THE NEW FACE OF

R&D:Leading Innovation

Across the Enterprise

This white paper contains proprietary data from Korn Ferry instruments combined with insights derived from interviews with 44 R&D executives. The report is extensive and would have not have been possible without the participation of the following organizations:

Alcon Laboratories GSK

Axovant Horizon Pharma

Baxter Insulet

Becton Dickinson Ipsen

Carrick Therapeutics MedImmune

Daiichi Sankyo Medtronic

Eli Lilly Novartis

GE Healthcare Sanofi

Genmab Takeda

We would like to thank every single participant who agreed to take part in the study.

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ForewordIn recent years, the landscape of the life sciences industry has transformed due to numerous external and internal trends, such as the rise of digitalization and big data, signifi cant pressure from payer and regulatory agencies, an evolving patient-centric model, and increased competition across the globe. While pharmaceutical and medical device companies have focused on emphasizing the commercial side of their operations to adapt to these changes, in speaking with our clients it seemed that less attention is placed on the R&D departments of these organizations and the leaders who manage them. In an attempt to fi ll that gap, we leveraged our extensive client base to launch a wide-reaching study, setting out to answer the following questions:

How has the profi le of a successful R&D leader changed? What does it look like today?

How must the R&D function evolve to survive the changing landscape and remain competitive?

How has the digital revolution aff ected the industry as a whole?

What challenges are to be anticipated in the future? What areas are ripe with opportunity?

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Pharmaceutical, biotech, and medical device organizations have long been the sharp end of the spear when it comes to scientifi c advances and technological breakthroughs. Their R&D leadership has, of course, been the driving force behind such innovations, thereby transforming modern medicine and improving the lives of millions.

New trends and transformations—many of which are emerging from far outside the sector—are changing the healthcare industry. The digital revolution is bringing vast amounts of data to the R&D world, but only if organizations are able to decode and unlock it. Simultaneously, payers and policymakers across the globe are playing a much greater role in how companies go to market, blurring the traditional boundaries between the commercial and scientifi c sides of a business. All the while, increasing affl uence across the developing world is causing companies to aggressively invest in R&D hubs in emerging economies—at the same time dealing with regulatory hurdles.

What implications do these changes have on leaders in the R&D realm? How does the R&D leader of tomorrow diff er from that of today? What capabilities do life sciences organizations need to cultivate to excel in their transformed industry? These are the kinds of questions Korn Ferry has set out to answer. Fortunately, we have two valuable advantages.

First, we have relationships with many leaders within the industry. We spoke with 44 executives from a broad spectrum of 18 life science

Introduction

organizations, exploring their views about the changes ahead and soliciting their experience and perspectives about what tomorrow’s R&D leader will look like. These individuals have already seen a great deal of change in their fi eld, and they all predict that even more is on the way. While each had his or her own insights and opinions about what is most critical to R&D success, they were united in their convictions that future success will depend upon leaders being able to fi nd their footing in a new, diff erent landscape.

Second, we have an unparalleled amount of data on life sciences leaders, both in R&D and beyond. Through our assessment team, Korn Ferry has compiled a robust and unique database that illustrates the makeup of today’s R&D leaders—their strengths, their shortcomings, their motivations, and even their stylistic quirks. We fi nd that even though these leaders are a highly diverse bunch, they are also united by some general tendencies and characteristics. There is, in other words, a broad life sciences R&D leader profi le that can be compared against other leadership profi les. We can also analyze this profi le in light of what we know about the challenges ahead for the industry.

Creating this profi le has brought us to some noteworthy conclusions. We believe our fi ndings indicate a need for signifi cant change in how companies select, develop, and reward their R&D leaders. Moreover, we believe that these changes need to be made quickly. There is

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nothing theoretical or academic about this study; we are convinced that the organizations that fi nd and deploy the new R&D leader will be much better positioned to thrive over the long term. We are at a critical juncture, and it is likely that businesses that cling to old ways and old thinking about what R&D leadership looks like will be unable to adapt quickly enough and will cease to exist in their current form.

Wise organizations are already making changes that can help them position themselves for the future. They are structuring their R&D teams diff erently, bringing in new types of talent, incentivizing collaboration over individual achievement, and making sure scientists and engineers are getting out of the lab to learn the business as a whole.

The common theme here is that they’re opening up their R&D departments—moving away from an “ivory tower” model to one where research and development sit even closer to the core of the organization. Instead of sticking only to the science, R&D leaders are driving business decisions. They’re not only innovating, they’re rallying people around an innovation agenda. Accomplishing this will be diffi cult for most organizations and may seem daunting to many R&D leaders who are accustomed to a more traditional model. Nonetheless, we believe that moving from the ways of the past to embrace a new conception of R&D will be a vital part of ensuring that life sciences enterprises can continue to fulfi ll their collective mission of creating a healthier and happier world.

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Throughout this paper, we focus broadly on the life sciences sector. This is because these diff erent components are all focused on the same overarching goal and are being buff eted by the same forces described in this section. However, it would be an oversimplifi cation to suggest that the coming challenges or current cultures are the same within each. Briefl y, some of the unique facets of the

constituent parts of life sciences are highlighted below.

1. Pharma

– Despite pressure for accelerated clinical trials, drug development still takes a very long time. The challenge is to know where to be persistent about pushing projects while also being quick to cancel development activities for less promising drugs.

– It is the end of the era of “breakthrough” medications, and there is a shift toward molecules and treatments that are specifi cally targeted to the individual patient.

– The application of digital is focused around harnessing big data, accelerating the discovery process, and optimizing clinical trials.

– There are a limited number of giant global players acquiring other companies, and there is an associated challenge of ensuring nimble, swift, and empowered decision-making within massive, potentially bureaucratic organizations.

– There is a general move from a strict B2B model to one that is closer to B2C.

2. Medical Devices

– The use of digital is focused on monitoring patient responses in real time as well as optimizing the manufacturing process of the products.

– There is an ability to continuously iterate products in order to optimize patient outcomes and economic effi ciency, all while operating under a patient-centric environment.

– There is a focus on ensuring manufacturing excellence for increasingly complex devices (robotic artifi cial limbs, computer-aided surgery tools, etc.).

– There are diff ering digital challenges given the data-gathering, visualization, and interpretation capabilities of new imaging technologies (cloud-based IS tools, DICOM standards).

3. Biotech

– There is a need to stay as lean and nimble as possible despite rapid growth and complex regulatory requirements.

– There is a shift from a “secretive” stance, where innovations were developed strictly in-house, to a more open-source model.

– Firms have the ability to get things done without the same scale and scope of larger players in the marketplace. Moreover, they have the capacity to secure the funding and resources needed without allowing the need to chase capital distract from the need to do great science and achieve successful regulatory outcomes.

– As in pharma, the application of digital is concentrated around accelerating the discovery process and optimizing clinical trials.

– There is a demand for talent that can harness big-data and digital capabilities to advance gene-based treatments.

The Life Sciences Industry

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It is an exciting time to be in the R&D world. There are few career paths that have such a direct impact on the well-being of the world. The successes of the past all attest to the talent, tenacity, and inventiveness of these leaders and scientists: Deadly maladies have been wiped out. Once untreatable diseases are now easily managed. Having artifi cial limbs is no obstacle to becoming a great athlete. Without R&D, we would all suff er from a lower quality of care. Many of us wouldn’t even be here at all.

This legacy is why an aura of heroism is easy to attach to the R&D leader. They are the wise scientists, guided by both bold ideas and analytic rigor, who push through complexity, persevering until they make their breakthrough. While one eye peers through a microscope, the other keeps wary watch on anything that might thwart their eff orts—from accountants telling them they’re spending too much to salespeople pleading with them to instead make something people want to buy, not to mention the hurdles presented by regulatory bodies.

Of course, this storybook picture of the pure, noble laboratory wizard was never really accurate. But the myth speaks to society’s expectations of what an R&D leader ought to be. They’re untroubled by the distractions of the world at large, with the patience to let science proceed at its own pace. They’re independent to a fault, perhaps trusting their sharp lieutenants and promising protégés but skeptical of anyone who seems guided by anything but pure, unblemished reason.

The facts, however, suggest that this mythical, old-school R&D leader is not the hero a life sciences organization needs in 2019. Indeed, this kind of person that adheres closely to this stereotype might be holding their business back. We believe that a new era calls for a new kind of R&D leader.

Before outlining the qualities of this leader, however, it is important to acknowledge that trends come and go, but science advances. At its core, the role of an R&D leader is to ensure that good science can advance as smoothly as possible. This is not going to change. Still, the skill set and stylistic attributes needed to do this will change. We found this out by speaking with a broad sample of current R&D leaders.

What Got Us Here Won’t Get Us There

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In our conversations with these executives, we asked them which trends they felt would have the greatest impact on their organizations and industries. The following themes kept recurring:

Competition is fierce and growing fiercer.

In interview after interview, R&D executives talked about the intense competitive landscape. The market is crowded with both nimble, energetic start-ups and well-established, deep-pocketed corporations. There are speedy innovators and there are strategic adversaries. It’s a multidimensional chess game that needs to played at a fever pitch.

“Today’s leaders may become tomorrow’s losers…”

The customers must be central.

Organizations today need to be deft about navigating the complexities of global access. The sector’s customer dynamic is much more intricate than a simple seller-buyer model—insurers, governments, regulators, physician systems, and individual doctors are all constituencies that must be aligned around the promise of a new product, seeing the real impact it can have on patients.

“In our business, you have no chance if you don’t have customer-centricity.”

Collaboration beats a closed shop.

The days of an elite team of engineers cooking up miracles in their cloistered, secretive lab are over. Nowadays, R&D is all about partnerships—with colleagues across the business, with universities and other innovation generators, and sometimes even with competitors. A single team—even a highly talented one—can’t go it alone anymore.

“Historically, there was an ‘it-wasn’t-built-here’ mentality. That needs to change.”

Keep science at the forefront without losing sight of the commercial considerations.

All the R&D leaders we spoke with were clear that their role wasn’t to be the best scientist in their company. Instead, they are constantly pushed to think like enterprise leaders, determining which innovations and investments are most likely to pay off in the long term. They need to have the persistence to see long trials to completion but also need the courage and decisiveness to pivot away from less promising projects.

“You have to be both a specialist and a generalist.”

The digital revolution is happening now.

Blockchain and big data promise to revolutionize how clinical trials are run. Artificial intelligence and machine learning will transform how businesses make choices, big and small. With all the attention showered on the tech sector, “digital” can sometimes feel like a buzzword that gets thrown around too often. In reality, all these organizations produce a vast amount of data—but the R&D leaders we spoke with were in consensus that it’s what you do with it that’s important.

“Those who unlock the data have all the power.”

We must find cures, not manage conditions.

The future of medicine will not only be in breakthrough drugs that many people need but also in gene and cell therapies that are targeted to the individual. This has huge implications on everything from regulatory approval to supply chain and accessibility. Organizations need to be building nimble, accelerated systems that can deliver treatments to any individual around the world right when they need it.

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What was striking in our conversations was that R&D leaders seemed much more excited than daunted by these challenges. They did not minimize the trials and travails ahead, yet they were confi dent that a better future was within reach. While these individuals typically had signifi cant scientifi c or engineering accomplishments, they did not express much nostalgia for an earlier era of pure discovery. Rather, they recognized that their insights and expertise were vital to questions that fall far afi eld of R&D’s traditional remit. Getting involved in strategic conversations and having a hand in the commercial agenda has become a central and valued part of their jobs, not a distraction or a burden.

This should not come as a surprise, since R&D leaders—as our data will show—tend to be united by an intense curiosity and a passion for lifelong learning. If they have the opportunity to lead outside of the lab, they will often seize the chance.

If their organization wants their wisdom on business topics, they will rise to the occasion. If scientifi c excellence requires them to adopt new ways of working, the best of them will not hesitate to set aside habit and embrace change.

We found that R&D executives already know the importance of being nimble, and they would relish the opportunity to use this skill. While changing their ways can sometimes be a stretch for them, it is often their organizations that stand in the way. Too much bureaucracy, too many rules, too much fi delity to the way things have always been done—the things that have always stifl ed innovation continue to do so for many life sciences leaders. Our study showed us two things: how R&D leaders must shift their focus in the years to come, and how organizations can remove the barriers to getting the most out of their R&D teams.

Personalized therapies will require timelines that are signifi cantly faster. A patient’s life is at risk—we have to get them the treatment.

Few are aligned to the stereotype.

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At Korn Ferry, we have abundant data on the characteristics of current leaders in the field. Over the years, our assessment team has done extensive psychometric testing on thousands of leaders across all industries. While these tests can illuminate the unique facets of an individual’s personality and his or her skill set, the results can also be aggregated and anonymized, so that we can examine the broad qualities of a whole group of leaders, such as R&D leaders in the life sciences.

We collated the testing data for 1,268 R&D leaders in the pharma and medical devices industries and compared them with 14,243 non-R&D leaders from the same sector. We paid special attention to the 2,503 non-R&D individuals who hold executive and general management roles, as the differences between R&D leaders and this cohort are especially marked.

Our data provides insight into three different dimensions of leadership:

TraitsThe core personality characteristics and intellectual powers that underpin people’s behaviors and decisions. Our internal makeup that shapes, for example, whether we like to think deeply about issues or would rather take a big-picture approach.

DriversThe factors that motivate people in their working lives, such as a desire to advance into roles of increasing authority or a passion for solving intricate intellectual puzzles.

CompetenciesThe leadership skills that we focus upon the most. Does a person tend to collaborate and build relationships more or does he or she focus more on getting things done and delivering results? These are measured by self-report and—for a smaller population—by simulation exercises.

Given this, we can see that R&D leaders have some general tendencies across each dimension that set them apart from non-R&D leaders, particularly executives and general managers. What follows is the overall picture that emerges of the R&D leader of today.

Inside the Mind of Today’s R&D Leader

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TraitsWhat makes R&D leaders tick?

Superior reasoning skills.

Compared to most, they are better at seeing subtle patterns in abstract information—a skill that is critical for drawing new conclusions from what is already known. These analytic capabilities give them considerable potential to excel at strategic thought.

Agile, enterprising thinking.

They embrace ambiguity and can also think broadly and creatively about what can be accomplished. They are not rigid, dogmatic, or afraid of risk.

Comfort with collaboration but also confi dence in taking action.

Today’s R&D leader usually enjoys pursuing a common cause hand in hand with others. They are comfortable with responsibility yet are not preoccupied with being the “boss” in every single situation.

An ability to step back from the details and shift course when needed.

Lower scores in Persistence and Focus run counter to the stereotype of the traditional R&D leader. Our data indicates that they are not stubbornly focused on their scientifi c goals or deeply steeped in the details. They can “fail fast” and step away from a cherished goal when circumstances shift.

Less interpersonal orientation than the average leader.

In some ways, the R&D leader fi ts the stereotype of the introverted scientist: personable and genuine, but not particularly gregarious or outgoing. This group also tends to be more oriented toward facts than feelings and can even struggle to grasp the emotional concerns others bring to their work.

Less emphasis on persuasion.

R&D leaders are notably less focused on the art of infl uence. Put simply, they aren’t salespeople. They likely feel the facts should speak for themselves and might struggle to connect their arguments with the underlying concerns of others.

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DriversWhat energizes them about their work? Overall, our data indicates that R&D people tend to be similar to their peers across the organization in terms of motivation. What gets them out of bed in the morning is not too diff erent from what we see with people in fi nance, sales, marketing, and general management in life science organizations. They have a combination of collaborative and entrepreneurial motives such as:

• They value advancement but are not narrowly focused on promotion.

• They favor a mix of novelty and familiarity.

• They desire structure without rigidity.

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What skill sets do R&D leaders bring to their organizations?

They are big-picture thinkers who stay attuned to the global landscape.

Compared to others across their organizations, life sciences R&D leaders like to keep track of global developments and think broadly about what is possible in the future.

They show enthusiasm for innovation.

Challenging the status quo and bringing new ideas to life is intrinsically appealing to them. Compared to most other leaders in life sciences, R&D people will usually favor the new and different over the traditional and orthodox.

They take an organized approach without being hard-nosed managers.

They like to move things forward in a deliberate, organized manner. Compared to the typical executive or general manager, however, they are somewhat less focused on enforcing accountability.

They may not do enough to bridge conflict or build excitement.

R&D leaders can struggle more than other types of leaders when faced with stark differences of opinion or philosophy. They may be so used to allowing the science to guide them that they struggle when others are focused on completely different priorities. This can lead to missed opportunities to speak to the unique passions and motivations of those around them.

They may not be bold enough when they are standing on uncertain ground.

Most executives and general managers we assessed are comfortable acting decisively amid uncertainty. R&D leaders, however, show less of this tendency. This might be a side effect of their scientific background—they’d rather have good data in hand than simply take a leap of faith.

Competencies

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Leader of Tomorrow

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From our smaller cohort of R&D leaders who have undertaken simulation-based assessments, we can see that they:

Are trusted to do the right thing.

Instilling trust is one of their highest-rated competencies. These leaders come across as straightforward, objective, principled, and credible.

Approach challenges with both determination and fresh thinking.

These leaders can manage ambiguity, showing a high level of resilience while favoring innovative solutions over old approaches. They have a robust ability to appreciate different points of view.

Korn Ferry often uses a simulation-based approach to assess leaders in the life sciences industry. In collaboration with thought leaders in the industry, we have been able to construct a day-in-the-life experience that tests all types of sector leaders against the challenges they typically face in complex, demanding leadership roles. This process uses well-trained role players to interact with leaders in various real-life scenarios, such as giving a direct report feedback and presenting strategic ideas to a senior executive. This gives us a chance to measure them on a different array of competencies than can be studied through self-reported testing. Even though the methods of assessment are different, the results complement each other well.

Predictive Assessment

A Different Way to Assess R&D LeadersFrom our smaller cohort of R&D leaders who have undertaken simulation-based assessments, we can see that they:

Show both business savvy and an inclusive mindset.

They make quality decisions that advance the aims of the organization while also operating in a collaborative manner and engaging teams around common goals.

Miss opportunities to set the global context.

Although R&D leaders are able to think globally, they do not convey these insights as much during the simulations. They could potentially do more to explore the international relevance and implications of their ideas.

Could do more to coach their people.

Developing talent, although shown to improve

performance and strengthen relationships, is a lower-rated competency for R&D leaders. They can miss opportunities to identify what can be done to build the necessary skills in the workforce and may overlook chances to provide constructive feedback and developmental guidance to their team members.

Think big but fall short of energizing advocates.

R&D leaders may struggle more to adapt their communication style to the needs of different audiences. While they are guided by a sense of mission, they miss opportunities to make their future vision come alive for their people.

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Business Leadership:

Patient-centered

Global Awareness

Strategic Mindset

Innovation

Business Insight

Change Leadership:

Risk-Taking

Resourceful

Open Communication & Courage

Strategic Sta�ng

Stakeholder Leadership:

Collaborator

Learning Agility

Curious

Influencer

People Leadership:

Develop Talent

Empowering

Coaching

Team Engagement

*Di�cult to develop characteristics in blue

The R&D Leader of Tomorrow

Too often, leaders are bombarded with vague statements about how the world is changing, how the future is digital, and how everything is going to be di�erent. Scientists and scientific leaders, however, aren’t the type to put too much stock in slogans, catchphrases, or airy generalities.

Our model is valuable in that it gives us a glimpse of factors other than those traditionally thought to animate R&D executives. Our testing studies general factors—and on these, R&D leaders aren’t much di�erent than anyone else.

4 Critical Leadership Requirements, 17 Characteristics

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Cross-business collaboration.

R&D leaders who may feel they already do a lot of this need to collaborate even more, as the demands here will only continue to increase. Emerging talents in the R&D space need to start building broad networks now.

Why is more of this needed?R&D leaders must play an active role in shaping the strategic and commercial agenda. Their success increasingly depends on aligning their manufacturing, commercial, and marketing functions around a model that leverages data, accelerates the clinical trial process, and brings new treatments to the market quicker than competitors.

“[The old ways of R&D were] a bit like Harry Potter. There was some magic going on, but that was all behind a curtain, and no one knew what was going on.”

External networking.

To have an edge in tomorrow’s environment of intricate alliances and intense collaboration, they need to be always thinking of who they don’t know. A long-tenured executive may know dozens of leading thinkers at key universities but not know many people who are innovating in the digital space. Likewise, an emerging leader may have a stellar reputation across several start-ups but be a complete enigma to policy-makers.

Why is more of this needed?Because even the biggest organization only holds a few of the cards these days. Putting together a new medical advance is like assembling a jigsaw puzzle where the diff erent pieces are held by dozens of diff erent people and/or agencies.

“The arrogance of ‘not invented here’ has destroyed so much.”

Internal talent development.

For talent to thrive in a changing environment, key skills will need to be nurtured. Take, for example, the digital revolution, which is poised to change the makeup of R&D teams. The demand for digital will mean that R&D organizations must increasingly be staff ed by people who have an entirely diff erent type of training and expertise. With this comes diff erent outlooks, interests, career goals, learning needs, etc.

Why is more of this needed?Because the old days of being able to sniff out the right new talent by fi nding people who “fi t the mold” are over. The new R&D leader has to be a mentor and champion for a diverse array of knowledge professionals.

“We actually hire people with no R&D skills but who are tech-savvy.”

Organizational infl uence.

R&D leaders need to start embracing the idea that their role is not just to evangelize for the pipeline but also to bridge diff erences, enforce widespread commitment to the scientifi c vision, and inform on key challenges, such as building versus buying research. This means being in constant dialogue with decision-makers across the business, working toward deep mutual understanding and ensuring that their perspective is, in large part, shaped by R&D thinking.

Why is more of this needed?Because they are uniquely positioned to stand in the breach between science and business, speaking the language of both. The demand for agility requires them to turn their R&D teams loose to innovate while they focus on “clearing the path” for them by socializing new ideas and persuading the business to pursue a direction that might make some uneasy or skeptical.

Do More of This

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Potential Obstacles As R&D leaders seek to do all these things, our data suggests that they may face several obstacles, stemming from their internal “hardwiring” as well as from the inevitable diffi culties that arise from adopting new ways of working. These obstacles include:

A tendency toward introversion.

The data indicates that R&D leaders are less naturally outgoing than other executives. If the constant social demands of their role start to be treated as a bother or a box to check rather than as a pivotal priority, there is a risk those leaders may turn inward when it is critical for them to seize the limelight.

A more focused, objective communication style.

R&D leaders need to distill highly recondite technical information into crisp, powerful messages that capture others’ attention and imaginations. This often does not come naturally to those who have long been pushed to focus on accuracy rather than persuasion or inspiration.

A tendency to leave empathy out of the equation.

While they are often intensely focused on improving people’s lives, they may come across as less attuned to others’ feelings. This can be a roadblock when it comes to forging the deep personal connections that are often at the heart of infl uencing, engaging, and energizing people.

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The decision-making process is dramatically diff erent. In the past, you would kick your innovation down the road. Today you sit at the table with commercial, clinical development, production, and external partners so you can connect the dots faster.

Do Less of This

Relying on their own thinking.

It’s probably dangerous to tell an R&D leader to think less. After all, our data shows that they’re often going to be the smartest in any room in which they fi nd themselves. Still, R&D leaders need to be integrators and orchestrators, not the source of all wisdom.

Why is less of this needed?

Because there’s simply too much to think about for one leader to do it all—or even half of it. Being unaware of the intricacies of big data while being wise about big-picture strategy will enable them to channel their mental energies most productively.

“You have to go from being a genius to a genius maker.”

Focusing too much on the facts.

Again, it’s controversial to suggest that R&D leadership be less preoccupied with data. Still, the R&D leader of tomorrow will not be able to have the same depth of knowledge about all the developments happening across their fi eld. Instead, they need to have an eye for talent and an empowering approach that allows them to unleash the digital experts and scientifi c minds who can bring the vision to life.

Why is less of this needed?

Because the need for utter certainty and clarity can be the biggest enemy of agility and innovation. R&D leaders who need to duplicate every analysis for their teams can hinder the culture of empowerment and reasonable risk tolerance that is critical to achieve a competitive edge.

“Some of the best technical leaders were the worst leaders I had.”

Standing between their team and the wider organization.

The leader cannot be the only bridge between R&D and the commercial side of the enterprise; instead, they must encourage their people to go out into the organization, sharing what they know and learning from others.

Why is less of this needed?

Because the organization needs to be learning from all facets of R&D. What was formerly a very academic culture—like a university within the company—has been pushed to become more practical and delivery focused. The friction here will not be resolved if the leader shields scientists and data professionals rather than helping them step out and have their voices heard across the enterprise.

“We cannot rely on a single individual to build innovative breakthroughs … we need to operate as a team cross-functionally and with external partnerships.”

Deferring too much to the business.

Questions of business strategy seldom lend themselves to scientifi c exactitude. There is a danger that the R&D voice may become muted, simply because their leaders are less inclined to go against their scientifi c training and speak up boldly without full certainty to guide them.

Why is less of this needed?

Because it’s a myth that R&D leaders know so much about the science but relatively little about commercial realities. R&D will only get the seat at the table that it needs if its leaders are sometimes willing to challenge, question, demand, advocate, and engage.

“Balancing scientifi c purity and the enterprise is easy when people are willing to listen to others and share what they need.”

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Potential Obstacles There are obstacles that can work against pivoting from natural behaviors. While a variety of personality types and leadership styles exist in the R&D space, the typical progression within the discipline (from scientist or engineer to leader of technical experts) pushes people toward a certain approach—a stubborn notion of what good looks like—that can be hard to abandon.

A belief that the facts should speak loud and clear.

You don’t become a scientist or an engineer unless you treasure objectivity—the quest for truth. Once these individuals start accumulating leadership duties, however, they often fi nd themselves colliding with people who bring entirely diff erent outlooks to the world. Others seem to want to corrupt the science with narrow concerns. How much will it cost? How long will it take? Can we even sell it? Can’t we make it cheaper? It can be fatal for tomorrow’s R&D leaders to tune out these voices or to fi ght back with more and more data. It has to be a conversation about what is possible, not an attempt to convert people into believers.

More faith in the process of discovery than faith in themselves.

Our data suggests that the typical R&D leader does not approach problems in the same way as a seasoned general manager. The former sees a diffi cult problem and believes that logic and reason are suffi cient to come to a good solution; the latter, by contrast, sees that same problem and believes their own inherent capabilities will allow them to fi x it. As such, R&D leaders can be more prone to minimizing their own skills and doubting their own instincts. Pushing through the ambiguities and complexities on the horizon, however, will require them to fi ght against these tendencies.

A reticence to engage in confl ict.

Compared to executives and general managers, R&D leaders tend to be less comfortable with clashes of opinion. While broad business leaders often lean into these disputes, R&D leaders are more likely to back away. This can contribute to a dynamic where R&D keeps itself above the fray on topics where their views, even if highly controversial at the moment, could add substantial value.

In conclusion, we believe that R&D leaders will need to change their approach signifi cantly in the years to come. These changes will be diffi cult for many to make. R&D leaders will be called upon to go from scientist to strategist, from architect of the pipeline to inspirational enabler of talent, from voice of reason to visionary advocate.

At their core, however, these changes call for most R&D leaders to evolve their attitudes and behaviors. These leaders don’t have to change their DNA. Many of the current R&D management ranks in life sciences organizations will be able to make the switch. Some will not. Success will depend on whether these leaders are able to adapt—and how their organizations prepare them to do so.

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Life sciences organizations have a major mandate if they wish to excel in R&D over the next decade. They need to cultivate the next-generation R&D department, thinking of it as the engine that will power their business in the years to come. If they do not, they will suff er self-infl icted wounds that will keep them at a disadvantage. It will keep them slow and steady just when speed and nimbleness are needed.

In the end, not making these changes will inhibit the kind of innovation and execution that organizations will need to excel in the marketplace, serve tomorrow’s patients, and carry forward their legacy of advancing human health.

The good news is that R&D leaders are made and not born. The better news is that organizations can choose to develop people who will thrive in the new marketplace, instead of sticking with the safe hires they’ve always found. Recruitment strategies can bring in promising but raw talent who can challenge conventional thinking, and rewards methodologies can incentivize boldness, innovation, and a “fail fast” mentality.

From the C-suite to the frontline HR staff , everyone needs to be thinking about the steps they can be taking now to ensure their R&D organization is equipped to drive the company into the future. This eff ort should touch all

aspects of talent management—from learning and development to diversity and inclusion, from college recruitment to executive rewards, from promotion decisions to online training programs. All of these endeavors should be focused on the goal of developing an R&D organization that is agile, multifaceted, collaborative, committed, and broad thinking.

Of course, this is easier said than done. In a time of increased competition and intense pace, it can be tough to step back and scrutinize what the distant implications of today’s investments will be. When the whole organization is focused on getting ahead in the marketplace—and when there’s a war for high-quality talent in almost all disciplines—too often talent management has too many tactical battles to fi ght to turn their attention to the long-term endgame.

Stretched-thin R&D and HR departments, as well as the executive teams that oversee them, do not need to “boil the ocean.” Instead, there are practical and focused activities they can undertake in how they pursue, reward, promote, and develop the people in their R&D organization. If these eff orts are performed in a coordinated and consistent manner, they will ensure that their R&D talent pipeline is as robust and promising as possible.

Tomorrow Begins Today

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Recruit early-stage talent.

• Stop focusing solely on traditional R&D hires (scientists, engineers) and begin recruiting digital and big-data savvy professionals.

• Expand the organizations and academic institutions from which the company draws new hires to reflect the growing importance of mining big data in R&D decisions.

• Measure new hires based on both technical capabilities and overall working style.

• Focus on candidates with a demonstrable ability both to do excellent technical work and to collaborate skillfully. Probe into this during the interview process.

• Partner with universities globally to encourage STEM programs to place emotional intelligence and creative leadership as core parts of their curriculum.

“It’s better to have nobody than hire the wrong person.”

Staff the leadership ranks.

• Focus on those candidates who have a clear and compelling—if perhaps controversial—vision of the future.

• Look for people who can talk with clarity and depth about where the industry is headed and what changes they would bring to the company.

• Listen to the top candidates’ views on digital. Are they realistic and distinct? Do they have big-data savviness? Do they have a plan to leverage these developments? Have they been early adopters in the past?

• Show openness to non-traditional hires. View non-circuitous career paths—or stints in different industries or fields—as potentially giving the candidates an advantage.

• Ensure recruiters are surfacing candidates with demonstrable track records in collaboration as well as a history of influencing a wide array of stakeholders.

• Consider the high-potential talent that candidates have mentored and developed. Are they a diverse bunch, or are they a series of like-minded people?”

“We are staffing differently now—trying to find a balance between strategic thinkers and doers.”

Cultivate an inclusive, diverse workforce.

• Ensure work teams are not too large or cumbersome, creating environments where individuals can truly take ownership and make a difference.

• Sponsor, support, and co-create STEM programs in universities that are truly diverse. Recruit from institutions with a track record of attracting diverse faculty and students.

• Develop and launch early-career programs to instill and reinforce the idea that R&D staff should embrace diversity in all forms: background, gender, perspective, personality, etc.

• Provide resources (affinity groups, mentors, targeted programs) to help historically underrepresented groups in R&D master the advocacy skills required for tomorrow’s leadership roles.

• Target efforts to force dialogue and collaboration cross-culturally and across the organization. Eliminate formal and informal barriers between different global sites, teams, or functions.

“We used to be in consensus, and now we are innovative.”

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Ensure that innovators and collaborators ascend the succession ladder.

• Assess people against a broad leadership profile, not a rigid R&D profile. Do not measure whether people fit a type that has been successful in the past, but measure whether they have the capability to stretch beyond the confines of their function.

• Consider psychometric tests to measure emotional intelligence and leadership capabilities during people’s early career stages to identify high-potential people.

• Ensure subsequent assessment activities have a strong component that measures capabilities in the critical areas most often missing in R&D leaders: strategic thinking, influencing skills, communication impact, and bold decision-making.

“[You] need to create a Shark Tank approach to ideas. Treat the business like a start-up.”

Reward what matters.

• Design competitive rewards programs at all levels, not just the executive level. Don’t necessarily focus myopically on the company’s specific industry. Different industries may have approaches that can be instructive.

• Incentives really do work. Take a hard look at the metrics that represent what you are trying to build. For leaders with jobs that are broader than achieving development milestones, consider different metrics or payout curves.

• Personal or individual goals, even at the executive level, may be appropriate when a leader is trying to build teamwork or support the culture of the organization.

• Communicate clear career pathways of advancement that are linked to the attributes of the leaders of the future. Today’s high potentials will only stick around if they can see that there is a pathway to a successful career. If they see a bottleneck, they will leave to get around it.

• Create recognition programs. Millennials relish recognition as well as pay. These programs don’t need to be costly, but they need to have an impact and demonstrate that the broader organization is watching.

• Evaluate whether R&D talent is still being measured and rewarded on individual performance when in reality they are expected to perform in a cross-functional model.

“The things we reward today are not the things we say matter.”

Launch the right learning and development programs.

• Provide R&D staff with opportunities to work with other functions and disciplines, even in early-career roles where their primary focus is on core scientific and engineering tasks.

• Make sure high-potential team members have opportunities to partner with commercial colleagues on customer-oriented activities.

• Secure strong coaches and mentors for promising leaders who struggle to influence beyond the function. Make sure the ability to do this is embedded in promotion criteria for more senior roles.

• Help people craft specific networking plans that allow them to build out the array of connections they will need in higher-level roles. Structure the working environment to allow for relationship building and raising external visibility.

• Identify high-impact career accelerators for the future, such as overseeing a digital initiative, leading a joint venture/alliance R&D effort, or participating in enterprise- wide strategic planning.

• Learn the methods that industries with a larger digital footprint use to attract and retain talent. What career paths are most appealing? What developmental programs work best?

• Respect all career paths and avoid pushing people in a single direction. Create multi-development programs that cater to different career goals.

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Talent is the number one asset of any R&D department, because you can’t outsource talent.”

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During our interviews with R&D executives, one individual’s remark captured what all the others had said in many different ways: “If I think about what got me here, it’s probably not what’s going to keep me successful moving forward.”

It is understood that science is the “true north” of any business in the sector. Many of the executives we spoke to were quite clear on this point. They showed passion toward work that allowed them to be at the vanguard of new developments in healthcare. They came across as comfortable embracing R&D’s traditional role as champion of wise science and engineering excellence.

Still, their deep experience in the industry and intimate familiarity with the life sciences ecosystem has taught them that change is inevitable. Over the years, they have seen world-shaking breakthroughs and faced bitter failures. They have observed explosive growth in technology while also leading through the emergence of a much more globalized and interconnected world economy. This has helped forge them into leaders who do not take current realities for granted.

We were honored to be able to speak to so many accomplished leaders, people who have been at the heart of developments that have made the world a better, healthier place. What was just as impressive as their histories, however, was their humility. These were not people to rest on their laurels. When asked to discuss the future, there was no hint of arrogance in their messages. They know tomorrow’s R&D leaders cannot go it alone, and that no matter how brilliant one might be, success depends on the wisdom of dozens and the enthusiastic commitment of thousands.

Yet humility is only one strand of the DNA that will make up tomorrow’s top R&D leader. An ability to draw upon diverse views to shape a common direction will be essential, but this does not preclude stepping forward with a bold position. If anything, our research suggests that R&D leaders should insist on becoming more central to their organization’s strategic conversation. They need to step forward and proactively help shape the thinking of stakeholders across and beyond the business, promoting a powerful vision that resonates both emotionally and commercially. And they need to be adept at knowing when to accommodate others’ concerns and when to fight for their own convictions.

What will be asked of tomorrow’s R&D leaders is by no means simple or easy, because competitive and scientific excellence will depend on their being a hybrid of several different kinds of leaders. They will need to be deeply steeped in technical complexities yet also able to step back and let others do the analytic legwork. They will need to be advocates for projects the rest of the company might find unrealistic or too expensive, but they cannot be absolutists who reject the commercial agenda out of hand. They will need to be partner and friend to many yet also a passionate champion of ideas for which most might not be ready.

Taken together, this all means that R&D leaders of the future have a formidable job ahead of them. There will probably be few tougher in all of life sciences. But, as we heard again and again from top executives in the field, there are very few jobs that allow someone to do so much for so many.

Conclusion

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Naomi SutherlandGlobal Advisory Leader, Life Science

Linda GookinSenior Client Partner

Jim PetersSenior Client Partner

Kevin HedmanSenior Consultant

Trish GuayConsultant

Hilal ErkovanConsultant

Omar KhodrAssociate Consultant

Acknowledgement

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About Korn FerryKorn Ferry is a global organizational consulting firm. We help companies design their organization – the structure, the roles and responsibilities, as well as how they compensate, develop and motivate their people. As importantly, we help organizations select and hire the talent they need to execute their strategy. Our approximately 7,000 colleagues serve clients in more than 50 countries.

© Korn Ferry 2019. All rights reserved.