In the second article of his series on pharma leaders, Amogh Deshmukh, Member, Key Leadership Team, DDI India, speaks on managing talent to meet pharma industry’s future business needs
The Indian pharma market increased at a CAGR of 12.79 per cent in 2015 from $6 billion in 2005, and is expected to expand at a CAGR of 15.92 per cent to $55 billion by 2020 (Source:PwC, McKinsey, TechSciResearch).
The pharma industry has a lot of things going in its favour such as low cost of production coupled with strong policy support from the Government of India.
India’s competitiveness lies in its significant lower cost of production vis-à-vis the US and almost half of Europe.
The Government of India unveiled ‘Pharma Vision 2020’ with an aim to make India one of the top five pharma innovation hubs by 2020. The government intends to support the pharma industry through world class infrastructure, internationally competitive scientific manpower for pharma R&D, venture fund for research and various tax breaks. To enhance ease of doing business in India, the approval time for creation of new production facilities has been significantly reduced. The government has also allowed 100 per cent FDI under the automatic route in the drugs and pharma sector.
In order to leverage this growth opportunity, pharma companies have started making massive investments in training and development of their leaders. Unfortunately, while it is a well-meaning step it is unlikely to yield positive return on investments or on stakeholders’ expectations.
Wondering why? Take a look at the results of a study of about 200 leaders from the pharma industry. Here is a summary of what we found:
Leaders in the pharma sector excel in execution. They are good at building networks and ‘getting things done’. They demonstrate high result focus. They are grounded in reality at the grass root level and are quick at decision making.
Strategic thinking came as an area of development across leaders in the pharma sector with only a few leaders demonstrating high degree of proficiency in it.
Pharma leaders particularly need to develop ‘other leaders’ across the length and breadth of the organisation while promoting a spirit of entrepreneurship, customer centricity and sound business acumen. So, given the above context what should the pharma CEOs should do?
I do not have a panacea for everything that ails the pharma sector but I am confident that the three steps explained below will help pharma organisations achieve success.
Make talent management a strategic priority
Considering its impact on key organisational metrics like top-line, bottom-line and everything in between, talent management is too important a function to be left to the human resources (HR) department alone and has to figure in the CEOs’ list of priority.
Conventionally talent management has been the domain of HR and the role of the CEO and COO was intermittent and distant. Two factors largely account for increased CEO involvement in the past few years: the shift in focus towards intangible assets such as talent, and increased board scrutiny in relation to both ethics and performance.
Jim Collins, author of Good To Great had this sound advice for CEOs, “Those who build great organisations make sure they have the right people on the bus, the wrong people off the bus, and the right people in the key seats before they figure out where to drive the bus. They always think first about who and then about what.”
The CEOs must start seeking answers to the following critical questions:
- What future challenges will leaders need to address?
- What kind of leaders do you need and how many?
- What knowledge, skills, experience, and personal attributes will be critical to their success?
Accelerated access to development
In an ideal world, everyone will have equal access to development. Unfortunately, the world we live in is far from ideal — it is hyper competitive. The war for talent will only get more intensified when the growth in the pharma sector will demand more and more ready leaders while the supply of such leaders will be significantly lower than its demand. That would mean that organisations will not only have to constantly vie towards engaging and retaining their top talent but also attract top talent from competition without losing much talent to them.
Let us get one thing straight – talent management is not a democracy. The key is to identify potential early and deploy a differentiated developmental journey for leaders that demonstrate potential to grow. Our best talent must have access to best in class development that prepares them for building readiness for future.
It’s easy to confuse performance, potential, and readiness, so it’s important to note the distinction between them. Performance is how someone is performing in their current role. Potential is someone’s likelihood for leadership growth. Readiness is someone’s fit with a specific role or job. Confusing these will lead to bad decisions about talent. For example, someone performing successfully in their current job, may not be ready for a role at the next level. Identifying someone with potential is only part of the equation—they may still not be ready for the role and will benefit from development to fill those readiness gaps.
Holding leaders accountable for succession planning
Before you are a leader, success is all about growing yourself. When you become a leader, success is all about growing others
— Jack Welch
Succession planning is important. Therefore, it came as no surprise when Sun Pharmaceuticals founder Dilip Shanghvi in one of his media interviews revealed earlier this year that succession planning is ‘engaging his attention.’
Leaders indeed must be evaluated on their ability to create a strong succession pipeline.
To be fair, before leaders are asked to coach and develop leaders they should themselves be oriented and if need be provided assistance on how to go about coaching and developing others within their realm of influence. The good news is ‘Coaching others’ is a learned behaviors’ and with practice and patience leaders can develop high degree of proficiency in it.
Creating talent pipeline is not a single programme or tool. It’s a process that provides both the right quantity and quality of leaders—in time—to step up and meet pressing business challenges.
As a first step, leaders need to ascertain current and future business drivers and design talent strategies accordingly. Overcoming different business challenges will need leaders to effectively demonstrate different behaviors.
Once leaders have ascertained the direction their business is set to take the next step is to define what success looks like for each level. The ask from a leader may vary significantly across businesses and levels; there cannot be a ‘one size fits all’ approach to succession planning.
Developing leaders presupposes checking for readiness of leaders. Assessing readiness not only helps you make accurate placement and promotion decisions, it also pinpoints each leader’s strengths and development needs thereby providing clear direction for targeted development.