Pharmaceutical Companies Need to Know Their Purpose
This may sound simplistic and obvious. But, have you noticed lately that pharmaceutical companies appear to be struggling with a confusing array of seemingly contradictory strategic choices? Some of these choices leave even the most knowledgeable industry followers wondering and speculating about the rationale behind the decisions.
Should they get bigger, should they downsize? Should they acquire, grow organically, or divest? Should they be “pure” pharmaceutical plays or diversified healthcare companies? Should they continue to exploit the US market or expand into emerging markets? Should they rebuild and restructure R & D or move to a more flexible outsourcing model? Should they focus on diseases, products, or technologies? Are regulatory compliance, manufacturing quality, and integrity important for building trust and credibility or are they “envelops to be pushed” for competitive advantage and financial gain? Strategic and tactical choices that can affect business today and well into the future.
So what’s the big deal? Don’t all companies go through this? Why is this important?
It’s important because, when a company determines who they are, finds its purpose, and develops a passion for what they do; strategic and daily operational decision making become easier and are more likely to deliver the organizational goals and objectives that support the company purpose. This corporate understanding of “self” includes a deep seated set of behavioral expectations, values, and principles by which the company operates and does business.
Definition, consistency of behavior, and organizational alignment allow employees to embrace and support the corporate purpose in their daily activities. Decisions become easier as choices and options either fit or don’t fit the behavioral values or purpose. More importantly, employees, prospective employees, customers, collaborators, and investors all know what to expect from the company.
Despite all the mission and vision statements in their lobbies, I believe many of the Big Pharma companies today have lost their purpose and are confused about their ”self.” With a fixation on near-term financial performance (their apparent purpose), they seem to be struggling to find the “quick fixes” to business success in the evolving new healthcare market.
Most pharmaceutical companies would never admit they have lost their purpose. At the same time, if they were to explore this fundamental business principle, many might learn that even their management teams are uncertain, if not finding total organizational disagreement about who they are and what they do.