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Words – the most powerful drug

Published date: 
16/02/2012

 

Why good internal communication within organisations is essential in these fraught times

By William Hind, Founder - Alpharmaxim

The precise quote by Rudyard Kipling is “Words are, of course, the most powerful drug used by Mankind.”  In these trying times, this is something we can all too easily forget. 

Recent headlines make painful reading: “Cost cutting measures extended in drugs company”; “Drugs company to lay off X thousand staff”.  It has not been a good decade for much of pharma employment.  Estimates vary, but, in 2011, more than 22,000 people were laid off.  In 2010, pharma cut more than 53,000 jobs, while in 2009, when annual layoffs peaked, 61,000 lost their jobs. 2012 has also started poorly! Combine this with views of the economy and the turmoil of the Eurozone, and it is easy to understand how the temptation to focus on fixing the costs of tangible assets and activities, while forgetting the intangible value of such things as internal communications has developed.    

Challenging Times 

Recent reports by Evaluate Pharma (World Vision 2016) indicate that over $255bn of sales are at risk from patent expiries that will occur during 2011-2016.  

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Expected sales lost

2012 predicted as largest patent loss year - $33bn expected sales lost – including probable patent expirations of Plavix, Seroquel, Diovan, Singulair, Actos, Lexapro and Viagra

Sales losses expected in 2013, 2014, 2015, and 2016 are respectively $24bn, $19bn, $22bn, $20bn.  

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Although it is easy to predict gloom from this outlook, a few key points need to be kept in mind:

  • The overall expected trend for the period 2011-2016 is that growth is actually likely to be 4.0% pa.  This is better than expected, mainly due to litigation protecting against generic erosion, better-than-expected clinical trial results and faster-than-expected approvals.  
  • Many of the individuals cited as being laid off are often re-employed in other pharma companies, frequently specialised units.

It is certain that all healthcare companies (pharmaceutical, biopharma, vaccine, devices and diagnostics) are having to capitalise on all avenues to maximise their revenue streams.  There is a common theme among many companies – and commentators seem to agree – that the likelihood of the next ‘mega-brand’ being just around the corner seems remote.  The illusive ‘Holy Grail’ that has been the focus for so many large pharma companies then seems an unlikely prospect.

Increasingly many larger companies are exploring development of speciality medicines that, not so long ago, would have been deemed too specialised, niched or of insufficient peak-sales value to pursue.  A growing number of large companies are adopting a ‘multi-business unit’ approach, where each unit is almost an autonomous business under the umbrella of the parent company.  This allows them to share resources while being more flexible and nimble in their approach. Equally importantly, many small, often individually-focused, companies who have a very limited number of products and are specifically targeted on one or two areas are being founded and growing.  The challenges at the different ends of this company spectrum are to:

  • share vision for both large and small companies;
  • ensure that the internal messages are consistent between business units in large companies and reflect the overall mission;
  • ensure that small companies remain focused on the vision and not get lost in the ‘excitement of the science’. 

The trend towards focusing on the speciality areas of medicine seems likely to keep increasing. The Washington Post (January 25, 2012) reports that “the pharmaceutical industry won approval to market a record number of new drugs for rare diseases last year”. (Innovative drug approvals up sharply in 2011...). “Drug companies are increasingly taking advantage of the commercial benefits of developing so-called orphan drugs, which include extra patent protections, higher pricing, and a streamlined review process by the FDA.  Among the innovative treatments approved in the past year were the first new drug for lupus in 50 years, and the first new drug for Hodgkin’s lymphoma in 30 years.”  The term ‘niche-buster’ has entered the lexicon in relation to this approach for those that like buzz words. 

Motivation is key – but how?

Let us agree that it is important to motivate your teams.  You want highly motivated teams to ultimately provide greater productivity (however ’productivity’ is defined).  Whether you are a large company, with multiple business units focusing on different areas, or a small biotech, it would seem extremely important that you take charge of your internal messages to ensure you gain motivation from your staff.  Failure to do so would be akin to having a team of huskies tied to different corners of a sledge, each pulling in a different direction!  Not exactly the desired result.  But why can’t you just tell your team about your expectations and let that be that; after all, they all get paid don’t they?  The danger is that the message gets lost or devalued, unless approached professionally.  We are all bombarded by emails (a colleague claims to receive in excess of 500 per day), inundated with meetings and stressed with deadlines.  It is very easy to overlook the important mission for the mundane, day-to-day activities that fill our lives. 

Let us take a moment to revisit some of the theory.  Motivating people is a complex thing.  Perhaps the fact that there have been so many lay-offs in the industry should make people glad of their job and so be spurred to deliver that extra bit of productivity?  Maybe an increased salary will help – but will it help in getting some agreed vision and drive for the future?  

There are numerous theories about motivation, particularly in the corporate environment.  A couple of the more notable ones are the Equity and Expectancy theories.  Equity theory attempts to explain relational satisfaction in terms of perceptions of fair/unfair distributions of resources. It was first developed in 1963 by John Stacey Adams, a workplace and behavioural psychologist, who asserted that employees seek to maintain equity between the inputs that they give to a job and the outcomes that they receive from it compared with the perceived inputs and outcomes of others.  

The belief is that people value fair treatment. This, in turn makes them motivated to maintain the fairness within their relationships with their co-workers and the organisation.  

Equity theory has several implications for businesses including:

  • People measure the totals of their inputs and outcomes. This means a working mother may accept lower monetary compensation in return for more-flexible working hours.
  • Different employees ascribe different personal values to inputs and outcomes. Two employees of exactly the same stature in terms of experience and qualification, who do the same job for the same pay, will probably have quite different perceptions of the deal they are each getting.  
  • Employees are able to adjust for purchasing-power and local-market conditions. The expectations in London will be very different from someone doing the same job in Launceston , let alone Lagos. 
  • Staff perceptions of themselves and others may be incorrect, and these need to be managed effectively.
  • An employee who believes s/he is over-compensated may increase his/her effort. However, they may also adjust their values, so that s/he internalises a sense of superiority and actually decreases his/her efforts.

Expectancy theory proposes that a person will decide to behave or act in a certain way because they are motivated to select a specific behaviour over other behaviours because of what they expect the result of that selected behaviour to be. This theory was defined by Victor H Vroom in 1964.  In essence, it suggests that money will motivate to the extent that employees perceive it as satisfying their personal goals and to the extent they perceive their pay as being dependent upon performance criteria.  

That money is clearly a motivator is backed up by research conducted by Edwin Locke, PhD who found that when money was used as a method of motivation it always resulted in some improvement in employee performance. However, research by psychologists Ed Diener and Martin Seligman, as well as Daniel Kahneman and his colleagues, showed that after people have the basic necessities of life, having more money does not necessarily increase happiness, or therefore productivity, much at all. 

If salary is not the only tool available for ensuring that you all share a consolidated vision and are motivated to drive it forward, then more vague elements need to be considered. Certainly employee satisfaction is one of the most important drivers of continuous improvement and satisfied customers according to recent research.  

So, money can motivate but so too can other factors. But can they ensure the motivation is behind your vision? What seems clear is that any degree of misperception can lead to a reduction in the capability to motivate. If the potential for misperception between individuals is great then consider how much greater the misperception potential between different business units might be!

Recent research (conducted by the National Business Research Institute in the US) used a method called the ‘Root Cause Analysis’ to identify the items that were driving employee perceptions. The test revealed that three of the survey items were driving employee perceptions on 62% of the total survey items. These items were:

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  • Management is approachable, easy to talk with.
  • I am given the resources and equipment to do my job.
  • Management keeps me informed about important issues and changes.

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Good Communication is Essential 

 It is apparent that good communication is essential, especially internally, to ensure that people understand that they have the resources and equipment to do their job; they are informed about issues and changes; are able to approach management and it is clear that they feel that they are listened to and their input is valued.  

 If you agree with these points then, in essence, the need to act is the next step.  How you act is dependent on you and your circumstances but you have now accepted that the need to act is paramount. 

Building, and acting on, an internal communications plan can take many forms and have many considerations.  Highest among these should be that it is not a ‘nice-to-have’ allowing you to shout about sales successes or new office buildings; rather, it is something that can address your business practices, examine certain issues and share best practices – to ensure that perceptions about approach, conditions and vision are consistent among the different areas of the business – ultimately leading to your team feeling involved and being highly motivated.  

The most important point is that you begin to act, and do so professionally.  The tactics you employ need to be motivational and often this is not high-science so ensure that you look for the right skill sets to support you. 

To end in a similar spirit to that in which we began, Abraham Lincoln said “Most folks are about as happy as they make their mind up to be.”  Internal communications can at least help them to make their mind up in the right direction!

So is an internal communications plan just a ‘nice–to-have’? I prefer to think of it as something you cannot afford to be without.  

William Hind is founder of Alpharmaxim and can be contacted at info@alpharmaxim.com or see www.alpharmaxim.com 

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