Nick Petschek, Kotter International discusses how market turbulence is taking a toll on the pharmaceutical industry.
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Business crossroads concept.
Shifting U.S. economic policy is stalling large pharma and biotech deals, causing leaders to push them down the line by months, if not whole quarters. Now more than ever, amid volatile and fast-changing market conditions, pharma leaders and their teams must be capable of swift and effective decision making — to identify and assess emerging opportunities and to pivot their strategy when market conditions demand it.
This is easier said than done. Accelerating decision-making means acting authoritatively without forfeiting the essential balance between risk and opportunity that pharma leaders navigate daily.
The solution lies in a three-pronged approach:
- Streamline internal processes to eliminate bottlenecks
- Empower teams to act decisively
- Implement decision making frameworks designed to balance speed with thoughtfulness
Together, these approaches can create an organisational environment where fast decisions enable growth without compromising quality or compliance.
Streamlining internal processes
Decision bottlenecks caused by nebulous or overly complex internal processes are one of the chief barriers to accelerated decision-making. Poorly streamlined processes could cause delays that result in a company missing out on an advantageous opportunity. The most common culprit in these cases is unclear decision ownership, where teams are unsure of who has the final say. Even the most well-prepared strategy is ineffective if teams fear acting without the appropriate sign-off and are unable to execute it.
To ensure decision-making clarity, pharma companies should adopt a clear process framework that assigns specific roles to specific individuals. The RACI (responsible, accountable, consulting, informed) framework is one such example, and is easily adaptable to a variety of organisational contexts.
But whichever framework a company chooses, a guiding light of accelerated decision-making should be to act according to principles instead of rules. It’s impossible to create rules for every given scenario, but principles, when well understood, can be applied more broadly, quickly, and confidently.
Kotter’s own “dual operating system” can also help pharma companies in this instance. This approach maintains the traditional hierarchical structure that supports regulatory compliance and quality control while simultaneously creating agile networks that can respond rapidly to market shifts.
The key to the dual operating system is identifying an organisation’s brain trust — the social influencers and subject matter experts who naturally drive conversations and decisions within their departments. By giving these influential voices access to critical information, and the authority to act on it, companies can accelerate their decision-making without bypassing necessary oversight. Giving the right information to the right people can make the difference between capitalising on an opportunity or watching it slip by.
Empowering teams for decisive action
Even with streamlined processes in place, the “fear factor” element can still stymie fast decision-making within middle management. Managers often feel pressure from both above and below, and the fear of failure could make them hesitant to act.
But, in the world of pharma, a failure is not necessarily the end of the road. Smaller failures, such as an unsuccessful drug trial, offer opportunities to iterate and learn. Pharma leaders should work to model and impart this mindset among their managers and demonstrate a willingness to go big when success emerges.
Cross-functional integration can also go a long way toward empowering teams. For example, involving quality control teams throughout a development process — rather than waiting to bring them in until the end — gives them the ability to flag issues as they arise and help maintain momentum. Teams working in tandem, instead of one after the other, will get a better sense of what their colleagues need. That understanding can then inform their own work, contributing to an organisational culture that values flexibility and learning from others, and is more able to support fast and unexpected changes when they arise.
The pharma industry also has unique traits that occasionally call for a “sprint mentality.” This requires a willingness to accelerate investment and resource access when breakthrough results emerge. Unlike steadier manufacturing processes, pharma development often hinges on pivotal moments when rushing through subsequent steps becomes strategically advantageous. If a promising drug trial shows exceptional results, companies should be prepared to invest more and at a quicker rate. A sprint approach requires teams to be empowered with pre-approved escalation pathways and the authority to rapidly reallocate resources as needed.
Defining success in a volatile market
Pharma companies should pay close attention to several key metrics to help measure success under volatile market conditions, which may differ from those normally tracked in more stable environments. Growth in these metrics can signal that organisational efforts to accelerate decision-making are working. They include:
- Speed to market for new offerings.
- Revenue impact of recent decisions, measured via sales increases or deal acceleration.
- Employee engagement and collaboration metrics, which should increase as teams collaborate more closely and with more urgency.
- The time, quality, and costs associated with a given process — streamlined decision-making should result in less time, potentially lower costs, but without sacrificing quality.
Beyond these quantitative metrics, transformation in service of accelerated decision-making also shows itself through several qualitative indicators. Leaders should look for increased organisational energy and engagement, a growth mindset among employees that embraces innovation, and a sense of excitement about the future. Teams should be empowered to take calculated risks, knowing they will be viewed through a learning-first lens, and given clearly outlined processes and metrics to pursue.
Speed as a competitive advantage
In a volatile market, decision speed can be a powerful competitive advantage for a pharma business. Companies that master streamlined processes and successfully empower their teams to act decisively on opportunities while upholding their commitment to compliance and quality will be better equipped to weather economic turbulence and emerge stronger and quicker on the other side.