Life Sciences and Healthcare Services

Faced with an industry crisis primarily caused by drying up development pipelines and rising cost structures, several of the major pharmaceutical companies are adopting new business models, and in that process are seeking fresh leadership talent to implement these changes.

With the baby boomers ready to retire, however, the leadership talent pool looks set to shrink in the near future. Looking ahead, the world’s major players in the industry are tackling this problem in a number of ways. Some corporate boards have hired senior talent from very different industrial backgrounds, initiating them in the pharmaceutical industry in significant line or divisional leadership roles, thus offering them career opportunities and development plans that may lead to the top job.

Our new publication “Big Pharma’s New Leadership Models” examines these new leadership models in greater detail. The following three trends in recruiting for the top job are emerging:

I. Youthful Insiders: these candidates offer pharma experience and fresh perspectives

II. Unusual Insiders: industry players with functions that do not typically lead to the corner office (for example, CFO or general counsel)

III. Youthful Outsiders: Young leaders from outside the industry who are given a senior leadership platform on a pharmaceutical business or division and then quickly promoted to CEO.

Although executives aged 50+ from other industries rarely get the top job, we expect the Experienced Outsider model to become increasingly popular in the future. This model would offer the industry the benefit of an established leadership record plus the advantage of outsider insights.

While the risk in all of these models is high, the need to create a talent bench is equally urgent. The toughest challenge is undoubtedly the evaluation of talent. Although these new models expand the pools of possible CEO candidates, they undoubtedly call for more diligent assessment on the part of corporate boards. Finally, if pharmaceutical companies really wish to transform their business models via leadership, they must be prepared to engage in ongoing and effective succession planning.

For further insight, download the first issue of "Big Pharma’s New Leadership Models" published by Egon Zehnder International’s Life Sciences Practice.