I’ve long argued, in my shorthand way, that only a handful of CEOs have a positive effect on their companies. The vast majority either engage in major change for the sake of major change, are blind to industry trends, or are too ineffectual to guide their companies.
My bias derives from two facts: I’ve never worked at a major company, and I’ve been writing about the pharma industry for the past dozen years.
Too harsh? Look in the “What I’m Reading” section and check out the link to Inside Pfizer’s Palace Coup for some serious reporting about how dysfunctional the largest company in our industry became during the regime of its previous chief executive officer. Another great example would be a healthcare company that suffers massive quality issues leading to an unending series of recalls, billions in losses, and a federal lawsuit relating to a faulty hip replacement device, but can’t part with its CEO because . . . the problems somehow could be worse without him? (This CEO received a 3% “merit pay” raise last year and was praised by his company’s board for steering the ship in tough waters.)
Of course, value-destroying executives aren’t limited to the pharma business; we see them across the spectrum, some with “new sheriff in town” declarations and “no more business as usual” strategies that take their firms into markets where they have no business operating.
And then there’s Steve Jobs, who died this week, seven years after being diagnosed with pancreatic cancer. During his second run as Apple’s chief executive officer, he helped launch a series of devices and businesses that — it’s a cliche, but it’s true — have changed our world. He’d be at the top of any list of CEOs who “made a difference.” In fact, his death raises questions about how well the company will perform in the future without his input. Can you think of another major industrial that would face existential questions after the loss of its CEO?
What’s most impressive to me is that Apple has managed to stay flexible despite scaling up to (briefly) become the highest valued company in the world. Mr. Jobs recruited Tim Cook, the man who decided to get rid of Apple’s internal manufacturing operations and go with contract manufacturers (and signed off on the decision).
I don’t know how you get around the problem of stagnation at the top, because someone has to be the bigwig at mega-firms, and it’s clearly not going to be me. But I bet operational flexibility makes a good starting point.
What I’m Reading
How A Black-And-White View Of Pharma Companies Blinds Us To Real Problems
Matthew Herper, Forbes – onforb.es/rmEufo
Comment: He explores some unintended consequences of pharma payment disclosure, including the tendency to portray large pharma companies as evil manipulators. He walks a fine line in calling for both transparency and level-headedness.
Pfizer’s Future: A Niche Blockbuster
Jonathan D. Rockoff, Wall Street Journal – on.wsj.com/olqJXN
Comment: The story of Xalkori, Pfizer’s niche treatment for a rare lung cancer. Not just another “It’s the era of personalized medicine!” article.
Inside Pfizer’s Palace Coup
Peter Elkind, Jennifer Reingold, Doris Burke, Fortune – bit.ly/mZWMoT
Comment: And then there’s the post-mortem of Jeff Kindler’s reign at Pfizer. The reporters go in depth to find out why he resigned so abruptly last December, but raise almost as many questions as they answer, yielding “a saga of ambition, intrigue, backstabbing, and betrayal,” in their words.
Life, by Keith Richards (with James Fox)
Comment: Fantastic memoir from the lead guitarist of the Rolling Stones, and not just a “greatest hits” of trashed hotel rooms and life with Mick. I thought about putting this in the “Pharma” section, since pharmaceuticals do play a significant role in the book.
What are you reading?
Let me know — at email@example.com, www.goodreads.com/groth, www.linkedin.com/groups?gid=1775433 or www.facebook.com/contractpharma — and the first respondent wins a prize!
This issue’s winner is Laura Rainey of Chemir Analytical Services, who writes to tell us she just read State of Wonder by Ann Patchett. “It’s a novel about a pharma researcher sent to the Amazon to find her missing colleague, and it’s wonderful!”
Gil Y. Roth has been the editor of Contract Pharma since its debut in 1999. He can be reached at firstname.lastname@example.org.