The benefits of being a family-run pharma company
The third generation of his family to hold a leadership role at Chiesi Group, Giacomo Chiesi reflects on the lessons he learned from his father and grandfather – and from his work as a former management consultant – about what it means to run a successful family business and its benefits.
Family businesses across industries including the life sciences sector contribute significantly to the global economy – they represent about half of the world gross domestic product and global employment. Some people might think that family-run businesses are traditional and stagnant, but they have inherent advantages that often result in increased innovation, productivity and efficiency.
The owners and family members are incredibly close to the business and deeply involved in decision-making processes as well as the company culture and dynamics. They often sit on the board, serve as managers, or hold a combination of roles in some cases. It is common that family members are involved in a family business starting from an early age, giving them valuable experience and insights into best practices, challenges and solutions that will play an important role when they are positioned to take on a leadership role at a company. Their intimate knowledge of the business also often positions the company to have greater flexibility in terms of strategy, decision-making and other areas.
Flexibility is an especially important asset when responding to unprecedented and sudden events that have a systemic impact on the business, such as the COVID-19 pandemic. When the pandemic emerged, there was an urgent need for quick decisions and swift adaptability while continuing to ensure the safety of employees and limited disruption of the manufacturing and supply chain for much needed and potentially lifesaving drugs for patients. Some pharmaceutical companies, including Chiesi, established emergency committees to build business continuity plans and contingencies to protect drug supply and worker safety.
Another important advantage of family businesses is that they focus on the long term, with the goal of leaving a legacy that often transcends the industry and becomes societally driven. With a family’s name on the door, there is more pressure for owners to take real responsibility and consider how a company will survive over time.
Prioritising long-term objectives rather than focusing on profits or the next quarterly report makes a business more stable and provides clarity for the future, allowing family businesses to build plans and focus on execution. Stakeholders, including patients, can count on the long-term commitment and financial stability of a family-owned business like Chiesi, which is perhaps why many family businesses are still around in the third generation and beyond.
This long-term orientation also helps family businesses align their objectives more closely with those of society and patients and maintain flexibility to invest in important areas of the business including research and development, disease awareness, diagnostics and education. Potential employees are also attracted to this long-term business philosophy, making family businesses well positioned to hire new talent. Today, Chiesi Group has more than 6,500 employees in 25 countries. It is not unusual for family businesses to be dynamic employers.
Family businesses experience many challenges that are common to all people and families, allowing the business to better relate to the issues of families that use their products or services. In the life sciences sector, the overall goal is to develop and commercialise innovative pharmaceutical solutions to improve health. We need to work to understand the needs, challenges and daily burden on families impacted by devastating diseases and use our learnings to develop impactful solutions.
This is why, at Chiesi, we partner closely and frequently with patients, caregivers and their healthcare providers and work to incorporate their voices into everything we do. The proximity of family to the business, coupled with our flexibility to deploy resources rapidly, also led us to establish a new organisation, Chiesi Global Rare Diseases, to develop and commercialise therapies for people affected by rare and ultra-rare diseases. Despite COVID-19, we expanded the new business unit to 275 employees in more than 20 countries in just 18 months.
Family businesses are not immune to challenges – governance can be complicated by the interplay between ownership and family members, and when there is a transition from one generation to the next. But I have seen first-hand the benefits of running a family business following the establishment of Chiesi by my grandfather, Giacomo Chiesi, in 1935.
We are very persistent as a family, and thus also as a company. We believe that persistence pays off and that you reap the benefits of your investments and your efforts. Our advantage is that we put the interests of patients ahead of our bottom line and have the flexibility to adapt to meet their needs over the long term, and we will continue to capitalise on opportunities to invest in research and development and to do so for the sake of science and patients.
About the author
Giacomo Chiesi is head of Global Rare Diseases at the international healthcare firm Chiesi Group, where he leads the team developing and commercialising treatments for rare and ultra-rare diseases.