John Connolly’s expertise in the pharmaceutical industry comes from a career that has spanned over 20 years. During that time he has progressively gained industry knowledge through roles in sales, marketing, business development and general management at companies that include Pfizer and Eli Lilly. He is currently Vice President Russia and CIS and General Manager Russia at Valeant Pharmaceuticals.
Connolly graduated from Duke University’s Fuqua School of Business Global Executive MBA program in 1998 and currently serves on the school’s regional advisory board for Russia/CIS. He shared his insight into the pharma industry and leadership in a Fuqua Q&A.
Q) Your entire career has been within the pharma industry. What elements of working in that space do you most enjoy?
Firstly, the industry is constantly changing. Personally, I enjoy change and when I reflect back on what the industry was like 20 years ago and today, the industry has changed enormously—from the expansion to emerging markets, to the emergence of biological products, and new models of doing business using new technologies.
Secondly, working in pharmaceuticals makes you feel good as a person. The products which are researched, manufactured and marketed, improve people’s lives by treating diseases and extending life spans. There have been massive breakthroughs in the areas of oncology, mental health illnesses and immunological disease treatments over the last 20 years and millions of people’s lives have been changed as a result.
Lastly, the industry, like many other industries is run by a community. Having worked 24 years in the same industry it is great to see people I worked with, or who even reported to me 10 or 15 years ago, now running large businesses successfully.
Q) Describe some of the challenges you face when your products are sold in countries that can have vastly different regulatory systems and requirements.
A key challenge for any company is what is called ‘Speed to Market.’ In many emerging markets, and even Japan, local clinical trials are required. While it can help with the local marketing of the products as you will have local studies, it means you may enter that market later than in the EU or US for example. How you communicate with physicians and patients/consumers may be regulated differently, even between neighboring countries. This is a challenge for global marketing teams as it means the strategy must be localized.
Q) You’ve worked for several of the world’s largest pharma companies. In your experience, how can a company’s unique culture influence how it conducts business?
Much is written about ‘Entrepreneurship’ but my observation is that in emerging markets, a more entrepreneurial culture often leads to greater success. It is one reason perhaps why in Eastern Europe and Russia mid-size European companies, often privately owned, remain very strong performers in the pharmaceutical industry.
A common trait among all the companies I have been privileged to work for has been ‘Ethics.’ From my own experience it will influence your strategic choices. It may mean not entering certain geographies or certain business segments or accepting to have a smaller business. That said, it is the right and only way to work and have a sustainable business.
Another common trait is ‘Innovation.’ Clearly this refers to R&D for big pharma but on the operational level it means trying to improve how you operate. The Six Sigma approach has been adopted by some pharmaceutical companies. We look at supply chain models of the auto and fast-moving consumer goods industries to improve this area, and as consumers become more informed and involved in their own medical treatment we look at ways to improve customer service and connect with patients in a better way. Business is more competitive than 20 years ago and continuous innovation allows you to remain competitive in a fast changing environment.
Q) With mergers and acquisitions playing such a major role in how pharma companies grow, what are some of the most important factors to consider when targeting and integrating a company?
Given the level of activity in the pharmaceutical business this year, your question is very relevant. That said though, our industry has undergone enormous changes in the last 20 years. One only needs to think of companies which were once household names but no longer exist as companies, though often their names continue to thrive—such is the brand power of some pharmaceutical companies.
Apart from the obvious financial factors, which drive any evaluation of a target company, I prefer to place a great emphasis on the soft factors. Firstly, when acquiring a target you need to consider the speed with which a deal can be approved and the integration process begun. If there is a long time from deal announcement to closure to integration, it can lead to procrastination of decision making which is not good for the acquirer or the target. My personal advice post-closing of a deal is to move quickly, especially on the tougher decisions.
Secondly, and equally important is what I call knowledge transfer. This concerns people, and if the integration is to be successful it is important that the knowledge be retained and then developed in the new company. Partially related to this is the cultural fit between two companies and this is again people-driven as the culture of a company is embodied through its employees. Communicating the culture and even being open-minded enough to embrace elements from a target company’s culture are successful elements of integration. Remember that people have had an information vacuum prior to the integration process starting, and therefore getting out there and communicating upfront and openly can only be of benefit to the new employees.
Q) What are some of the tools you’ve found to be the most successful in motivating your teams?
A little acronym I have carried with me since the Global Executive MBA program is TEAM (Together Everybody Achieves More). Inclusion and feeling part of the success is important to people. It is as equally important for the office-based employees or operator at a manufacturing site as it is for the lone salesman. Starting from very simple things I believe in showing presence, asking questions, and being involved in different aspects of the business. This alone can be motivational for people. Of course, yet again communication plays an important role in this.
I believe that little things often mean a lot to people, so a simple ‘thank you’ note or ‘well done’ to people from time to time goes a long way. I also believe, no matter what the culture, that respect for people is motivational. If you ‘walk the talk’ and have a strong values system which is implemented by the leadership of the company, this increases trust in both the leadership and the company.
Finally, involvement is important. No leader knows everything. Involving people in decision-making helps with their development and leads to better decisions and buy-in. While monetary recognition is important, people also want to learn and develop and feel that they are part of the team ‘making things happen.’ Involvement is key to this.