A decade of restructuring and transformation efforts has taken a toll in pharma

screenshot_89POST SUMMARY: the pharmaceutical industry has been under stress for several years.  Data suggest that many pharmaceutical workers crave clearer direction as they try to cope with rapid change.

The industry has responded with restructuring, acquisitions to fill product pipelines, and cost-containment efforts. But research suggests that change fatigue has set in. We surveyed nearly 20,000 pharmaceutical employees at 22 companies between 2006 and 2013 and compared their responses with those of nonpharmaceutical workers on the dimensions measured by McKinsey’s Organizational Health Index (OHI). According to their analysis, the health of pharmaceutical companies deteriorated after 2011, and by 2013 the industry ranked below the average of other global ones on most dimensions.


Data suggest that many pharma workers crave clearer direction as they try to cope with rapid change. Another finding is that executives may be overemphasizing near-term goals through leadership styles that are increasingly authoritative and less consultative. The distraction of restructuring also seems to be hurting the ability of pharmaceutical companies to absorb new external ideas, as well as their relationships with key stakeholders, such as governments, patients, and physicians. If the pharma sector is a canary in the coal mine, many industries may need an organizational reset during the years ahead.


This is not news to those of us who currently work with and have worked in pharma.  While new ideas are needed, along with game changing people, the hiring practices within pharma are designed to hire people who will work within the current system.  Talented people who can add real value are being driven away by authoritative mangers and a system that rewards people who don’t make waves.  For a perfect example, look no further than Amgen.  The once nighty biotech company has been decimated by a CEO who has an investment banker background and an influx of former big pharma people from J&J and BMS.