Crisis – the Opportunity

By Paul-André de Lame, Anabase International Corp.

The current economic crisis is on everyone’s mind, even though the healthcare sector seems to be weathering the storm relatively well.

“True restructuring is necessary for many reasons, and none are critically related to the current economic crisis”
-Paul-André de Lame

After all, our individual and collective health concerns are neither better nor worse because the financial system of the world is falling apart. It would be delusional to believe that the economic crisis is the most prominent force driving the restructuring of manufacturers of pharmaceuticals, biologics and medical devices. Likewise, it would be shortsighted to believe that any restructuring can succeed if it is limited to a change in the organization chart.

Historically, major restructuring occurs for corporate financial reasons, and is geared toward improving company productivity. Restructuring results in major stress to the company as a whole and to each employee. Faced with stress, it is normal human behavior to seek reassurance by adhering to well-known, seemingly ‘proven processes’. Yet, these time ‘proven processes’ were developed based on an existing structure of personnel and organization that restructuring destroys. Holding fast to such ‘proven processes’ is not the logical path to increased output, maintained quality, and a true increase in productivity, as the required resources are no longer in place.

One common solution is an increased reliance on outsourcing. In this context, outsourcing has many faces. Former employees who were just let go are re-hired as independent consultants to perform their same previous tasks. Established experts are engaged to assume the tasks defined in the pre-established standard operating procedures, supplementing the remaining workforce. Also, entire functions (such as data management) are farmed out to companies that replicate established standard workflows. None of these approaches fosters true change.

This type of restructuring, aimed at reducing headcount and related costs, is not conducive to challenging existing processes and procedures. Consequently, it does not help drive the productivity of the functional teams (which include, in-house and outsourced personnel), even though the productivity of the company (in-house personnel only) may seem improved. Furthermore, the reliance on an outsourced work force using traditional (and therefore emotionally comfortable) processes increases the complexity of project management, decreasing the effectiveness of the company’s core employees.

The opportunity is clear, however. Processes should be challenged and refined concepts, systems and procedures developed. True restructuring is necessary for many reasons, and none are critically related to the current economic crisis. ‘True restructuring’ means assessing with an open mind what advanced work processes and supporting technologies offer, and determining how these can be integrated into a seamless workflow. The profile and contributions of key personnel should be analyzed, with the ultimate goal of improving the performance of new functional teams while reducing time to product release.

Because our work is performed by humans and for humans, a solid grasp of the underlying intent and purpose of pharmaceutical development, and the mindset necessary to succeed at it, is critical to focusing teams around the proper processes. Furthermore, the acknowledgement and proper placement of each team member’s strengths and attitude within the team is critical to success, as is the unconditional leadership that company management should provide regarding the true purpose of internal structural change, and the expected performance standards that are required to fill in the gaps created by lay-offs.

Under these conditions, restructuring should be an ongoing process, aimed at continuously improving the company’s quality, speed and cost-effectiveness. Critical elements should include a core philosophy that is clearly supported by the company leadership and embedded in the corporate culture; product-focused teams empowered to enact process changes; support functions (such as IT, finance and HR) clearly assigned to facilitating the implementation of the required changes; an ‘open-to-the-world’ attitude, which should lead to hiring outside experts to help shape and optimize change; and open and flexible information systems that truly empower users and gives them the freedom to succeed.

Following these points, corporate restructuring will be viewed as a streamlining opportunity, reflecting the restructuring processes of the global economy itself.

For further discussion, please visit the on-line version of this article or contact us at info@anabase.com.

Paul-André de Lame is Co-Founder, President and CEO of Anabase International Corp., a consulting company that provides its pharmaceutical, biologic, and medical device manufacturer clients with strategic and operational support in clinical and regulatory development, guides and fosters process optimization, and offers integrated study and data management systems.