Editor's Note: This article was excerpted and adapted from “Pharmaceutical Operations Management: Manufacturing for Competitive Advantage,” a new book now available from McGraw-Hill.
Drug companies today must focus on productivity. In order to differentiate themselves in a complex, ambiguous and dynamic business environment, they must continuously or radically enhance manufacturing metrics throughout the pharmaceutical process life cycle (Figure 1, below).
|Figure 1. Process life cycle management. Click here for larger, legible image.
Customer focus is an essential part of manufacturing productivity. The concept of a “balanced scorecard,” advanced by Kaplan and Norton, encompasses four perspectives: learning and growth, internal, customer and financial issues.
Customer focus drives higher product quality and lower cost. Manufacturers who understand customer needs can implement a robust process design, in which quality is “built in.” They can also focus on reducing variability and improving productivity.
Knowledge is the fundamental productivity metric. Leadership is another pre-requisite. Today, leaders are challenged to develop a “win-win” partnership with employees. Their business should provide a fertile ground for maximizing each individual’s potential and should also create a sense of “ownership” among employees, maximizing their commitment to the company’s success.
Competitive advantage comes from the effort that workers put in that is above and beyond “just doing their job.” If experienced operators identify ways to improve robustness in the operation, they aren’t required to share it with management. “Walking the extra mile” cannot be forced by leadership. Employees provide it at their discretion, and if they choose to give it often enough, it gives any enterprise an awesome amount of power to improve.
How can this kind of environment be created within your organization? “Transformational” leadership is needed. Transformational leaders transmit a sense of mission, stimulate learning experiences and inspire new ways of thinking. At the same time, they must be able to understand how change affects people both within and outside the organization.
Both hard and soft skills are required. Analytical intelligence is a prerequisite, and is typically acquired through education, training and experience. As manufacturing systems become more complex and the business environment more challenging, any organization’s success depends on a firm knowledge of systems and analytical methods.
Analytical intelligence has three components:
- Understanding of basic analytical tools and methodology;
- Systems thinking capability;
- The ability to take “deep dives.”
Basic analytical tools allow transformational leaders to take a data-driven analytical approach to problem solving. But this is not enough. Such leaders must also be capable of “systems thinking,” to communicate, learn and act more effectively in a complex, ambiguous and dynamic climate. Systems thinkers use a data-driven scientific framework to approach complex situations, to uncover and model generic patterns for learning and optimization.
At the heart of the systems approach is the idea that the system is more than the sum of its parts, that it has its own unique properties, which belong to the system as a whole and cannot be replicated simply by adding up its component parts. These unique properties are the result of various systems and subsystems.
Transformational leaders engage analytical intelligence, in analyzing complex manufacturing operations on a day-to-day basis. They design performance metrics in a hierarchical form: day-to-day and plant operational data, composite control charts, multiple plant metrics and global business metrics. They can gauge the health of the business by diving deep into the sea of data around them, and use the resulting knowledge to advance the business.
They should have a well-balanced understanding of the manufacturing system so that they can communicate effectively with people at various levels of the organization, and unravel innovative approaches at each level that meet the organization’s needs. The ability to understand and appreciate technical challenges and to package them into business-aligned objectives is the key to success. Such leaders command respect, they don’t demand it.
Transformational leadership requires a sense of mission, vision and strategy. Mission answers the question “why do we exist?” Vision defines the ultimate goal: “who do we want to be?” while strategy sets the direction to achieving the vision.
Visionary leaders create a mission worth striving for, a vision that is achievable and a strategy designed to optimize return from financial and human capital. They then develop a strategy to translate mission, vision and core ideology into action.
Leaders create alignment to preserve the core and stimulate progress, and to eliminate activities that drive the organization away from its core ideology and impede progress toward the envisioned goal.
Transformative leaders also have emotional intelligence, and are able to connect and resonate with others. Critical factors are self-mastery, people mastery and enterprise mastery. Self-mastery includes clarity of purpose, vision, planning reflection and feedback. Transformational leaders are engaged in the lives of people in their organizations, encouraging personal growth, feedback, continuous learning and mentoring. The most successful transformation initiatives are fostered by leaders who are committed to their own self awareness or personal mastery, and to assisting others in achieving the same mastery.