3 Key Expectations for a Pharma CEO

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It is natural to expect a pharmaceutical CEO to “be a leader”. But what exactly does this mean, in practical terms?

Here are 3 key expectations for a pharma CEO – what a CEO absolutely must be able to do:

1. Establish the vision

2. Establish the culture

3. Establish the basis of metrics used

ESTABLISH THE VISION

This may be formulated de novo or built upon the vision of a founder, if the CEO is not the founder, or in the case of most pharmaceutical companies, the CEO is generations removed from the original founder. This includes the ability to –

• Communicate the vision to a broad set of audiences – internal and external stakeholders alike
• Frame the vision appropriately to scale, time frame, and even zeitgeist

ESTABLISH THE CULTURE

This critical ability includes the following key activities –

Hire the right executives for their positions. This one can be a book in itself, but at the fundamental level, the executives should be qualified for the specific tasks their job titles demand (charisma should be secondary) and have the capacity to translate the CEO’s vision appropriate to scale and relevance for their particular rank in the organization.

Install a value system upon which the organization’s culture adheres. This would then be implemented at the functional levels by the qualified executives for their ranks. Johnson & Johnson’s “Credo” comes to mind as one such value system. Now, whether or not your executives can cultivate a consistent interpretation and adherence to this value system would depend on whether you have hired the right people for their jobs.

GET OUT OF THE WAY. If you’ve hired the right people for the jobs who are competent, then let them do their jobs by letting them act on the authority you’ve given them. In smaller start-up biotech companies it may be easier for the CEO (usually the founder) to hold everything close to vest and, in fact, demand to sign off on everything in the organization. It is not easy to let go of some of those reins, but you have acted in what you believe is in the best interest of your organization – now, trust yourself and your actions. The ability for you to let your people do their jobs speaks as much about your confidence in your ability to hire the right people as it does your trust in your executives.

ESTABLISH THE BASIS OF METRICS USED

I realize that this is broad and depends on the function, but that’s why I didn’t say “establish the metrics” but “establish the basis of” metrics used.

In other words, if you say that your organization’s metrics is all about sales, well, everyone will take you literally and focus on this at the expense of everything else.

In the U.S. where off-label promotion seems to continue being a problem despite the years of scrutiny on this issue is testament to “sales above all else”.

If you say that your organization’s metrics will be about return in investment that has been created for long term sustainability and competitive advantage – not just to address short term quarterly investor expectations, then your executives may actually think “long term” and execute the strategies as such. 

Merck, for example, takes pride in its ability to historically deliver innovative products, and that had become part of how the organization perceives itself, and “innovation” becomes part of a metric of organizational competitiveness and performance.

In summary, these qualities do figure into the “leadership” expectations of the CEO but I specifically focused on the fundamentals of 

◙ “why are we even here in this business at this company” (Vision),

◙ “who are we, inside, as a company” (Culture), and

◙ “how do we know we’re doing what we said we’re doing and whether we should do something different” (Metrics).

(Source: “Practical Leadership for Biopharmaceutical Executives” by Jane Y. Chin, Ph.D)