Navigating your way to that C level role
Paul Tunnah interviews Nick Stephens
For those with ambitions to reach that hallowed C level role in pharma, understanding the right pathway to your objective can be the first hurdle. As the industry changes its business model in reaction to tighter profit margins and reduced levels of innovation the skills required to lead a multinational pharma company, or even a local biotech, are also changing concurrently.
So what does it take to gain that elusive C level title and what paths have those in such roles trodden to reach this destination? Is it breadth or depth of expertise that is required and in what areas? Is it market, product and technical knowledge or more subtle interpersonal skills and relationships that are key? And finally, even if you have what it takes, where in the company should you be working, and how, to get yourself noticed?
To help provide a perspective on these questions pharmaphorum spoke to Nick Stephens, CEO of leading pharma search company RSA. As an experienced service side industry veteran, Nick has seen pharma change over the years and worked closely with many of its leaders both within their senior executive roles and during their earlier career development positions. We thought he might have some interesting advice for those pondering the questions above, so read on to find out what Nick had to say.
PT: Hello Nick and thanks for speaking with me today. Firstly, what’s your background?
NS: I’m a frustrated marine biologist and law graduate, although I never practiced. After three years working for a metals trading firm I entered the industry with Baxter Healthcare in sales and marketing, before helping to establish a hospital equipment and supplies distribution business for them. Then, after 18 months banging my head against a brick wall in the NHS (just as the second phase of NHS Trusts started to happen), I joined my dad in his boutique selection business. I was about the fifth person to join in 1995, as a researcher, so I learnt how to do everything. I “took over” in 2000, we hired proper non-executive directors and decided on our first strategy, which is largely the same today, eight offices and 70 or so people later.
PT: What do you most enjoy about being in recruitment?
NS: The opportunity to talk with experienced people who are brighter than me and to learn from them. I also enjoy watching people’s careers grow, both those in life sciences who I’ve helped over many years and also those people inside our business.
“Flexibility is required so the good exec thinks first about values rather than processes.”
PT: What impact have recent industry changes had on the career pathway in pharma?
NS: The industry has begun to consolidate and behave like other large industries, pushed by reduced profit margins and the global economy, leading to radical changes from a career perspective. You used to be able to progress to a C level position operating in one territory alone, provided it had a headquarters in it. Now you need to work in at least two major markets, preferably three, and also demonstrate the ability to be much smarter with your portfolio – to understand your customers and grow without just putting more resource on the ground.
PT: If we look at the very top of the organisations, what common characteristics to you see across successful C level executives?
NS: Frankly, many of the current crop of senior executives are finding it tough. This is partially because the environment has become harder, but also because they are too focussed on short-term shareholder return. The ones who succeed maintain a core vision of making patients better and take a longer term view, in addition to leading by presenting a clear vision and transmitting that to all the relevant stakeholders. Also, a good C level executive understands multiculturalism, i.e. understanding that the American model is not necessarily transferable to Europe, the Far East, former CIS states or South America and visa versa. Flexibility is required. The good exec thinks first about values rather than processes.
PT: What does this mean for the aspiring junior or middle level managers who have ambitions to step up to the C level?
NS: The first piece of advice is to ask yourself if you really want to step up to that level – all organisations are pyramid shaped but it’s alright to develop and add value in ways other than trying to reach the very top. Aside from that, I had a boss at Baxter once who said “career advancement is really simple – work out what your boss wants and give it to them!” So stay visible in the organisation by being a real star performer, ideally within headquarters. With the larger blue chip organisations it’s also very difficult to do well without at least a four or five year spell overseas. Getting out to a new region and becoming the person that your boss knows they can rely on to solve local problems is an ideal opportunity to show your mettle.
PT: In terms of people to aspire to, are there particular senior executives that you regard as really good role models?
NS: There are too many to mention so I’ll try to highlight a spectrum, Andrew Witty is the epitome of a great big pharma boss and Bill Burns did a particularly good job at Roche. In the biotechnology space Roch Doliveux at UCB shows clear leadership, Mark Levin, the founder at Millennium, was very clever about increasing the value of the business while not diluting its assets and I also think highly of what Andrew Heath did at Protherics and the way that Louise Makin has led the combined Protherics BTG operation. Peter Stein has made spectacular progress with Norgine and in Asia John Graham has built a brilliant new business model. All these people gave clear leadership and clarity of direction, deliverables, vision, purpose and values.
PT: Do you think the recent influx of talent from outside pharma makes it harder for those that have only worked within the industry to make it to the top?
NS: Yes – especially if they are not open to learning from those people. The industry has historically had an intellectual snobbery about ethical pharmaceuticals and patent protection. Now, the best way to create value is to understand your patients and all other stakeholders such as the healthcare providers and governments. The new model is much more about customer understanding and partnership, which is something consumer marketers know very well. So if you want to get to the top, you must redress the balance by learning from these people.
“Andrew Witty is the epitome of a great big pharma boss and Bill Burns did a particularly good job at Roche.”
PT: What kind of activities do you see the more forward thinking executives taking part in to foster better relationships with broader stakeholder groups?
NS: The desire for better relationships is driving a lot of open innovation, with governments, charitable bodies, or even your competitors (perhaps through sharing pre-clinical information). In the later clinical stages, it’s about demonstrating a desire to comply and to contribute to the regulatory process rather than to be adversarial with I and designing your trials to deliver a target product profile that purchasers want to pay for. At the commercial end it’s much more about pharmacoeconomics, about demonstrating the value of your medicines and sharing the risk with the payer.
With all the clinical data the industry holds it should be easier to guarantee the patient outcome, especially when the appropriate diagnostics are used. Such data can be used to demonstrate hard facts over marketing, helping carers and patients and minimising the risk of the large fines and damaged trust associated with ill-advised promotional spin.
PT: Looking at industry diversification, what do you see as the most important areas beyond traditional drug development for executives to keep abreast of?
NS: Aside from creating true value in the corporate brands, the biggest untapped value area in the industry comes from having collected over 30 years of clinical trial data – if pharma could mine that data it could significantly impact healthcare systems and patient outcomes. Slightly closer to the current model, biologicals and regenerative medicine are clearly important areas. Also, the convergence of drugs, diagnostics and devices is very exciting – ultimately what’s the difference between a nanotech device and a large drug molecule to a patient who just wants to get better? That’s why I mentioned Bill Burns earlier as a good leader, he led Roche through the Genentech and Boehringer Mannheim diagnostics acquisitions, bringing on board diagnostic/biotechnology expertise and not interfering with it until it could be properly integrated. I think the future lies in stratified medicines, in diagnostics defining smaller patient groups (such as HER2-positive breast cancer patients) where you know your medicine is safe and efficacious, plus better delivery methods, such as stents, to deliver drugs where they are needed.
PT: Looking at geographic diversification, what are the major differences in how the industry operates over in the Far East?
NS: Much of the industry in Asia is as fragmented as it was in Europe 25 years ago, so lots more smaller firms with localised medicines. However, ICH GxP ensures the industry operates in the same way across the world, so the real differences are in engagement routes to the patient, local medical practice and the ways in which medicines are paid for. For example, in China the focus is more on prevention and in Korea medical practice is very localised with patients often buying drugs directly from the pharmacist. So in some of these regions pharma has an opportunity to use its brand to add value, getting local populaces to recognise and trust their name.
PT: What do people most learn from working in these emerging markets?
NS: An understanding that pharma, and its future, is not centred where you thought it was. In career terms, this generates knowledge that can be used elsewhere and applied as an individual rises through a company. Andrew Witty is the best example of this – he ran China and worked out of Singapore, running the Asian region for GSK. It was a very bright move of the Board to appoint him as CEO, because he understands the potential of the emerging markets more intimately than other Chief Execs. Soon, experience of emerging markets will be essential rather than desirable for the top jobs.
“Soon, experience in emerging markets will be essential rather than desirable for the top jobs.”
PT: Where do you see the current offshoring and outsourcing trend heading in pharma?
NS: I actually have real data on this from a C-level survey we conducted. First, the trend towards outsourcing is unstoppable and I believe internal workforces will be reduced to the minimum number of employees necessary to maintain core activities. The most process driven tasks, like formulation development, manufacturing, clinical research monitoring, pharmacovigilance monitoring, IT etc. have historically tended to be offshored. However, our data shows that as the regulatory burden increases on big pharma there is a perception that some of the first areas to be offshored, such as manufacturing and pre-clinical research, will be brought back due to compliance worries. There is a belief that the developed world understands compliance better and can show a competitive advantage that negates the cost efficiencies of offshoring. I think we will end up with only four or five truly large pharma companies and thousands of outsourced “providers” (in the shape of CXOs Universities, Biotech firms, Consultancies, etc.) working around, for and with them. If you look at the consumer sector you can see the extreme examples of this. For example around 97% of the market capitalisation of Coca-Cola is in the brand name, only 3% in assets, everything is outsourced. Pharma will not reach that extreme but is heading in that direction.
PT: Looking beyond recruitment, what other interests have you got?
NS: The first is a service offering, something we call Talent Lifecycle Services, which is helping Boards understand the target shape for their company and how to get their people there, which involves fun things like assessment, coaching, personal development and team building. Outside RSA I do some things in not-for-profit healthcare and also have an interest in a dermatology technology company, which is developing a therapeutic/functional fabric approach. I also have a busy family life and enjoy boats, fast cars, clay pigeon shooting and cooking for my close friends. Finally, I’m a big fan of reading and am fast approaching a full Kindle!
PT: Nick thanks very much and all the best for the continued success of your business.
About the interviewee:
Nick Stephens is CEO at RSA and, together with the Board, is responsible for the strategic direction of the company. He leads the development of the RSA business, driving the creation of new subsidiaries across the world and supporting the development of new value added services. As the business has grown Nick’s personal search work has reduced to the point where he only conducts three to five “C Level” searches each year, though he contributes to RSA searches across the globe wherever he can.
He has been a Director of RSA since 1986 and joined the business full-time in 1995. Before committing fully to RSA, Nick gained broad commercial experience in various roles in metals trading, healthcare, pharmaceuticals and the British National Health Service. He studied Law at the University of East Anglia and Business at Cranfield.
To contact Nick you can either send an email to nick.stephens@theRSAgroup.com or you can telephone +44 (0)1707 280813 .
RSA is a global leader in Executive Search and Interim Management to the Life Sciences sectors with offices in China, Germany, Singapore, Switzerland, UK and USA. For more details please visit www.thersagroup.com.
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