Executive Search Challenges & Opportunities in Pharmaceutical and Healthcare Sectors
As one looks at the Pharmaceutical and Healthcare community over the last five years, the one word used to summarize this period would be “change.” Double digit growth in traditional markets have slowed to 4 - 5% annually while emerging markets like China, Brazil, Mexico, South Korea, and Russia are now approaching or exceeding double digit levels. With patent expirations, weak pipelines and fewer blockbuster drugs on the horizon, generic competition continues to strain major pharmaceutical companies as does the FDA’s extremely strong position on safety, in some cases ignoring risk reward balances. Access and reimbursement also plays a strong part in this constantly changing equation, factoring in governmental and payer /provider pressures which differ from one country to another.
Pharmaceutical, biotech, and healthcare providers must – out of necessity - be constantly rethinking their value propositions and organizational structures as cost alignment and rapid responses are instrumental to be able to adapt to the changing landscape that is reshaping their worlds. In fact, almost every major pharmaceutical and biotech organization have, or are in the process of, restructuring and reallocating resources to respond to the expanded and dynamic skill sets required by leaner and more dynamic response teams, whose leadership requirements makes them capable of reacting to opportunities as fast as they present themselves.
As the structure and priorities of the Healthcare Industry changes, we have seen more turnover in C-level positions, in part responding to the need for different skill sets but also created by board level impatience. Regarding Research and Development pipeline pressures, availability of data on an accelerated basis and the proliferation of biologics have dramatically changed the landscape. Leadership skills as well as scientific excellence are being stressed as candidate pool shortages are becoming a top priority. Add to this equation the natural aging of our population and the onset of “baby boomer” retirements, and the concerns become even greater as companies, large and small, are attempting to strengthen their executive talent to be able to effectively respond to the critical issues the healthcare and pharmaceutical communities are facing.
Still in demand are bottom-line executives who can identify strategic marketplace opportunities, navigate the complex global regulatory and managed care environment, and succinctly link R&D organizational objectives to patient needs.
Rising to the challenges
The challenge to the Executive Search community lies in defining this next generation of key management and challenging their need for self actualization and personal satisfaction -whether they are in R&D, marketing, strategic management, or the CEO’s office - and educating them (potential leadership candidates) to assure full understanding in terms of opportunities in organizations they refrained from considering in the past.
Increasing the candidate pools for talent is a constant issue at this juncture. Many of the larger healthcare organizations have globalized their presence to accomplish this. As a search firm that has specialized in healthcare and the pharmaceutical sectors for close to 30 years, our success has been based on establishing real partnerships with both our clients and candidates.
To be an effective search consultant, you must be able to have an established industry focus and a strong understanding of the marketplace, respond quickly and provide outstanding results. Get to know your client’s organization and understand their culture, internal dynamics and key management issues. Analyze the existing talent skills and work with clients to proactively fill any voids that exist, or may exist in the future. This implies being able to help your client identify where their next candidate may be working at in terms of company, industry and geographic location.
On-boarding, the process of successfully bringing the newly hired executive into the organization is a process of exposure, feedback, and performance measurement which normally starts when the executive reports to the organization. Be it at the C-level, key management, scientific or operations, success may be significantly impacted by on-boarding. To be able to expand candidate pools, create stronger emotional ties and therefore increase the acceptance rate, this process should begin with the first set of interviews. This is best demonstrated in the Healthcare world as one tries to bring an Academician/Thought Leader into a corporate setting, or convince a talented head of research & development to change companies during a time of economic uncertainty.
Address the issues early on
In a competitive environment where candidates often receive various offers and counter-offers, it is vital to address the appropriate social, informal communications and soft side issues early in the search process. If this is done appropriately, the batting average of a successful closure should increase significantly. Deeper and earlier recognition of the fears of change in any area of the healthcare community will lead to better understanding and a firmer footing for resolution.
Defining executive success within an organization and recruiting for that profile requires an open and meaningful partnership between search executives and their clients. Unfortunately, many companies measure the success of their executive search consultants only at the time of hire. Real success is measured a year or two later when performance and fit to the cultural goals have been demonstrated. That kind of follow up should be demanded of the search consultant as well. There is no better way to strengthen a partnership than assuring constructive feedback from your placement.
To have the ability to respond to the “changes” evident in the Healthcare community, the search community must be flexible, agile, be able to “think outside of the box”, and turn those thoughts into actions. Leveraging networks, defining candidates in cross-over situations, assuring positions are defined in a challenging manner, and creating a positive emotional reaction from the first interview on is essential. Here, the Executive Search Consultant and the organizations they serve can add romance to the process by mentoring and increasing comfort levels earlier in the on-boarding process. In cross-border situations, assuring mentoring by an executive who has gone through the process and can interface with the whole family, and anticipating their needs, should increase the batting average of success.
It is fundamental that clients and consultants work together to identify the right talent. Senior level executives that are passionate about their contributions typically do not fail because of what they bring to the organization. If they fail, it is more often a corporate cultural issue. On-boarding with care and continuing reinforcement (providing clarity of goals, specificity of interim objectives, and reinforcement as to appropriate process issues) can address this issue even at the C-level. Seems simple but rarely done effectively!
At the same time, we are finding companies are trying to retain their top talent or to re-recruit internal talent as a means to lower attrition and to maintain a culture that is motivated and passionate about the work they are doing. Nevertheless, this can be hard to accomplish. For instance, in the U.S., getting approval from the FDA has become more difficult than ever before. From a search perspective, this creates opportunities. When someone has spent years developing a compound, only to have it receive a non-approval, the chance of them becoming interested in outside opportunities grows tremendously. This is a key reason you must be able to manage “your network”.
If the right relationships are in place and the search consultant and client companies take a long-term view to their network, this can prove invaluable in an organization that is sustaining growth over time. Above all, remember to develop a seamless interaction between your search consultant, client, and candidate every part of this process must be crisp, add value, and be supportive. As change continues to impact organizational structure and asset utilization, the cost of the Executive Search process will be scrutinized, as will the results. Select your partners carefully so that each can continue to provide outstanding results.
Stephen M. Steinman
President & C.E.O.
For over 28 years, Steve has worked closely with the senior management of a broad cross-section of companies with a specialization in the Pharmaceutical, Biotech, Information Technology and Chemical industries. As a consultant to those organizations, he has helped to define their global human resource structure and organizational needs on both a strategic and operational basis. Steve leads executive search engagements across North America and Europe and draws on deep client relationships and executive talent connections on both continents.
Established in 1979, The Stevenson Group is a leading Retained Executive Search and Management Consulting firm serving a wide range of clients, from early stage venture capital based companies to Fortune 500 corporations. We are global industry specialists in the pharmaceutical/biotech community and have successfully filled a wide variety of senior level positions in: Business Development/Licensing, Clinical Development/Operations, Discovery, Information Technology, Medical Affairs, Medical Writing, Project Management, Publications Management, QA/QC, Regulatory Affairs, Safety of Medicines, Sales/Marketing, and Toxicology. Established for over twenty–eight years, HQ offices are located in Fort Lee, NJ.