CEO compensation out of control
Mar/24/2007 12:14 Filed in: Pharma
Business
It's not easy to be a CEO of any big company today. There are always people who are second guessing what you do and Wall Street can be relentless in its pursuit of earnings. But how many people who are senior level managers would gladly take on the challenge of leading a major company for a lot less money? My guess is there would be a lot of volunteers.
What are the qualities needed to be an effective pharma CEO? Here is a list of some attributes I believe every CEO needs to be successful:
-Lead don't follow: Set a clear direction for your company and don't bow to pressure from the outside. Strategic direction is an important framework for the health of the company.
-Listening: Listen to the life's blood of your company; your employees. Listen to what they are saying and implement changes to allow them to succeed.
-Implement with speed: Pharma is moving at 20 mph while customers are moving at 100 mph. Pharma has a huge competitive disadvantage here.
-Be a great salesperson: sell your ideas to your senior managers, ensure they understand and get rid of the ones that are resistant to change. Sell your vision to Wall Street and to the Board. Make sure they are willing to support your decisions.
-Be a marketing driven organization: The days of the big pharma sales force are coming to an end. Physicians don't trust pharma messages and consumers are taking control of their healthcare decisions. This all means that you had better learn to change your business model from a sales driven company to a marketing driven company quickly.
-Embrace the Long Tail: Blockbusters are going to be few and far between. Diversify your portfolio to include a lot more products that produce sales of $200-$700 million rather than one product that may account for a big part of your revenue.
-Prepare for coming storm: Lead your company through the coming storm that is being generated by the media and Congress. Have plans in place to so that they can be executed at a moments notice.
-Mingle: Sit down with your employees at the cafeteria. Talk to them, listen to them, get them to open up.
Sounds simple but it's not. There are way too many CEO's who sit in their big offices and have a "town hall" meeting with employees and believe that is all they need to do. When I was at Lilly I tried to follow Sidey Taurel's book on leadership and ran into brick walls again and again. If your vision is not communicated and enforced at every level of the organization your spitting into the wind. It's time for changes in compensation and a new face for pharma CEO's to emerge.
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