It was not too long ago that I had outlined the essentials of leadership. Using that yardstick, I have been trying to assess the performance of some of the CEOs in the pharma sector, and more specifically Merck CEO Raymond Gilmartin and Pfizer CEO Hank McKinnell.
I am quite disappointed with the performance of Gilmartin who is responsible for a flawed Vioxx recall strategy and has provided, like Martha Stewart, a classic example of how to destroy shareholder value.
I had expected that Hank McKinnell would set a better example and learn from the mistakes committed by others. I initially hypothesized that Pfizer will be hurt by its poor risk management strategy. Now it seems that Pfizer has no risk management strategy. In an interview with USA Today in response to the question, "What happens to you financially as a consequence of withdrawing the Celebrex ads?", McKinnell says, "We haven't even thought about that. " I hope McKinnell was not telling the truth since a CEO who has not analyzed all possible scenarios is leading the company in the wrong direction. The Pfizer board, as part of its corporate governance mandate, has a key role to play here. Does Pfizer have a risk management strategy or not?
The other thing that I have been asking pharma industry leaders to do is to develop a new business model. As a management consultant, I have always been opposed to businesses deriving their competitive advantage from legislation and government protection, but looks like the pharma industry is afraid of change. That is why I was disappointed when McKinnell says, "There's no question we're all going to be sued here. That's very predictable and something that we really do need to fix legislatively, but the best immunization against a lawsuit is doing the right thing."
Tips on being a great leader and providing strategic vision to your organization
I am quite disappointed with the performance of Gilmartin who is responsible for a flawed Vioxx recall strategy and has provided, like Martha Stewart, a classic example of how to destroy shareholder value.
I had expected that Hank McKinnell would set a better example and learn from the mistakes committed by others. I initially hypothesized that Pfizer will be hurt by its poor risk management strategy. Now it seems that Pfizer has no risk management strategy. In an interview with USA Today in response to the question, "What happens to you financially as a consequence of withdrawing the Celebrex ads?", McKinnell says, "We haven't even thought about that. " I hope McKinnell was not telling the truth since a CEO who has not analyzed all possible scenarios is leading the company in the wrong direction. The Pfizer board, as part of its corporate governance mandate, has a key role to play here. Does Pfizer have a risk management strategy or not?
The other thing that I have been asking pharma industry leaders to do is to develop a new business model. As a management consultant, I have always been opposed to businesses deriving their competitive advantage from legislation and government protection, but looks like the pharma industry is afraid of change. That is why I was disappointed when McKinnell says, "There's no question we're all going to be sued here. That's very predictable and something that we really do need to fix legislatively, but the best immunization against a lawsuit is doing the right thing."
Tips on being a great leader and providing strategic vision to your organization
- McKinnell gets the first one right: Always do the right thing. But don't just say it, as he seems to be doing. Actually do it.
- Don't wish that problems will go away. They rarely do. Particularly the ones that you created. It might seem like an easy thing to do to seek the help of powerful friends, but that is not a permanent solution. What happens when the power structure shifts?
- As a leader, look at all aspects of a problem and analyze all possible scenarios, even if they have low probability. You will have a better risk management strategy and be better prepared if you run into a high-impact-low-probability situation.
Recommended article: Developing a customer-centric business model in a drug company