pharma: the sector’s growing commitment to digital · according to a recent ibm report, 90...

Pharma: The sector’s growing commitment to Digital

rr-0118-909008 - Digital in Pharma.indd 1 12-Sep-19 2:20:56 PM

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Pharma: The sector’s growing commitment to Digital

The digital wave has fully engulfed Pharma companies. Digital is growing in importance as a topic of strategic differentiation and business enablement. For the last several months, Russell Reynolds consultants Wolfgang Bauriedel and Maneesh Dube have met with digital and technology leaders at 10 of the largest global Pharma companies to understand how they are implementing and advancing digital capabilities at their organizations and the implications for business and talent.

BUSINESS

Technology, digital and data capabilities are increasingly intertwinedAs Pharma companies move aggressively on their overall digital strategy, their data, technology and digital functional capabilities are becoming increasingly intertwined. While, currently, the Chief Digital Officer (or Chief Digital and Information Officer) often defines and leads the digital strategy, it is important to note that a single transformation or digital leader is insufficient to drive an enterprise-wide transformation. The leaders of each of these functions – technology, data and digital – must be visionary and transformative and interface with their counterparts to drive a coordinated and systematic change in the organization. The leaders in these roles are viewed as business “Game Changers” that transform business operations as well as mindset and culture. As the scope and scale of digital, data and technology efforts expand, these roles are being elevated to the ExCo level in their organizations, as their activities are of key strategic importance.

� Data quality/integrity� Data governance� Data management

� New tools and applications (for internal and/or customer use)

� Ecosystem development

� Physical infrastructure� System standardization� Processes� Cybersecurity TRANSFORMATION

TECHNOLOGY

DATA

AI/MLAnalytics

Deep learning

Patient/provider

engagement

ProcessStandard-

ization

DIGITAL


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New revenue streams Pharma companies are looking to new technologies and digital tools to enhance existing and to add new incremental revenue. The approaches to and objectives of building such tools varies, but many digital programs start as pilots to enhance operational efficiency and cut costs. These can quickly evolve into consumer-facing, revenue-generating programs. Pharma players have also begun to experiment with building applications (often with a partner) for patient use. In addition to creating an important health resource or disease management tool for patients, these apps integrate the company with aspects of health management traditionally outside the purview of legacy pharma. In our conversations, we learned that the strongest digital tools and applications are designed leveraging existing technology infrastructure and tap into existing institutional data and expertise.

Selected examples of emerging potential new revenue streams for Big Pharma:

Struggling data effortsInnovation in both digital technology and the biological sciences is advancing at a furious pace, with the quantity of data generated growing exponentially. According to a recent IBM report, 90 percent of the data in the world was created within the previous two years1. Further, an IDC white paper that examined and predicted the makeup of future global enterprise data concluded that while healthcare currently has a smaller share of enterprise data compared to other industries, healthcare is primed to grow the fastest and is expected to surpass the media and entertainment sector and match the financial services sector by 20252. Pharma companies sit on a large portion of that data, and there is a wealth of information hidden within it regarding drug discovery and development, patient populations, patient outcomes, patient behaviors and commercial opportunities, among others. Business success today means pivoting from data-enabled to data-driven activity in order to operationalize and monetize this data.

In order to fully leverage this data and layer on new disruptive technologies like artificial intelligence (AI) and machine learning (ML), data must be interoperable, recent and of reasonable quality to be usable. The reality is that most organizations are still working on the foundation of organizing and connecting the data they already have and creating and consistently implementing processes to ensure that future-captured data is readily useable. The Chief Information Officer of a large Pharma company told us that they have 5,000 data sources in their organization. To capture data across these sources - not just once but repeatedly through a regular data refresh cycle - is itself a monumental achievement. In this context AI and ML solutions are difficult to scale and to provide the desired insight. There is more foundational work to be done.”

So�ware-as-prescription to provide FDA-approved tools prescribed by physicians to help patients manage, and in some cases, cure diseases

Leveraging new data, analytics, and AI and ML technologies to drive scientific biological innovation to identify and develop drugs at a pace that was not possible before

A future play for Big Pharma, HIPPA- compliant communication technologies that support the management of large patient populations and offer more frequent touchpoints for patients with their care providers

Digital therapeutics

AI-driven drug discovery

Virtual healthcare

At the organizations we recently spoke with, data foundational efforts include:

Migration to cloud

Democratization of data

Strong data governance

Data quality and recency

Master data management

External collaboration with partners whoare capable of sharing data and providingaccess to a digital ecosystem in the useand deployment of data

1. IBM 2017 Marketing Trends Report2. Seagate and IDC. Reinsel, Gantz and Rydning: The Digitization of the World From Edge to Core, 2018: https://www.seagate.com/

www-content/our-story/trends/files/idc-seagate-dataage-whitepaper.pdf


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Many Pharma organizations are aware of the current limitations of their data integrity and of operationalizing their data. All the executives we spoke with said their organizations are actively implementing new IT infrastructure, processes and retroactive data integrity programs to move the needle. These large data efforts are a step in the right direction, but still fall short of the enterprise-wide streamlining and unification of data assets required to truly transform the manner in which data drives the business.

While such transformation takes time, successful data milestones will be achieved more quickly by leaders with the requisite data expertise leading the effort. In the cases where we’ve seen the most success, Pharma companies have hired several leaders to drive data efforts, including:

“A Thousand Flowers Blooming”Many business leaders who are eager to leverage disruptive digital technologies have responded to what one Pharma executive described as “slow, centralized corporate digital initiatives,” by developing the digital capabilities of their own units. The positive side of this organic fostering of digital capabilities is that it allows companies to crowd-source internally for the best ideas. Now, as centralized digital efforts gain momentum and companies begin to develop comprehensive, organization-wide digital strategies, these disparate, unit-level digital initiatives face a challenge – will organizations abandon these initiatives in favor of a broader strategy or will they “capitalize on the entrepreneurial zeal” that launched them and bring them into their larger digital strategies?

Our observation is that most organizations are trying to integrate those early digital initiatives into the fold of the centralized digital strategy, but are encountering the organizational challenges that accompany change, testing the resolve of leadership. Leaders who are both technologically and organizationally savvy are key. Specifically, they should be able to identify and scale good digital ideas and be able to foster a culture of innovation throughout the organization, empowering every employee to believe that “action is close to me,” not far away in a corporate headquarter. By sourcing ideas from within, organizations inevitably have more enterprise-wide buy-in when centralized ideas are rolled out, since employees know that their voices are heard.

IN SUmmary:

Technology, digital, and data capabilities are increasingly intertwined

A “thousand flowers are blooming,” and many novel ideas and solutions are springing up within smaller business units as they a�empt to develop and implement digital solutions themselves

BUSI

NES

S CO

NT

EXT

The role of the CIDO is o�en seen as a “Game Changer” or culture and mindset transformation role

As a core strategic focus, the digital technology topic has been elevated to the ExCo

Talent with foundational data skills such as data governance, data management and data quality are in high demand

Leaders with portfolio experience and the ability to scale new ideas are essential

TA

LEN

T IM

PLIC

AT

ION

S

Many large data efforts are struggling

CHIEF DATA OFFICERThe leader who creates value from data; focused on data enablement and creating new products to generate new revenue streams

DIRECTOR OF DATA SCIENCEThe leader who creates usable data from unstructured data; can build, clean and analyze new and existing data pipelines

DIRECTOR OF ANALYTICSThe leader who turns data into decisions; focused on driving insights off of data and making that data more actionable for the business

PRINCIPAL DATA ENGINEERThe strategic leader who creates data platforms and structures; expertise in delivering enterprise-wide data transformation


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TaLENT

Pharma companies’ hiring strategies reflect the regional differences of the global digital talent pool As the demand for disruptive technologies grows, so does the need for talent. While no part of the world is left untouched by the emergence of disruptive technologies, there are clear, region-specific pockets of expertise emerging. Specifically, we have observed a talent gap between the global digital and IT talent in the US and the rest of the world. The regulatory environment in the US, in general, and the ability to make broad use of customer data, in particular, play a part in this talent-development phenomenon.

With this reality in mind, global companies are re-evaluating their location strategy to build digital hubs in regions where top talent already resides. Companies that are caught up in legacy decisions and are unable to refocus on talent hot spots are finding themselves losing the talent war. We spoke with an executive at a leading Big Pharma company who said that their company is shifting its regional balance in technology and digital leadership. Until recently, 70% of the technology and digital workforce was located in Europe. The new strategy will transition 60% of the digital workforce to the US.

Digital and technology talent is increasingly coming from outside of PharmaMore and more, Big Pharma is looking outside the sector to hire talent skilled in building, implementing and leveraging disruptive technologies. Our recent analysis of Chief Digital Officers (CDOs) at Big Pharma organizations found that only 25% of CDOs had previous experience working only in life sciences. We have seen this occur within other sectors as well. For example, the transportation, retail and hospitality sectors have each, over time, looked beyond their industries for talent as their commitment to digital innovation has grown. Hiring outside of the industry is essential to leveraging successful models that have already been tested and to adopting new capabilities and mindsets.


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LEaDINg Pharma comPaNIES – a 2019 ProfILE of chIEf DIgITaL offIcEr

The challenge for Pharma companies is to position themselves as employers of choice. In our recent conversations, two barriers were often cited. First, Pharma companies are not traditionally perceived as tech-savvy players, willing to make the risky investments that are required to build cutting-edge technologies. While this was true in the past, today most Big-Pharma companies have progressed. Second, there are huge cultural differences between Big Pharma and emerging technology organizations, with the former having a reputation of being rigid, risk-averse and hierarchical, which tends to be less appealing to Millennial digital talent. The good news is that many of the Big Pharma leaders we spoke to were well aware of this difference and are working actively to create less hierarchical, more nimble organizations that allow new digital and technology experts the room they need to explore, learn and fail fast.

� Mostly recent appointments show a trend to a newly-created CDO role or recent role evolution requiring new talent mandate

� In the last 2 years, a trend to external appointments (75% vs. 38%)

� Out-of-industry hires are growing increasingly common – predominantly from the consumer and technology sectors

C-SUITE REPRESENTATION RECENT HIRING TRENDSPROFILE AND ROUTE-TO-THE-TOP4 out of 10 leading pharma companies

have elevated Digital/IT to N-1 level – a standalone or combined C-suite role

More than half of Digital/IT leaders are external hires from CIO or digital roles

outside of life sciences

There is a trend towards bringing in a digital leader from outside of life

sciences, mostly from CPG and Tech

Digital/IT as a dedicated, standalone

function Digital/IT in combination

with additional responsibilities

No Digital/IT representation

at N-1 level

Current age: +/- 48 years on average

Tenure in the position: 2.4 years

Pre-appointment background

By tenure in the position

appointed to the current position

Internalpromotions:

40%

Externalpromotions:

60%

80% 20%

TOP 40PHARMA

23% 57%

20%

Source: RRA-proprietary research on the career paths of 20 Digital/IT leaders (N-1 and N-2) at multinational pharma companies; status July 2019

Life Sciences Only

in the last2 years

between 2 and 5 years

more than5 years

Outside

CIO

Digital role

25%

60%

35%

5%

33%

67%

75%

58% of external hires comefrom outside of life sciences

Omni-channel, digital marketing,customer experience, similar

Lidia Fonseca, CDTO at Pfizer (1/2019)former CIO at Quest Diagnostics

Jim Scholefield, CIDO at Merck & Co. (10/2018) former CIO at Nike

Bertrand Bodson, CDO at Novartis(1/2018) former Chief Digital andMarketing Officer at Sainsbury's Argos

The most important element working in favor of the sector is the mission and the opportunity to produce meaningful, positive impact for humanity. In particular, Millenials are seeking opportunities for human impact, and the sector has inherent appeal which it must find ways to leverage fully


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Evolving role from “Technologist” to “Game Changer”In this time of rapid transformation, Big Pharma is asking much more of its technology experts than it has in the past. Within the last few years digital and technology topics have been elevated to the ExCo and board levels, and the scope of the CDO role has expanded to encompass essentially every aspect of the business. Where previously a top-notch technologist or IT professional would do, today this leader must also be a visionary with an informed and bold perspective on the future. They must be capable of taking actions today that will set the organization up to thrive in the technology and healthcare landscapes of tomorrow. The head of digital and technology must also be commercially astute: able to translate digital innovation into revenue and shareholder value. Finally, this leader must be a change agent who is able to leverage the excitement of change and transform culture and mindset, all the while managing unpredictability and successfully ushering the organization on its path forward. This skillset is a departure from the profile of the typical Pharma CIO or IT leader of the past. In today’s talent market, we identify three key archetypes of digital technology leaders.

DIgITaL TEchNoLogy LEaDErS – archETyPES

The next generation of digital leaders is emerging, but they need the space to experiment and thrive, and this requires the unflinching support of top leadership. Do today’s digital leaders have that support? In many instances they don’t, but a wave of new hires in senior technology and digital roles suggests a growing commitment to innovation and agility within Pharma’s digital organizations. Today, turnover in senior technology and digital roles is highest amongst C-suite roles. As Pharma companies experiment, so do the new hires.

� Brings 360-degree perspective

� Commercial DNA� Draws together the

technology and commercial functions

� Driving demand� Acquisition, conversion

and retention� Customer experience� Builds bridges between

customer and front-end technology

� Brand and content marketing � Performance marketing

(SEO, PPC, SEM)� P&L management � Data, insight and analytics� CRM, loyalty, net promoter

score� Product management

(UX/UI)

� Integrates front/back-end technology and legacy/new platforms

� Virtualization; cloudification

� Automation; innovation� Driving conversion

� Product development/ management

� Mobile and web techology development

� Data, insight and analytics� Platform engineering� Program management� Technology architecture

� P&L mindset/management� Prevention of primary and

secondary employee culture

� Technology agility for digital needs

� Engineering culture� Platform and technology

architecture

� Physical infrastructure� System standardization� Processes� Cybersecurity

IMPACT

DIGITAL LEADER TECHNOLOGY ENGINEERING

SPECTRUMOF COREEXPERTISE

CHIEF DIGITAL OFFICER/MULTICHANNEL LEADER

HYBRID: CHIEF DIGITALAND TECHNOLOGY

OFFICER

CHIEF INFORMATIONOFFICER/CHIEF

TECHNOLOGY OFFICER


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© Copyright 2019, Russell Reynolds Associates. All rights reserved.

Russell Reynolds Associates is a global leadership advisory and search firm. Our 450+ consultants in 46 offices work with public, private and nonprofit organizations across all industries and regions. We help our clients build teams of transformational leaders who can meet today’s challenges and anticipate the digital, economic and political trends that are reshaping the global business environment. From helping boards with their structure, culture and effectiveness to identifying, assessing and defining the best leadership for organizations, our teams bring their decades of expertise to help clients address their most complex leadership issues.

www.russellreynolds.com.

gLoBaL offIcESamericas

ɳ Atlanta ɳ Boston ɳ Buenos Aires ɳ Calgary ɳ Chicago ɳ Dallas ɳ Houston ɳ Los Angeles ɳ Mexico City ɳ Miami

ɳ Minneapolis/St. Paul

ɳ Montréal ɳ New York ɳ Palo Alto ɳ San Francisco ɳ São Paulo ɳ Stamford ɳ Toronto ɳ Washington, D.C.

EmEa

ɳ Amsterdam ɳ Barcelona ɳ Brussels ɳ Copenhagen ɳ Dubai ɳ Frankfurt ɳ Hamburg ɳ Helsinki ɳ Istanbul ɳ London

ɳ Madrid ɳ Milan ɳ Munich ɳ Oslo ɳ Paris ɳ Stockholm ɳ Warsaw ɳ Zürich

asia/Pacific

ɳ Beijing ɳ Hong Kong ɳ Melbourne ɳ Mumbai ɳ New Delhi ɳ Shanghai ɳ Singapore ɳ Sydney ɳ Tokyo

WoLfgaNg BaUrIEDEL is a member of the firm’s Technology Sector and works across all industries, with a particular focus in healthcare. He is based in Boston.

maNEESh DUBE is a member of the firm’s Technology Sector and Pharmaceuticals and Biotechnology Practice. He is based in New York.

LaUrEN mccoUrT is a member of the firm’s Healthcare Sector and HealthTech Practice. She is based in San Francisco.

aUThorS

IN SUmmary:

Pharma companies’ hiring strategies reflect the regional differences of the global digital talent pool

Evolving role from “Technologist” to “Game Changer”

TA

LEN

T C

ON

TEX

T

Organizational structures and physical locations are changing to take advantage of these pools

Pharma has a stellar purpose and mission statement and needs to strategically position their story to prospective talent

Digital leaders have disruption in their DNA, and organizations not ready or not able to operationally, culturally and structurally support the sweeping changes “Game Changers” seek to make will remain behind in their transformations relative to peersO

RG

AN

IZA

TIO

NA

L IM

PLIC

AT

ION

S

Digital talent is increasingly comingfrom outside of Pharma

In closingBig Pharma companies have clearly begun their digital journeys. They need digital and technology leaders with the organizational, technological, and commercial acumen to take them along the way. The sooner companies in this sector build organizational structures that nurture digital innovation and cultivate cultures that attract digital talent, the sooner they can create value and win in the marketplace.


pharma: the sector’s growing commitment to digital · according to a recent ibm report, 90...

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