Could Pharma Use a Dose of Paranoid Leadership?

I took time this morning to listen to a podcast interview with MIT Sloan professor Steven Spear on what characterizes “high velocity” organizations. (Spear is the author of “Chasing the Rabbit: How Market Leaders Outdistance the Competition,” and a new book called "The High-Velocity Edge".) Such organizations, Spear says, are able to effect dramatic improvements within extremely short windows of time. Spear uses the examples of Toyota in its early days, as well as the U.S. Navy during the first days of nuclear submarine manufacturing, as organizations that managed to dramatically improve their quality and performance in very short periods of time.

The common thread between the two examples, according to Spear? Paranoia—an excessive fear of extinction. For Toyota in the 1960's, it was a paranoia that the company would go belly-up unless it could compete with what were then the best auto manufacturers in the world in the U.S. and Europe. For the Navy’s nuclear sub builders, it was paranoia that any incidents or accidents whatsoever would rile the American public and essentially cut off funding and government support for the program.

Paranoia, if it is to be a helpful, motivating factor, must be deeply felt within the leadership of the organization, Spear says (around minute 7 of the interview, if you'd like to jump ahead).

Two other qualities that characterized Toyota’s era of high-velocity achievement? Humility and optimism. A culture of “arrogant pessimism” is organizational suicide, Spear notes. “What’s very hard to do is get managers into the mode of discovery, to say, ‘We have to be humble and optimistic about this, and I’m the one who’s going to start by saying that the mission-critical processes that I support aren’t nearly as good as they might be. Starting today, I’m going to try to find out what impedes people to succeed in the work they do. And when I find that out, I’m going to work with those people to figure out what we can do to generate less impediments and more value every day.' ”

Granted, these two examples relate to organizations in their formative years, but could GSK, J&J, and other drug companies learn from Spear, and benefit from a bit of management paranoia?

--PWT

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