Today, a senior pharmaceutical executive must be the corporate equivalent of a Renaissance Man. Like Leonardo da Vinci, whose
work at the dawn of the 16th century married divergent disciplines from painting to mechanics, pharma's next generation of
renaissance men and women must foresee connections between the commercial and clinical sides of the business—from global marketing
strategy to regulation, R&D, and clinical trials. They must be comfortable with several styles of management and motivated
by watching people in far-flung sectors of the company succeed. Unfortunately, today's top performers frequently are confined
to one sector of their company. Rising through silos, they manage best by focusing down into their organization instead of
up and across the enterprise.
As baby boomers retire, the pharmaceutical industry faces a leadership shortage. Not because tomorrow's leaders are less bright
than today's, but because our increasingly compartmentalized corporations tend to reward specialists. To meet the growing
need for people who can shoulder the heavy burdens that pharma places on general managers, companies must broaden the horizons
of coming generations. By exploring talent management strategies—practical methods for seasoning executives by shepherding
them through a carefully orchestrated career progression—a company can exploit the talents of high performers while tailoring
their development to meet the company's needs.
The Talent Gap
The next generation of pharmaceutical managers has not just been trained in a narrower range of disciplines—it also is smaller.
There just aren't enough good minds to go around. This problem has been a few years in the making. As early as 1997, McKinsey
& Company commented on the "war for talent." They reported in 2000 that 20 percent of the corporate officers surveyed agreed
they did not have enough talented leaders to pursue their companies' business objectives.
Given the demographic trends, the situation hardly could have improved in the intervening years. The US Bureau of Labor Statistics
reports that between 2002 and 2012, the annual growth rate of the country's workers over age 55 will increase at nearly four
times the rate of the overall population, while the number of workers aged 35 to 44 will decline by 15 percent. Data from
the Rand Corporation indicates that the growth of the US labor force has been slowing for the past 20 years.
The Inevitable Failure of a Silo Star
To compound the problem, some senior managers are leaving before they retire, creating even more top vacancies in large pharmaceutical
companies. Incumbents flee the politics and impersonal scale of large organizations for small pharmaceutical and biotech companies.
Pharma's long tradition of promoting from within magnifies the overall demographic trends. Companies want to promote their
own, rather than hiring senior people away from competitors or other industries. But given the narrow backgrounds of the coming
generation, where 18 years of experience can sometimes seem like one year of experience 18 times over, fewer and fewer managers
have the kind of coordination, foresight, and complex problem-solving ability needed to succeed in a general management job.
Finally, sheer love of science—and sometimes hubris—can keep a company's best minds off the general manager track. Many clinicians
want to stay close to their science, and decline to report to people who have lesser scientific credentials. This is unfortunate,
because the combination of a medical background and business experience is among the most powerful within the industry. If
the talent shortage cannot be turned around, companies will try—at least in the short term—to draw on experienced leaders
from other international industries. But given the demographics of the workforce, the wellspring of experienced candidates
in other Fortune 500 companies also will run dry.
The Primary Obstacles to Managing Talent Strategically