You must be the change you wish to see in the world. – Mahatma Gandhi
Change leaders are not risk-takers, but opportunity shapers. And in Asia today, there is no shortage of opportunities.
Take the pharmaceutical industry as a case study. It is truly a time of opportunity, and as Mark Trudeau, President of Bristol-Myers Squibb’s Asia-Pacific arm, observes:
It is the opportunity to bring more modern medicine to a population whose medical needs are largely unmet. Much of what is available in this region is the same as what was available more than twenty years ago. With innovation and the opportunity to treat the types of diseases that are more prevalent in Asia, there is a real opportunity to make a difference to the lives of people.1
It is also a time of challenge, and leaders in this or any industry cannot stand still. Restricted access to markets in Asia, highly cut-throat competition, rising health care costs, demand for more innovative products and clamor for better service-providers and services all bring great challenges. “More tsunamis will come,” one leader has warned.
To stay in place will only lead to stagnation. The status quo will not last long, and today’s managers must lead the change to meet the changing pharmaceutical needs of Asia.
Jay Chang, International Vice President of Johnson & Johnson (Asia-Pacific), acknowledges this challenge. “Today, however, with fierce competition and growing government constraints, it is a lot harder for a company to prosper and be at the forefront of the industry,” he says.2
The tasks of the change leader
Today’s pharmaceutical industry is highly complex. This is marked by:
- More stringent regulations, and greater controls and constraints on spending and pricing
- More rigorous clinical trial requirements
- Possibly most of all, increasing demands by both corporate clients and patients.
Due to the tension between the need for affordability on one end, and revenue on the other, government leaders can sometimes see pharmaceutical companies as foes rather than friends in pursuing affordable health care for their populace.
As we consider the turbulent sea of the pharmaceutical industry, the late Peter Drucker’s ‘four critical tasks of the Change Leader’ in this new economy come to mind.
Systematic abandonment of the obsolescent and obsolete, the unsuccessful and the already attained
Wise leaders watch the times and tides of their product life spans like hawks.
Many companies have met their demise because their leaders were not prepared to face up to the reality that their products or services were obsolete. We need to know what to discard.
Wise leaders watch the times and tides of their product life spans like hawks. They have to anticipate their shelf lives and make adjustments quickly and appropriately. Sentimental attachment to products has killed some organizations, such as Kodak.
Wise leaders keep pace with the changing environmental needs and growing competition (be it in price, product, or process). The slowness to disband can catch many leaders unaware. Pharmaceutical leaders need to have strategic knowledge of their industry and the changing environment.
Alan Taylor, Regional President of Pfizer, was right when he said, “… an in-depth knowledge about your industry, your company, and the products leads to confidence and enjoyment in your job and that in turn is reflected in the success of the company.”3 Taylor’s push for staff to keep up with new knowledge has made Pfizer’s medical representatives consistently rated as the best in the industry by doctors.
The recent removal of patents for AIDS-related and heart-related drugs in Thailand is a case in point. In one fell swoop, profit and market share can be dramatically eroded. Unless leaders are cognizant of these turbulent tidal waves, it is hard to survive in the pharmaceutical industry.
Systematic and continual improvement
Leaders cannot rest on their past laurels. What has worked and been effective in the past may not work today. Today’s success is no guarantee for tomorrow’s. Also, competitors are always looking to steal their success formula and bring it to another level.
The CEO of a top hospital group in Thailand recently told me, “My greatest fear is that my staff become complacent and we lose our cutting edge in innovative health care and service. Continuous improvement must be an ingrained culture.”
Systematic exploitation of success
This is another key responsibility of the leader: identifying ‘cash cows’ and exploiting their success. In this, industries can take a lesson from Cirque du Soleil; having produced one highly successful show, they capitalized on their success and ventured into related growth areas by creating new shows with different themes. On the Las Vegas strip, five different Cirque du Soleil shows play to capacity every night. Not only that; they also export these shows all over the world.
The ability to capitalize on a successful product launch and more effective processes are change management requirements for the new leader. This multiplication effect has enormous implications for the pharmaceutical industry – which is why they are always in search of a winning product or service that can be duplicated and modified worldwide.
An organizational structure that allows ideas to be shared, resources to be galvanized and global perspective to be maintained will go a long way in doing so.
Systematic innovation
Creative innovation is one of the most critical aspects of leadership in the pharmaceutical industry today. “Why aren’t we better at innovation?” some companies ask. One main reason is the ‘if it ain’t broken, don’t fix it’ mentality. Innovation must be a constant focus of leadership – change leaders should be able to ‘break it to fix it’.
Taylor agrees: “Innovation is the way of the future and is critical in every part of the organization. Innovative products are what will keep Pfizer at the forefront of the industry.”4 He recognizes the importance of being innovative internally to improve business functions, to do things differently, to reinvent the organization’s structure and methods if necessary and being proactive and dynamic.5
Another reason why innovation is hard to come by today is the ‘not invented here’ mindset: an inability to bring in fresh ideas due to the discounting of developments by others. This can cause the demise of companies.
When A G Lafley, CEO of Proctor & Gamble, noticed an insular culture and ignorance of new ideas in the company, he overcame it by investing in a state-of-the-art process for sourcing ideas externally, which includes a global network of resources and online knowledge-exchange sites.6
Conclusion: Innovation is 24/7
In fact, innovative leaders are ‘consumed’ by this ‘break it to fix it’ mindset. They find ways to lead the market, rather than be led by it. This does not mean being the first to provide new, breakthrough products all the time; but it means every new product, with its accompanying service process, must bring more and more value to customers.
References:
- ‘Interview with Mark Trudeau,’ Interface: A Newsletter for Clients of IMS, 63, June 2006.
- ‘Interview with Jay Chang,’ Interface: A Newsletter for Clients of IMS, 61, December 2005.
- ‘Interview with Alan Taylor,’ Interface: A Newsletter for Clients of IMS, 59, August 2005.
- Ibid.
- Ibid.
- Morten T Hansen and Julian Birkinshaw, ‘The Innovation Value Chain,’ Harvard Business Review (June 2007), 121.
This is an adapted excerpt from Dr Ng’s latest book “Dim Sum Leadership: Your Second Serving” – a powerful and insightful series on leadership for busy executives.
