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Cracking the consumer health talent code: driving home pharma's advantage

This article was originally published in Scrip

Executive Summary

The consumer health market is in a state of flux. As an emerging and expanding industry, it is undergoing fundamental and rapid changes that have significant consequences for the pharmaceutical and consumer product companies that are competing for market share. Nanaz Mohtashami, expert in healthcare executive leadership and search, explores what firms need to do to succeed in this market sector.

Nanaz Mohtashami, advisor at Russell Reynolds Associates

Neither side currently has the full set of capabilities required in order to win in this increasingly exciting sector. Finding the right talent and a diverse range of perspectives at executive level will be the key battleground for competitive advantage. The good news for pharma is that it is well placed to drive home its existing advantage in the sector.

Pharma-heritage companies and consumer packaged goods (CPG) businesses need to combine the best talent and expertise from both worlds. In this complex, fast-paced environment both scientific capability and product focus will be needed in order to reach global consumers creatively, ensure dynamic innovation, and build nimble supply chains that get products to market quickly.

Because you're worth it

The consumer health market is already a multi-billion dollar global industry. Annual growth in the sector has outpaced other major consumer goods markets, including packaged foods, over the past few years and is estimated to grow by an impressive 50% over the next five, according to a March 2014 report from Euromonitor International.

While the market has historically been dominated by pharma-heritage companies, such attractive growth prospects have led to an uptick in interest from other less traditional parties, namely science-based CPG organizations and food producers. Such a proliferation of active players in the market is leading to an increasing crossover of interests between these traditionally very different companies.

As a result, the fight for talent has never been fiercer. How these businesses recruit and retain the high-calibre workforce required to capitalize on changing market trends is a continuous challenge – and one that is likely to intensify in this quickly evolving market.

Traditional experience will be necessary for pharma companies to make the most of their current advantage, namely the ability to deliver innovative products with proven efficacy and credibility while operating in highly complex regulatory environments. But successful pharma organizations of the future will ensure they marry this with key learnings from the CPG world. In particular, they need to bring on board the expertise hitherto associated with their CPG competitors in marketing strategies that develop strong brand portfolios and successfully dominate categories.

A head start

Our analysis suggests that, overall, pharma-heritage players in the consumer health sector have been more open to accepting and attracting talent from 'the other side of the fence', with the chance to cover off skill gaps that might exist across various functions. The first notable example of this was in 2010 with GlaxoSmithKline's appointment of Emma Walmsley – previously marketing director at L'Oreal – to head its European consumer healthcare business, demonstrating the growing value placed on communicating effectively to consumers. Rakesh Kapoor, CEO of Reckitt Benckiser, described this shift well when he said: "Innovation in consumer health means considering mums not molecules."

To date, CPG companies have been less proactive at building wider skill sets, such as expertise around regulation or communicating with physicians. Indeed, our research shows a greater diversity of senior talent among pharmaceutical than CPG companies – 54% of executives within pharma-heritage consumer health organizations have both CPG and pharmaceutical?industry experience, compared with only 5% of CPG-heritage consumer health executives.

Similarly, pharma-heritage companies appear to have a better understanding of the diversity of skills required and are more willing to change hiring behavior, as measured by the origin of senior hires. According to our analysis, 43% of appointments were external and came from a variety of sources outside the industry. In comparison, CPG-heritage consumer health companies promoted more than 90% of their executives from within.

Model for growth

To build on this advantage, pharma companies will need to secure talent with broad skill sets:

?Customer insight and influencing expertise: Strong consumer marketing and brand building skills, with particular expertise required in digital to capitalize on surging consumer health engagement online.

?Medical and regulatory knowledge: Understanding local market and regulatory frameworks, especially in emerging markets.

?Strategic mindset: Taking responsibility for key strategic decisions and meeting increasingly aggressive targets.

?Collaborative approach: Maximizing the benefits of mergers and acquisitions, partnerships and joint ventures, as well as managing a range of interest groups.

?Understanding consumer-led innovation: The ability to drive innovation beyond product development to innovation in the broadest sense.

Cultural exchange

Despite the need for diverse talent from both sides, it is crucial that pharma companies are mindful that the corporate cultures in these organizations are very different. The fast-paced and more aggressive culture of CPG companies contrasts considerably with the more conservative, cautious and bureaucratic culture typical in large pharma organizations.

As a result, great care and cultural sensitivity will be needed to integrate these contrasting skill sets and use them to their best advantage. Pharma companies must ensure that senior external hires are accepted and integrated within their overall culture.

Only those that can strike this delicate balance will crack the talent code.

Nanaz Mohtashami is an advisor in the Healthcare Sector at executive leadership and search firm Russell Reynolds Associates

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