key differentiator in the future success or failure of my strategic initiatives is having access to the best people for the tasks at hand. When I’ve had recruiters and HR experts work for me to find the right talent, it is a force-multiplier. I certainly cannot achieve success on my own; it’s always through a team. A great plan, unexecuted, is only paper.
The execution of work is what matters. Therapeutic molecules don’t discover themselves — it takes great people. Study protocols don’t develop and write themselves — it takes great people. Commercializing a molecule and marketing it to get it to patients doesn’t happen by itself — it takes, you guessed it, great people.
When I advise organizations about the psychological dynamics of group behavior, I try to stress that when we work with, or consider, individuals, it elicits a very personal (i.e., human) response. When we participate in large groups or look at an impersonal Excel list of full-time equivalents (i.e., to be restructured) or talk to a full room, we tend not to perceive or empathize with individuals and instead perceive it as a collective. This can have profound psychological consequences, as well as resultant consequences on how we treat people.
Do you view your employees as individuals or as a collective?
Sometimes the difference between success or failure is measured by inches or centimeters (or less). This is important, because it’s not to say you can’t fail with great talent — you can.
But you can’t succeed in the long-term without great talent.* Those small differences between the success or failure of developing a molecule; between a clinical trial being successful or a failure; between inspections producing favorable or unfavorable results — they accrue over time to very subtly (or sometimes quite dramatically) tip the balance in favor of your organization.
On Randomness, Clinical Trials, and People Within Your Organization
This aggregation of subtle differences building up from initial conditions can be modeled using certain patterns of chaos theory, like:
From business-as-usual to total chaos
In a nutshell, you have a starting point (initial conditions, the left side of the plot above): your particular therapeutic technology, delivery modality, manufacturing process, or whatever. Then as your business encounters innumerable minutiae along the way (a breakthrough idea of a team member, problem solving in development or manufacturing that makes an otherwise likely failure transform into a batch success), your path toward future success or failure continues to diverge into these various nodes (right side of plot). Success is determined by these microdecisions and macrodecisions executed properly over time.
You may have now come to realize that with this much noise in the system, it’s possible that subpar (stupid) decisions and actions could still lead to successful outcomes, and that’s true. The difference, as I mentioned earlier, is the long-term view. The right molecule in development at the right time, the right regulatory inspectors, and the right market conditions interested in uptake of a new treatment could all conspire to lead to success even given a well-below-average team of anti-talent. W. Edwards Deming observed, “A bad system will defeat a good person, every time.” Here is this statement’s counterpoint: An impossibly good set of initial conditions could lead to success, regardless of incompetence. But that’s commensurately rare. Monkeys at typewriters can produce all the works of Shakespeare on a long-enough time horizon, as the saying goes.**
The clinical trial analogy is this: We need two successful clinical trials to gain FDA approval for a new drug therapy, but as with the above, it’s certainly possible to game the statistics and get two successful clinical trials by random chance if you run enough clinical trials. Should you be in a company that’s in the financial position to run, let’s say, 40 clinical trials for the same treatment, you’re encroaching on a near-certainty that two out of 40 trials will randomly demonstrate success against placebo (assuming an a priori a of .05). And, of course, it might not take that many trials to cross this threshold.
Scoping the right talent for the right roles at the right time sets the stage for a higher likelihood of success across many elements in the business. Where you’re potentially at risk for something going wrong, the right expertise might be able to prevent that failure. What you’re doing is delicately and artfully loading the corporate dice to more likely produce a desired outcome.
And the point is this: Across a number of potential input variables, talented employees provide a systematically greater return to a company than any new technology, initiative, or contract. Companies with evidence-based, progressive talent management strategies tend to have higher return on sales, investments, assets, and equity.
How To Get Better At Leading, Managing, And Excelling With Smart People
My top four pro tips for sourcing and developing teams that outperform and who get along!
A recent review suggested companies with strong ethics and compliance programs outperformed the S&P 500 by almost four times. Don’t mistake the causality here. It’s not the fact that there’s the process or tools of a compliance program in place causing good outcomes, but rather a good ethics and compliance program is indicative of having good internal business practices. And who makes these practices and processes work? People.
Do the work I’ve described above on people relationships better than it’s ever been done in your organization — unless you think your company just can’t get any better at it. Over time, you’ll recognize work is getting accomplished much more effectively, morale is boosted, and these effects elicit a virtuous cycle. Your employees, patients, shareholders, and bottom line will thank me.
*Lou Holtz, former Notre Dame head football coach: “You’ve got to have great athletes to win, I don’t care who the coach is. You can’t win without good athletes, but you can lose with them.”
** The probability of a monkey typing “banana” by randomly pressing keys on a 50-character keyboard is: (1/50) × (1/50) × (1/50) × (1/50) × (1/50) × (1/50) = (1/50)^6 = 1/15,625,000,000, less than one in 15 billion, but not zero, hence a possible outcome.
About The Author:
Ben Locwin, Ph.D., MBA, M.S., is a pharma executive and a member of several advisory boards and boards of directors across the industry and was the former president of a healthcare and pharma consulting organization. He created many of the frameworks for risk management currently in use within the industry and has worked across the drug life cycle from early phase to commercial manufacturing and marketing (GLP, GCP, GVP, GMP). He frequently keynotes events and conferences on these current topics. Connect with him on LinkedIn and follow him on Twitter.