Exceptional leadership for an exceptional industry

Professor Brian D Smith dives into findings from his research to see what makes a good pharma leader

Few subjects consume as much bandwidth as leadership. From banal LinkedIn posts to weighty academic tomes, to those airport books with sexy, over-promising titles, we’re overwhelmed with prescriptions about how to lead. But look carefully and you will see that this huge edifice is built on one, dubious assumption: leadership is leadership, whatever business you’re in.

This is an extraordinary claim for which, to echo Carl Sagan, there is no evidence. Further, it is counter-intuitive: do we really believe that leading, say, Novartis is the same as leading Wal-Mart? Aside from obvious, basic competencies, is the skill-set of a CEO in pharmaceuticals or medical technology really the same as one in retail or consumer goods? These thoughts drove my latest research, in which I asked 23 industry leaders two questions: Is leading in our industry different and how do those differences influence how you lead? Their surprisingly frank answers, based on seven hundred years cumulative experience, make essential reading for those who work in the industry and perhaps aspire to leadership.

An exceptional industry

Everyone thinks their industry is special and their company unique. Management scientists like me are trained to screen out this subjectivity and identify what, if anything, is genuinely exceptional. When this technique was applied to my research, four authentically important factors emerged, as outlined below.

What makes our industry exceptional?

We have a contract with society

Society gives our industry permission to make money out of human suffering in return for longer, healthier lives. As Novo Nordisk’s Lars Fruergaard Jorgensen put it, at this boundary of science, health and business there is always going to be emotion. Compared to other industries, this social contract creates higher moral expectations, which means that leadership cannot be focused on profit alone.

Our value chain is complex

Both the supply and demand sides of our industry are increasingly complex. As our core science advances, so does the augmented value created by services and complementary technologies. Add to that the complexity of our global market, in which professionals, payers and patients are increasingly segmented, and our industry is not only complicated but complex, in the Chaos Theory sense of the term. As UCB’s Jean-Christophe Tellier told me, the complexity of the value chain is the industry’s defining characteristic.

Ours is a risky business

Allan Hillgrove, of Boehringer Ingelheim, painted a graphic image of our industry’s 40-year investment cycle, in which very large assets face both technical and commercial risk as product life cycles overlap over decades. Few other industries are required to manage risk profiles like this and this requirement inevitably shapes the leadership role.

Our workforce is knowledge-intensive

In the words of Lundbeck’s Deborah Dunsire, a world-class life science company requires a very high concentration of intellectual capital across a very broad range of disciplines. From discovery scientists to health economists, our workforce operates at the frontier of knowledge. And, significantly, the knowledge intensity is not restricted to only some parts of the industry. Even roles that are semi-skilled in other industries, such as sales or customer-service, often require qualified scientists in the life science industry.

From this first part of my research, it was clear that each of these four factors differentiated our industry from others. But it is the convergence of these factors that makes pharma and other life sciences business exceptional. Whilst some other industries can claim some of these factors to some extent, no other business combines them together with the same intensity. It is this combination of unusual factors that creates the exceptional environment in which our leaders must operate and means that the ‘leadership is leadership’ trope is lazy thinking.

Leadership as adaptation

My research into leadership nested inside a wider set of research projects at the University of Hertfordshire, all of which are concerned with the evolution of the life sciences industry. The findings from this wider work (which can be found in my book ‘Darwin’s Medicine’) helped us to see that our industry’s leaders occupy an exceptional habitat, quite different from that of leaders in other sectors. As Darwin taught us, success is about neither intelligence nor strength but adaptation, so the next phase of our questioning sought to uncover how leaders in the life sciences industry adapted to the exceptionality of their industry context. In all, nine critical adaptations emerged as summarised below.

Nine leadership lessons from the life sciences

The mission matters

Whilst other industries pay lip service to mission statements, they are seen by our leaders as a critical tool. This is because they align the business to its social contract, they enable complex, cross-functional working, they help to mitigate some forms of risk and they motivate highly educated workforces.

The big issue is bicongruence

The complexity of our industry demands specialisation (known technically as macrocongruence) but specialisation makes it harder to align internally (known as microcongruence). Our leaders have learned that their key challenge is to achieve microcongruence and macrocongruence simultaneously – bicongruence in the jargon of management scientists.

Leadership is about decisive facilitation

The traditional management literature is polarised between two schools of thought. The first sees leadership in the style of Steve Jobs: dynamic, charismatic and somewhat autocratic. The second sees leaders as servants, enabling their teams. Neither style fully fits the four conditions of the life sciences. In our industry, leaders adopt the facilitation approach of servant-leaders but combine it with ‘crystallising’ complex choices in the style of decisive leaders.

Leadership is individualistic

Naïve, aspirant leaders are often misled by books and gurus into thinking that leadership can be reduced to a standardised, mechanistic process. In reality, leadership is idiosyncratic and very much shaped by each leader’s personality and character. Leadership style is founded on their deeply held values and it demands that leaders both model and coach behaviours in a very personal way.

Subsidiarity is a contingent craft

A critical issue for leaders is how much to allow decisions to be made at lower levels – subsidiarity in the jargon. They have learned to ‘craft’ this decision based on two contingencies. First, by allowing discretion to sub-ordinates as much as possible, but only when guided by a clear, understood mission. Second, retaining control only where they, personally, can make a significant difference.

Stakeholders demand transparency

All leaders are caught in a web of competing priorities between customers, owners, employees and other stakeholders. They have learned to balance to these tensions by prioritising consistency and transparency in their communications. As Andy Thompson of Proteus Health put it, he doesn’t do PR: he engages with stakeholders on the basis of science.

Words are important

The complexity of the industry, its science and its audiences mean that communication is both very important and inevitably difficult. One of the more surprising findings of the research was the way leaders prioritise the use of language. Their vocabulary and their toolbox of powerful phrases, metaphors and figures of speech were an important but often invisible adaptation to their leadership environment.

Protect the leadership asset

Whilst good leaders are, indisputably, an important intangible asset to any company, they are also remarkably fragile assets. The interviewees in my study all recognised that the importance of maintaining themselves – their mental and physical health, their energy levels – was equal to that of maintaining any other key asset in which the organisation had invested.

Leadership is a growth process

The final question in my study asked the leaders what they would tell their younger selves. The answers were varied but coalesced strongly around the theme of personal growth. Understanding one’s own values, following a vocation and constantly developing one’s knowledge, skills and personal attributes were the mainstay of their abilities as leaders.

Leadership as evolution

The fundamental lesson that emerged from this research is that the traditional idea of leadership as a generic, universally-applicable talent is flawed. Like other advanced competencies, it may have a small core of transferable basics but much of it is totally situation-specific. This reminded me of Darwin’s Galapagos finches, who shared their basic anatomy but who thrived because of the way they had adapted their beaks and other features to the particular habitat of each island. Leadership in the life sciences is much the same. To succeed, you must recognise and understand what makes our industry exceptional – the four factors mentioned above – and then adapt to those conditions. The nine findings discussed above are each examples of how experienced industry leaders have adapted to the exceptional environment of the life sciences industry. Leadership is not leadership, it is adaptation.

About the author

Professor Brian D Smith is a world-recognised authority on the evolution of the life sciences industry. This article is based on his latest book Leadership in the Life Sciences: 10 Lessons from the C-Suite of Pharmaceutical and Medical Technology Companies. He welcomes questions at brian.smith@pragmedic.com

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