By Kathy Hagen
In 2011, the first wave of baby boomers will reach age 65. How will that affect the life sciences? From the standpoint of an experienced workforce, major shifts will occur.
Baby boomers comprise over 80% of the leadership in our organizations today. Therefore, in the next 8 to 10 years, the most experienced leaders at the top of and throughout industry will have retired, as will many of the deeply experienced experts embedded throughout the organization. Even if economic factors force boomers to work longer, the tide of retirements will not be avoided, but only delayed.
The impact of the loss of expertise and experienced leadership is compounded by timing, as the life sciences industries contend with the upheaval generated by the crumbling blockbuster business model of the pharmaceutical sector, healthcare reform, and revisions in reimbursement strategies, globalization, safety issues, and shifting consumer expectations. Frequent media messages about recalls and safety questions are constant reminders of the need to reestablish confidence and trust with consumers and regulators.
Loss Of Experienced Leaders
As they face a major loss in the number of experienced leaders, organizations are working to implement human resource and leadership development practices to bring new leaders up to speed quickly. They also need to be working to provide those leaders with the knowledge, experience and context they need to lead a multifaceted organization in a complex industry and changing environment.
Given the challenges of leading today, we need to accelerate the pace of new leaders not only learning how to lead but leading during a complex time.
How The Need Is Addressed Now
Those companies addressing the need to bring new leaders forward have a number of documented best practice leadership development programs from which to choose. The most widely known of those programs tend to focus on the identification of up-and-coming prospective leaders and on ways to provide them opportunities to broaden their experience. These programs put the focus on the new leader and their current skill set. Rarely, however, does such a program concentrate on identifying, articulating, and transferring the contextual deeply held experiential-based knowledge needed to accelerate the new leaders’ ability to make solid, sustainable decisions for the future and keep them from repeating mistakes or missteps from the past. Knowledge transfer is a critical part of bringing new leaders up to speed quickly, especially given most leaders have 90 days in which to make an impact.
Even with the skills the new leader brings to the role, they would be at a disadvantage without an understanding of the background, rationale, alternatives considered, and influences that led to the decisions made previously, leading to errors in judgment quickly apparent to more tenured colleagues. They also need the insights and awareness of the industry held by the internal/external network around the leadership team to help them anticipate and prepare for future challenges and opportunities. This contextual knowledge is not used to hold the leader back or force decisions to be made, but is intended to enrich and ground strategic decision making by providing the whole picture. Bad decisions often have devastating results, as witnessed by loss of trust with strategic partners.
For example, following the acquisition of a small West Coast biotech company by a large pharma firm, a key leader from the biotech company retired. To support the transition, we implemented a focused and structured knowledge transfer. Through this work, we identified two critical supplier relationships held by the leader and the history and context of how the contracts were created. On the face of it, these supplier contracts appeared less profitable for the new owners than allowable. But, upon further investigation, these suppliers had visibly supported the biotech when it was too small to have the capital to pay full price. Suppliers in that area understood the relationship, and the company had built credibility and trust because of it. A sudden recontracting would have cost valuable trust, time, and credibility during the leadership change. By negotiating new contracts with different levels over time, the new leadership was able to maintain strong relationships with their suppliers and a positive reputation in the community.
Why Has It Been A Challenge To Share This Contextual Tacit Knowledge With New Leaders?
One reason sharing this knowledge has been a challenge is the lack of process to identify and transfer the knowledge that is not codified. If it’s hard to write it down, it can be difficult to understand the value, until it is needed. Codifying how people interact, the rationale behind decisions made, and the way in which future trends are anticipated or prepared for is critical— but challenging.
The complexity of leadership stems from the fact that they must be able to anticipate, navigate, and handle the upcoming issues facing the industry, the regulators, the consumers, and the company itself, and also quickly understand how the key relationships work, relationships of which there is little or no previous knowledge. In some cases, there is not even awareness the relationships exist. New leaders need to know who to trust and what to trust them for. They need to quickly identify the hot buttons, past issues, motivations, and concerns of the key internal and external people such as key staff, vendors, regulators, and others with whom they must collaborate or lead.
The President of Research for an East Coast based Pharmaceutical company was transitioning out of his role, and we interviewed the New York City-based Corporate CEO, asking him what success would look like if the knowledge transfer for the new research president was successful. The answer was that the new research president would informally ask the CEO to have dinner when next in the city. Asked why that was critical, the CEO replied that the business culture in research was more formal than the way in which the leadership team at corporate worked with each other. It was customary for the leadership team to have dinner or meet after work to discuss issues in a relaxed setting and get to know each other. That would be the true test of whether the new research president was listening to the relational learning he could gather from the knowledge transfer. And, it was true, when the research president was asked if he would invite the CEO to a casual dinner, the reply came back, “No, that would not be good for my career.” When the relational importance and context was provided, the dinner took place and the relationship prospered. This type of relational knowledge is not written anywhere nor should it be. Yet, it is critical for a new leader to maneuver in the relational waters of the new role
So, how can tacit knowledge transfer be used to help bring leaders up to speed more quickly, more effectively? The key is to provide them a framework from which they can gain the critical and relevant knowledge held within the previous leadership and other influential relationships. The framework also helps identify knowledge gaps which, through targeted and well considered questions and dialogue, can be filled. Ninety days provides no time for missteps, and that is the time in which a leader has to make a difference in their new role. The framework acts as a roadmap to move the leader along much more quickly.
The framework is completed using interviews to help identify knowledge in categories such as the organizational knowledge needed to understand how things really get done. No organization chart provides the background in what really happens. Key relationship identification and context has been mentioned as has the industry or business knowledge needed to be agile enough to recognize, anticipate, and act on trends and patterns. The framework also needs to identify not only the technical or scientific knowledge, which underpin the company’s assets, but the rationale for decisions made around those assets and alternatives not taken. Used over time, the framework provides a snapshot via trends and patterns into the leadership and organizational challenges and enhancers.
As the life science industries face new and unchartered waters, new leaders will have fewer of their experienced mentors to call upon. Yet integrating knowledge transfer into all aspects of leadership develop will help accelerate the leader to a high level of sustained success and it will help to bring the organization to that same place.
Kathy Hagen is the principal at K.L. Hagen Intellectual Capital Strategies. She has been doing knowledge transfer work for 16 years with companies such as Deloitte, Pfizer, Bristol-Myers Squibb, and Medtronics.