Corporate Management
The key element in developing a shared purpose is mutual trust. Without trust, people will engage in all kinds of self-centered behavior to assert their own identities and influence coworkers to their own ends. Under these circumstances, they just won’t hear others, and efforts to develop a shared vision are doomed. Nothing destroys trust faster than hard box attitudes toward problems that don’t require such treatment.
–David K. Hurst. From Harvard Business Review (May-June, 1984, p. 85).
Good ideas and good products are a dime a dozen. Good execution and good management—in a word, good people—are rare.
–Arthur Rock. From Harvard Business Review (November-December, 1987, p. 63).
COMMUNICATING WITH AND INFLUENCING OTHERS
Nonscientists are usually unable to fully understand the detailed work of most highly technical specialists (e.g., computer programmers, scientists). Some specialists, therefore, claim that nonscientists cannot really understand their work. This statement should not be accepted by nonscientists, regardless of whether they are managers or have other positions. Every scientist should be able to explain the nature of his or her projects, goals, strategies, and other issues in simple and clear terms that any educated individual can understand. When a scientist retreats into jargon, it is a statement that the speaker does not truly want to communicate with the listener or that the speaker is unable to do so. Many scientists who are unable to communicate effectively with nonscientists are also unable to communicate with other scientists. In dealing with such scientists, managers must adhere to good manners, which means that they should not give offense unintentionally.
Why Do Nonscientists Sometimes (or Often) Have Difficulty Communicating with Scientists about Scientific Issues?
A wide gulf often appears to exist between the thinking of scientists and nonscientists. There is much more to explain about the gap between scientists and nonscientists than to state merely that their training is different and nonscientists are not trained in the scientific method. One important difference between these groups may be illustrated with an example.
Cause and Effect Exercise: Contingency Table Example
Assume that a particular disease is either present or absent in people. The disease appears to be associated with a particular symptom. The question to consider is whether the symptom and disease are truly related. Experimental data obtained from an investigation of this association will fit four categories.
These four categories are:
Patients in whom both the disease and symptom are present
Patients in whom the disease is present but the symptom is absent
Patients in whom the disease is absent but the symptom is present
Patients in whom both the disease and symptom are absent (this example is also referred to as a two-by-two contingency table)
It is common for nonscientists to rely primarily on information in the first category when reaching a decision as to whether there is a relationship between the disease and symptom, especially if the numbers in the first category are much larger than in other categories. This approach is incorrect. People who only pay attention to two (or even three) of these categories may also be misled in their conclusion. For example, if more people with the disease lack the symptom than have it, nonscientists may conclude that there is no association between the two. Scientists are taught that a valid conclusion may only be reached by considering all four of these categories. Statistical techniques can readily compare relative proportions in all four categories to arrive at a conclusion of whether there is an association and how strong it is.
Example of Bias Influencing a Cause and Effect Interpretation
Another important reason why scientists and nonscientists may interpret information differently is that scientists are taught to be skeptical because of the many types of bias that may enter an experiment or clinical trial. Many subtle (or obvious) types of bias may greatly affect the design, conduct, analysis, and interpretation of an experiment or clinical trial. We have all heard many examples of data that suggest one interpretation, only to be told later about a previously unsuspected bias that greatly
affected that interpretation. As an example, “In 1978, a Los Angeles study was released that showed that persons living in areas where jet plane noise was greater than 90 decibels had a significantly increased death rate.” The popular press got some mileage out of this: Time magazine headed its article “Sonic Doom—Can Jet Noise Kill?” Shortly thereafter, the study was published in a scientific journal, where its merits could be more closely examined. The strong possibility of a secondary association was raised by the fact that people who live in the devalued housing close to airports are often poorer, older, or otherwise different from the general population. A subsequent study reanalyzed the data from Los Angeles and controlled for the confounding effects of age, race, and sex. When those differences were taken into account, jet noise was found to have no effect on mortality (Michael, Boyce, and Wilcox 1984). A more detailed discussion of biases is given in Guide to Clinical Trials (Spilker 1991).
affected that interpretation. As an example, “In 1978, a Los Angeles study was released that showed that persons living in areas where jet plane noise was greater than 90 decibels had a significantly increased death rate.” The popular press got some mileage out of this: Time magazine headed its article “Sonic Doom—Can Jet Noise Kill?” Shortly thereafter, the study was published in a scientific journal, where its merits could be more closely examined. The strong possibility of a secondary association was raised by the fact that people who live in the devalued housing close to airports are often poorer, older, or otherwise different from the general population. A subsequent study reanalyzed the data from Los Angeles and controlled for the confounding effects of age, race, and sex. When those differences were taken into account, jet noise was found to have no effect on mortality (Michael, Boyce, and Wilcox 1984). A more detailed discussion of biases is given in Guide to Clinical Trials (Spilker 1991).
How Can Nonscientists Evaluate Medical Claims?
The most widely accepted answer to this common issue is that nonscientists must consult trusted scientists or clinicians who are knowledgeable in therapeutic areas of interest. If the professional evaluation received is not satisfactory to the nonscientist, then it is useful to obtain a second opinion. This second opinion may be obtained from an individual, committee, or task force from inside the company. If the question has major implications for a company, then it may also be useful to involve outside consultants.
Dividing Work between Two Sites in an Organization
Two (or more) semi-independent research and development sites of a company may each (a) duplicate work of the other group, (b) have totally separate functions or areas to study and work on, or (c) have some overlap in their assigned areas and functions. Although there is not a single best approach for all companies to use in dividing work between two (or more) sites, it is necessary that the missions of each group be clearly established and known by all relevant people. For example, drug discovery research could be handled in several ways. This research could be conducted at only one site. Research in certain therapeutic areas (e.g., on parasites and bacteria) could be conducted at one site, and all other research could be conducted at a second site. Another possibility is that some or all research could be contracted to universities. In deciding how to divide the total research and development effort between two sites of one company, it is important to consider that certain groups of people may perform specific activities better than other groups and that people are generally much happier doing what they do best. A related issue is deciding which activities should not be conducted in-house and which of those activities should be contracted to universities, consultants, or independent contract houses.
Techniques Used by Managers to Influence Others
Basic approaches to exerting influence on others include using the following techniques: (a) authority, (b) bargaining, (c) persuasion, and (d) intellectualizing and informal discussion.
In choosing one or more of these approaches, there are several factors that a manager should weigh. As one moves from considering techniques that utilize pure authority (point 1) to pure intellectualizing (point 4):
It takes more time to use the procedures
The vulnerability of the manager increases
The impact on subsequent behavior increases
The flexibility of how the approach is used tends to increase
Resentment in the listener tends to decrease
The quality of the other’s performance after the discussion tends to increase
In using one (or more) of these approaches to influence someone, it is important to understand and use the sources of one’s power or ability to influence. These can be summarized as:
Rewards. This category is not meant primarily as monetary or material rewards but includes such benefits as (a) sharing information, (b) introducing the other person to “important” individuals, (c) praising the person to others, and (d) writing positive comments and statements about the individual in reports.
Punishment. Similar concepts apply as for rewards, although with the opposite approach.
Expertise. This includes not only technical knowledge, but also the knowledge of how to accomplish tasks in the organization and knowledge of the proper sequence of activities to follow.
Legitimacy. This derives from one’s position of being higher in an organization compared to another person.
Interpersonal skills. The power of one’s personality may be the only means available to influence others.
Improving Communication
It is important for relevant people to have the most complete and accurate information possible. One alternative to accurate information that unfortunately occurs is that people create their own stories, fleshing out areas where information is skimpy or absent. During periods of early discussions on ultra-secret negotiations, it is important to either keep the topic 100% secret or keep essential people fully abreast of the current status. While plans are being developed, it is likely that gossiping and rumors will occur. This leads to people hearing incorrect or distorted information, which in turn may lead them to become upset and to criticize negatively other people in the company. Sometimes, it is worth initiating a rumor of a planned decision or action to determine what reactions it engenders. This practice is commonly used by senior managers and executives.
One easy means of improving communication within a company is to send important memos and reports to all people who should have the information. Spreading information not only builds goodwill, but it also prevents others from having to try and obtain the same information for themselves. In addition, it often leads to greater efficiency and helps prevent misunderstandings. The downside of spreading confidential information to those beyond the core group who must have it is clear as well. This is the constant conflict in deciding whether to send information only to those who “need to know” or whether to include some or all of those who would find it “nice to know.”
Replacing Meeting Minutes with a List of Action Points and Points of Agreement
Another easy means of improving communication is to keep a list of action points and points of agreement at meetings. Formal minutes of most meetings are rarely referred to or used. Action
points state what is to be done and who has the responsibility for doing it or leading the effort. Follow-up of these points at future meetings can usually be handled easily and efficiently. At the end of any meeting, the chairperson or another person should review major points of consensus (agreement) and major items to be dealt with in the future. Other means of enhancing communication are discussed in Chapter 22.
points state what is to be done and who has the responsibility for doing it or leading the effort. Follow-up of these points at future meetings can usually be handled easily and efficiently. At the end of any meeting, the chairperson or another person should review major points of consensus (agreement) and major items to be dealt with in the future. Other means of enhancing communication are discussed in Chapter 22.
MANAGEMENT MODELS AND STYLES
Before discussing management styles that are particularly appropriate for the pharmaceutical industry, it is worth mentioning some of the basic approaches and models of management presented in recent years. A few representative systems are mentioned to show the variety in styles that may be conceptualized and to illustrate that several authors have tried to boil down a great deal of information to a few simple concepts. These systems have the advantage of being easily understood, although that understanding does not on its own enable managers to change their beliefs or basic approach easily. In fact, it is amazing how many managers are unable to recognize their own style after reading one of these books, even when their style is transparent to many others.
The Spectrum from Autocratic to Committee Styles
Many managers’ styles may be viewed as lying at one or more places along a continuum from autocratic/dictatorial at one end to a democratic committee approach at the other end. Some of the other styles that may be described along this spectrum are:
Passive consultation. Where a manager passively listens to colleagues’ and others’ views, if offered, before reaching a decision.
Active consultation. Where a manager actively seeks ideas and input from others before reaching a decision.
Consensus management. Where a manager actively seeks ideas and input from others and also ensures that discussions continue until a general consensus is reached about the most appropriate decision.
A single manager or committee may function along the lines of two or more of the styles mentioned.
When a manager is promoted to a new position, it is important for that person to take the necessary time to learn about the style and desires of those who interact with and are influenced by that person. Failure to do this has led many new managers into serious difficulties, regardless of their personal style. Additional issues arise when a manager’s style differs markedly from that of a predecessor. This may be an advantage but often raises more caution signals for the manager to heed.
Four-dimensional Model
Due to the many managerial styles and approaches, writing management books is a highly developed cottage industry. The book Improving Productivity through People Skills by Lefton, Buzzotta, and Sherberg (1980) describes four styles of management. These are autocratic, unassertive, easygoing, and collaborative styles and are based on two scales: warmth to hostility, and submission to dominance. This system describes management styles in terms of “Q’s,” a shortcut system used to describe complex concepts.
Social Style
Four social styles (analytical, driver, amiable, and expressive) are described in the book Social Style/Management Style: Developing Productive Work Relationships by Bolton and Bolton (1984).
Other Management Styles
Other management styles, approaches, and models range from focusing on a “hard” rationale using elements such as structure, people, tasks, strategies, and decision processes to those that focus on a “soft” intuitive model using elements such as roles, groups, networks, rewards, shared vision, and common purpose. Hurst (1984) describes each and shows that both hard and soft approaches are necessary in a company and may be combined to work more effectively.
A large amount of material has been written about advantages of the Japanese approach to management. Their approach is briefly and succinctly presented by Tsurumi (1982). He stresses the “human side of labor” and stresses that American managers have focused on the wrong methods of improving productivity. The correct approach according to Tsurumi is an easy one to utilize, and his brief article is highly recommended.
Measuring One’s Leadership Skills
There are many books and articles about differences between leadership and management (Geneen 1984; Bennis and Nanus 1985) and how an individual can easily measure his or her own leadership skills (Martin 1985). One example is shown in Fig. 20.1. This simple test may be taken by individuals who wish to rate either themselves or the effectiveness of others. A summary of characteristics of leaders and managers is given in Table 20.1. Commonly encountered relationships of leaders to the group they lead are shown in Fig. 20.2. The potential scenarios shown in Fig. 20.2 become much more complex when multiple leaders are involved, as well as when other factors that influence a group and its leader are considered.
Boards of Directors
Boards of directors of pharmaceutical companies primarily deal with major business issues and allocation of resources. Their members are often chosen because of their knowledge about such matters; however, they should also be instructed in the methods, concepts, and issues of drug discovery and development because these groups must make important decisions about many scientific and medical issues. Therefore, representatives of both science and drug should be members of the board. It is not sufficient to have only scientists on the board of directors, since most scientists do not adequately understand medical aspects of drug development or the thinking processes of physicians. Having ad hoc members is also a way of addressing this matter. The management styles of boards of directors vary along the spectrum described earlier in this section of autocratic rule by the Chair [or the Chief Executive Officer (CEO)] to serving as a democratic committee that seeks consensus on all major issues.
Entrepreneurship and Intrapreneurship in the Pharmaceutical Industry
The term entrepreneurship has become a widely used buzzword in all industries. It is difficult to find a current journal on management techniques that does not discuss entrepreneurship. Two representative articles are by Stevenson and Gumpert (1985)
and Shays and de Chambeau (1984). Within the pharmaceutical industry, some departments tend to form and develop around successful scientists. This is clearly an example of entrepreneurship, especially when a department’s function partly or completely overlaps with that of an already existing department.
and Shays and de Chambeau (1984). Within the pharmaceutical industry, some departments tend to form and develop around successful scientists. This is clearly an example of entrepreneurship, especially when a department’s function partly or completely overlaps with that of an already existing department.
 Figure 20.1 A scale to measure leadership practices. (From Martin WB. Are you a manager or a leader? Industry Week. 1985;224:93-97 with permission of Penton Publishing Company.) |
 Figure 20.1 Continued |
The Burroughs Wellcome Company was a large pharmaceutical company, which evolved to the point approximately 20 years ago where it had a small research group within the larger research division that actually duplicated numerous research and development functions (e.g., synthetic chemistry, biological testing, metabolism, pharmacology, and even toxicology). This group, headed by Dr. Gertrude Elion, was remarkably productive and successful as an intrapreneurial activity. This approach probably would not work at all pharmaceutical companies. If this approach
is utilized today, it could most easily either focus on one scientific discipline (e.g., biochemistry) or on one therapeutic area (e.g., psychiatry) where several disciplines are represented.
is utilized today, it could most easily either focus on one scientific discipline (e.g., biochemistry) or on one therapeutic area (e.g., psychiatry) where several disciplines are represented.
Table 20.1 General characteristics of managers and leaders | |||||||||||||||||||||
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 Figure 20.2 A leader’s relationship to his or her group. The reasons for problems in Panels B through H may be that the leader is out of touch with his or her group, is unable to control it, has lost interest in some or all of the group, or another reason. The arrows are the direction of movement. Three arrows are used to show rapid movement and a short arrow is used to depict slow movement. |
It takes a special talent to function as an entrepreneur or an intrapreneur in a pharmaceutical company. Whereas artists are often characterized as dreamers and workers as doers, entrepreneurs may be thought of as people who are both dreamers and doers. They want their ideas to be tested and to succeed in the real world of patient care. They are not the types of scientists who are always saying “let’s study it further.”
Most pharmaceutical companies that believe the entrepreneur concept has value understand that there can only be a small number of entrepreneurs. The entrepreneur primarily functions either as an individual or as leader of a small group, whereas to get drugs developed efficiently, it is necessary to have mostly “team players” working in synchrony. This concept of intrapreneurs is discussed in greater detail in Chapter 16.
Individualists in the Pharmaceutical Industry
Some individualists in pharmaceutical companies are not entrepreneurs and create problems within a pharmaceutical company. Each company desires to have individualists who have a positive influence within the organization, as well as have team players. Individualistic scientists who vigorously attempt to opt out of the drug discovery process by refusing to screen drugs and/or who are unwilling to participate in drug development are often counterproductive to achieving the company’s goals. These scientists usually define their role in industry solely in terms of their own freedom, professional career, and reputation. Many people believe that this type of scientist does not belong in the pharmaceutical industry and would function more effectively in an academic environment where being a team player is usually less important.
Different types of project teams exist in drug discovery and development, depending on the nature of the task and the professional discipline or department of the members (see Chapter 15). Keidel and Umen (1984) describe different teams in terms of analogies to baseball, football, and basketball. They point out various management issues relating to the team’s function.
APPROACHES TO MANAGEMENT
A number of basic characteristics and issues relating to management are described.
Are the Right Questions Being Asked?
An important issue to consider is whether managers are asking the most appropriate questions to help meet a company’s needs and goals. If only partially correct questions are asked or the questions asked are not phrased properly, then even the best obtainable answers may be irrelevant to address the most important company issues. Thus, it is essential to ensure that the questions asked are the correct ones and to discuss relevant assumptions and definitions before embarking on the quest for the answer. If assumptions and definitions underlying a question are not clear and especially if the question is not explicitly stated, then the exercise may be destined for failure from the outset. The abilities to (a) pose the best questions, (b) have the right timing, (c) interpret data appropriately, (d) not procrastinate, and (e) reach the best decisions all depend on the quality of pharmaceutical company personnel. One reason why the specific questions asked are so important is because a great deal of time and effort are spent by many employees on analyses, reports, memoranda, meetings, and information gathering that are all designed to answer questions posed by managers and senior executives.
Is the Problem Real, and Does the Question Need to Be Asked?
The problems a company tackles may be real, potential, or imagined. Potential problems have a greater or lesser probability of occurring. Some of them are clearly important for a company to deal with, but many others waste valuable resources and time. Real problems must be assessed for their importance and urgency, while potential and imagined problems must be identified as such and carefully discussed before allocating resources to their solution.
It is important and often essential to ask whether or not a question need even be asked. Alternative means to obtaining answers sometimes exist. For example, if a clinical group is intending to initiate a study to answer a well-phrased specific objective, it must be determined whether the data already exist in a company’s archives or elsewhere (e.g., a government archive). In verbal communication, the tone in which a question is asked is also important to determining the answer obtained.
The Multiplier Effect: Requests from Senior Executives
All managers and committees throughout an entire company from the board of directors down pose questions and ask for information. One difference between a question or request posed by a CEO and a manager of a small group at a low level in the company is that there is a large multiplication effect when the question is posed by the CEO or senior executive. This is analogous to a model of moving gears. If the largest gear on top of a pyramid of gears (i.e., CEO) moves one notch (i.e., raises a minor point or question), a number of his lieutenants’ gears move several notches in the amount of activity they conduct to review the question, in the decisions they make on how to delegate work to answer the question, and then in the process of actually delegating the work. Each of their movements of several notches is sufficient to move the gears of a larger number of workers below them through a complete rotation (of gears), and so on, until many levels lower in the organization, the people, who are doing most of the actual work to address an important (or idle) question or request, are scurrying around, sometimes frantically. Moreover, people often temporarily stop work on important projects to work on the senior executive’s question that is usually of far less importance to the company. Managers who are at a lower level in a company do not generally create a major multiplier effect, except in a limited way with their subordinates.
Quality of Management
In situations where managerial competence is good at senior levels and poor at lower levels, much of a company’s work is often not implemented or conducted properly and many problems are not appropriately solved. There are also situations where the quality of management and decision making is poor at upper levels and excellent at lower levels. If leaders do not mandate that their subordinates follow their bad decisions, this situation may be compensated for by having an excellent staff. If leaders take a company in an undesirable direction, however, then even
the best staff in the world may be unable to correct this error. Two examples of bad directions include:
the best staff in the world may be unable to correct this error. Two examples of bad directions include:
Diverting a company’s resources too widely away from the core business, especially to areas where little expertise is present and where the company may become too widely dispersed either geographically or in the number of businesses pursued
Concentrating a company’s resources too heavily in a narrow area of drug discovery and development, which makes the company vulnerable to unexpected changes in the marketplace and to changes in medical practice
These relatively extreme, but opposite, approaches to management are reminiscent of the Japanese board game of “Go.” In this game, too strong of either a defensive or offensive posture usually leads to weaknesses in one’s position and to eventual defeat by one’s opponent.
Functions of Management
Many functions served by management vary between different levels in a corporation. While individuals on several levels deal with generally similar or identical issues, conflicts often arise when a group attempts to deal with the functions of another group. Some major functions of management are shown in Table 20.2, with a focus on research activities. The major group(s) usually responsible is (are) also indicated.
Management of Subsidiaries
Ideally, each subsidiary should be managed according to a plan or strategy that is tailored to that subsidiary. Adopting a single approach to all subsidiaries of the same type, however, may force some of them into uncomfortable and ineffective ways of conducting business, not to mention creating strains between the groups involved. Nonetheless, adopting a single management approach and style for managing subsidiaries is usually easier than creating a series of styles for different subsidiaries of the same type and importance to the overall company.
Table 20.2 Some major functions of management | |||||||||||||||||||||||||||
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