Pharma Founders - You're The Chief Everything Officer

Yes, Pharma Founders, even if you're the CEO (Chief Executive Officer), you're in reality the Chief Marketing Officer, Chief Financial Officer, Chief Revenue Officer, Chief Human Resource Officer, etc.

The buck stops with you and although you may empower the de facto CMO, CHRO, CRO etc to execute the respective strategies, you're ultimately responsible for the success of each of these departments.

Case 1 - Ineffective CRO

A healthcare CEO informs me that the CRO he hired 6 months ago wasn't delivering results.

Some vacancies were not being filled, and sales were out of target.

When I probed further, I discovered that there wasn't a robust system to drive sales. This was the existing scenario:

1. No Scientific Recruitment & Selection system
2. No rep training in anatomy & physiology
3. No Sales training of reps
4. No Sales Force Effectiveness system
5. No Coaching of CRO

Case 2 - Inexperienced CMO

Another healthcare CEO revealed to me that the CMO that was recruited 4 months earlier was inexperienced in marketing and had brought on board buddies to fill marketing vacancies.

This company had the following deficiencies:

1. No Scientific Recruitment & Selection system
2. No Marketing planning system
3. No Coaching of CMO

Case 3 - Ineffective SFE

In a discussion with a third healthcare CEO and a senior Sales Manager, I discovered that they faced the following problems with their SFE system, which they developed with a third-party vendor 1.5 years ago.

1. Insufficient data storage - so poor analysis & planning capabilities
2. Sales managers not insisting on proper data entry by reps
3. No Coaching of Sales Managers

In all 3 scenarios, it's obvious that the CEOs are not tracking the execution of the tasks.

As Peter Drucker advised, there's no shortcut to success. Success needs management. And to manage, you need to track, i.e. measure performance.

But measuring is not enough...

If you want to not only see results, but speed up results, whatever is measured need to be reported.

The first step to gain clarity of operations is to create a Dashboard of the most important tasks/results.

From there, it'll be super easy to dig into the problem areas with respective CXOs.

Follow the 80/20 rule and only monitor the tasks that deliver 80% of the results.

These metrics should be a mix of lagging and leading indicators.

So for pharma, these should be essential for tracking:

• YTD Overall sales vs target & growth
• YTD Core products sales vs target & growth
• R&D pipeline by different clinical trial Phases
• Production metrics of core products
• YTD Average selling price of core products; vs last year
• YTD Gross margins vs target; vs last year
• YTD Operational costs vs target; vs last year
• YTD EBITDA vs target; vs last year
• YTD Cash flow; vs last year

Conclusion

Whatever the size of a pharma business, success depends on tracking metrics and making improvements.

It's always incremental improvements that matter and not to depend on massive changes.

Cash flow must always be monitored in whatever phase the pharma company is in.

Start with a simple Dashboard and progress from there.

And always remember to coach the people reporting to you.

Without the coaching aspect, you will only see the numbers and not know the stories behind them, and therefore, you won't be able to empower your people.

And if you truly desire sustainable business growth you must do this.