Looking back to look forward...

We started last year still firmly under the protection of the covid vaccine and still working in an atypical way over pre-pandemic. 2022 was a year of reflection and adapting, more so than previously adopting to a new normal. Covid showed us two things – we can make medicines quickly and safely under pressure, and how we work is ripe for disruption.

If we could describe 2022 in one word, we would choose BALANCE. A delicate balance between shock and opportunity, between anxiety and excitement, and between unrest and stability.

As we start 2023, we reflect on last year. It was a year of ups and downs. Watching the news, we were regularly bombarded by distressing events; the war in Ukraine, a global energy emergency, a cost-of-living crisis to name a few. It may seem like there was little to be optimistic about but despite this there is always room for hope.

So, building on the spirit of hope and optimism, we wanted to share 3 challenges that lie ahead for us in this year and the opportunity we must overcome them by finding the right balance.

Innovation vs. execution

With the industry ripe for disruption, a challenge that lies ahead for pharmaceutical companies and service providers in the industry is how to find the right balance between innovating and executing. How do they become a “nimble” organisation? The right level of “nimbleness” means an organisation can devote the right resources to strike the balance of innovating for disruption while still executing so that they can serve both patients and shareholders.?To achieve this will require companies to ensure they have the right business model, one that embeds design thinking and transformation to foster innovation but also has the right processes and governance in place to drive operational excellence.

A 5-day vs. 4-day week

It is undeniable that our relationship to work has changed with many of us turning our backs on 9-5 office working for good and a hybrid working model being embraced. A key challenge that all firms face is how to ensure a "work-life" balance for their employees. One option could be to build on the pilot that occurred in 2022 and move to a 4-day working week. To do so will require a significant shift in mindsets, business models and ways of working. We might be a few years off this move, but the focus on improving work-life balance for companies will be critical for reducing burnout, improving productivity, and boosting employee morale. Underpinning this is a need to build the right culture from the ground up, offering additional employee "perks" and training management on best practices for coaching, professional development, and employee support.

Bottom line vs. top line

We started the year with M&A activity picking back up, valuation multiples in the sector rising and growth in sales as we started to move past the pandemic. Most companies in the industry prioritised top line growth - increasing sales and leveraging M&A as a tool to increase revenues. In a tale of two parts, the second half of 2022 has been very different. We have seen the cost of doing business increasing significantly due to several external factors, from rising inflation and a devaluation of the pound to increasing energy and fuel costs. Consequently, the biggest challenge for organisations is how to balance top line revenue growth with bottom line cost control. The key for companies will be stabilising the enterprise by creating a scalable cost base that can handle times of extreme cost pressure and also high growth scenarios by making structural, enterprise-wide improvements to optimise the internal and external cost base.

So, what's next?

As we start 2023, companies must gear up ready to tackle these 3 key challenges that lie ahead. Finding the right balance between a company being able to innovate and execute, employees spending time working and life outside of work and organisations managing both the top line and bottom line is going to be critical.

These will each require investment in time and effort to identify and implement the right solutions that work in both the short term to build momentum and in the longer term as organisations evolve. At 4C Life Sciences , we work with a range of biopharma companies to help solve these complex challenges, from ideation and conception through to implementation and results. If you would like to find out more and see how we can help, take a look at our website or get in touch by email at lifesciences@4cassociates.