Life science companies, like any other organization, are built on routines. The fact that such routines are changed can sometimes be attributed to successful leadership impulses. Especially when there is a great deal of uncertainty what direction to go, leadership can provide orientation. But leadership alone is not enough for such far-reaching changes. If you want to get out of fire-fighting mode or even promote innovations, you have to check these leadership impulses and adjust organizational structures.
Same, same – but different
In recent years, it has become clear that a “let’s carry on” approach is not necessarily promising for life science companies. Assumptions that, for years, have stood for economic success have been put to the test. This not only refers to the mythical assumption that ‘only a large sales force ensures large sales’, but also to internal sales force routines. Medical practitioners have limited the access granted to sales reps because of the pandemic and the channels to medical practitioners are not forecast to open again for all field functions. This has exposed known pain points.
Some companies have responded by changing their strategies and initiated digital go-to-market projects or adapted product launch routines to physical contact limitations. These initiatives often originated from leadership impulses, which served as an orientation when it was unclear which path to take, especially at a time when market needs were changing. Orientation is usually provided in companies by structures such as hierarchies or processes. Structures offer a degree of certainty in expectations since nothing needs to be questioned or decided anew.
However, such structures do leave gaps and may create pitfalls. Structures cannot, of course, provide answers to all the eventualities in the market. But a much more interesting fact for life science companies is that the functional division of labor was not designed to enable individual functions to venture out of their comfort zone. Why should you cooperate across functions in a crisis? Why should a medical department give up its autonomy in a cross-functional project, or sales directors question their own staffing levels?
Why leadership is (not only) important
These leadership initiatives have closed gaps in the structures. Where there was no structure, leadership first stepped into the breach. Field staff assigned to different indications who used to visit physicians alone have joined forces in approaching physicians. And digital access to physicians has been organized without any trench warfare between internal services and field staff. The most prominent example of a leadership impulse is probably Project Lightspeed, BioNTech’s COVID-19 vaccine development program. However, such impulses do not necessarily have to come from a CEO; many initiatives have their origins in very different corners of a company. You could say that leadership comes into play when critical moments arise. In such situations, the question of which decision is now the right one and which consequences would rather be accepted is an open one.
It is not just managerial staff who have to step forward; impulses can potentially come from any employees. For managers, this is a relief as there is no need for them to lead in every critical situation. This allows ideas to emerge – how to deal with a changing market, physician’s new needs, changing business models or, last but not least, employees’ new demands. In designing organizational structures this means answering the following questions: At what point do structures allow critical moments to arise? After all, this is where creative moments are needed. And where do you ensure that these (possibly innovative) negotiation processes are transferred into (new) routines?
Some of the gaps in the structures are necessary – namely those that are to be filled in the situation itself. Because this level of uncertainty cannot be handled by structures and processes. But if managers are supposed to constantly point to where the north star is, they will be exclusively concerned with providing orientation. In these cases, it is helpful if an organization creates structures to relieve managers of this task – or put more bluntly, if the organization is established in such a way that only the right decision-making necessities end up on a manager’s desk. This also applies to pandemic-related initiatives. In some cases, the impulses given have not (yet) been transformed into structures. The communication channels between the actors involved have not been established, and there is no certainty as to when which activity will be initiated by whom. This is where leadership reaches its limits. Anyone who wants to orchestrate the diverse channels of push and pull communications in the life science business is moving toward giving permanency to initiatives that are, for the moment, innovative.
A tricky trade-off for executives
This is not easy to evaluate for executives because they have to decide which successful leadership impulses should be adopted in organizational structures. When do you need executives to step in and when do you need room for expertise beyond the hierarchy? When are executives the ones whose leadership is important and when do you build structures that create orientation? In light of such tensions, the process to be defined is how much leadership or security of expectation is needed via a hierarchy, a strategy, and specific processes. How much potential structural deficiency should you allow in order to be able to lead?
So, leadership is not the only lever for providing orientation. But it is an important lever to show which direction an organization should be taking. Organizing intelligently means creating a formal structure in which the right people can take the lead, while at the same time relieving any burden on the structures. This way, you take away the burden of dealing with routine issues and create space to focus on exciting, unanswered questions. This allows the necessary resources to push through impulses in the face of routines, which is probably the greatest potential for disruptive innovations.
How do you move an organization forward? In designing organizational structures, you have to consider what kind of tensions are needed and which contradictions have to be regularly decided on. Unfortunately, all those who only rely on their leaders will sorely miss an important structural lever; and all those who only rely on structures will have a long wait for the relevant actors at critical moments.