Credit: International Institute for Management Development (IMD)
This February, I have decided to return to the topic of future readiness of pharmaceutical companies. It is a topic which has been gnawing away at me for well over a year, even before I first wrote about it (see Pulse 19 March 2024).
Future readiness – a company’s adaptability to long-term, significant trends – as a key performance indicator is not an official metric. But that doesn’t invalidate it. On the contrary. Unlike financial reporting or environmental reporting, or even equalities reporting (the so-called triple bottom line), it is not regulated.
This is important, hear me out
Future readiness is, however, of immense significance for anyone interested in building enduring value and for growing business reputation as well as trading performance. If ‘readiness’ can be quantified then finding a reliable measurement of future readiness would provide for better board-level decision making, as well as insight for investors in those businesses.
Thankfully, such a metric exists and we are grateful to Howard Yu and to the International Institute for Management Development (IMD) which in 2022 published its inaugural Future Readiness Report.
The research by Howard Yu and the Centre for Future Readiness at IMD is extraordinarily helpful. Highlighting 25 sector leaders across 2022, 2023 and 2024, IMD Future Readiness Report tracks and charts each of their organisations, and assigns a future readiness composite score derived from 8 metrics IMD evaluates:
- Financial fundamentals
- Investor’s expectations of future growth
- Employee diversity / ESG
- Research & development
- Early result of innovation
- Business diversity
- Cash & debts
- Pharma pipeline
The work benefits from the rigor you would expect from IMD, recognised as one of the leading management institutes in the world, and in my view the analysis is entirely credible.
Scores and rankings are clear and smart, published as open access and publicly available via the IMD website, not behind an academic or commercial paywall.
Drawing from each of the Future Readiness reports, I took the time to assemble a single table to show the three years which I then viewed by 2024 rank in descending order where 1 is the highest.
Fig 1. Table of annual rankings and scores 2022-2024 per company derived from IMD Future Readiness Reports.
According to the results given by IMD Future Readiness Reports across the three years, I could immediately appreciate some remarkable observations:
- Making the most improvement: Novo Nordisk demonstrates the most significant improvement. It jumped from 13th in 2022 to 2nd in 2024, and its composite score increased by 57.7 points, from 41.0 to 98.7 in 2022 and 2024 respectively.
- Making the least improvement: CSL shows the least improvement. While its rank shifted slightly, from 15th in 2022 to 22nd in 2024, its composite score decreased by 8.9 points, from 35.2 to 26.3 across the same time span.
- Making the most consistent performance: Johnson & Johnson shows the most consistent performance, maintaining its 8th position in 2022 and 2023 before moving slightly to 6th in 2024. Its composite scores have also remained stable across the three years relative to the other companies in the study.
Fig 2. Novo Nordisk Overall Performance. Source: IMD Future Readiness Indicator
In a future post, I might well drill down further into why I think these companies stand out like that. For now anyway, I will satisfy my relentless curiosity by inviting you to place a comment below my conclusion, telling me what you are thinking. I promise to read and consider every comment.
Now that I’ve outlined background context and set the scene, this is where you come in.
It is not so much the 25 pharmaceutical companies named in the IMD reports that I am most concerned about. Mindful that, for the most part, they each have the resources to throw at the problem. Whether that is the comparative luxury of internal IT divisions or global outsource service providers.
My main concern is for others elsewhere in the food chain. By which I mean the small and medium size companies involved in drug discovery and therapeutic development. What of these brilliant companies whose business model is agility and responsiveness?
And what of contract research organisations (CROs), contract manufacturing organisations (CMOs), and contract development and manufacturing organisations (CDMOs) whose very business model and funding model centres on their clients being ‘first to market’ with innovative breakthrough drugs and therapies?
Bear with me, I’m going somewhere with this
IMD itself recognises the move by pharmaceutical companies toward greater AI integration; in its 2024 report on Future Readiness it highlighted: “AI integration is transforming drug discovery and the success of GLP-1 medications has reshaped the industry landscape.” and in its trends analysis, IMD put in first place: “Integration of artificial intelligence (AI) in drug discovery and development”.
That says something to me. What does it say to you?
Fig 3. Simplified schematic illustrating five stages required for running
In all I have learned directly from the biotech and pharmaceutical sector, my assessment is that researchers don’t have it easy. Data they need to perform their research must be gathered from different sources which is prepared to different standards and formats.
Data must first be normalised and harmonised before it can be analysed for in silico simulations.
And that’s slowing down research effort, especially where research involves omic or multi-omics data sets. Their needs are increasingly served by the use of AI tools; for that you have to think beyond capabilities of traditional extract-transform-load (ETL) or extract-load-transform (ELT) tools.
A lot of that can be remedied at source. For example, adoption of Standard Operating Procedures (SOPs) in labs is certainly not new but is all too often still paperwork based.
Lab mangers and technicians seem encumbered by an over-reliance on paper-based methods for tracking, logging and reporting their workflows. A shared computer in the corner of a lab is simply insufficient as an answer. It’s happening less and less but it’s crazy that this is still happening at all.
Stronger reasons would need to found to resist change if all the heavy lifting was done for you; the hardest thing about adopting the digital approach is not the technology but simply making the decision to do it.
Owning the challenge
Digital methods for workflow and processes, able to capture steps of a test or development process progressively in real-time, with built in timers where required and the ability to pause the process at given points. That’s got to be a better approach.
Replacing all the clipboards with a suite of integrated software modules configurable to the needs of the final user with all steps clearly displayed, logged and verifiable. That’s got to be better solution.
Couple that with electronic interfaces to provide machine-to-machine connectivity, that will drive data collection and data exchange to and from the workflow and process software. It is all possible with well-designed software which exists today.
Application programming interfaces (APIs) make the necessary connections and interconnections in a secure and easily manageable way. That’s a solution approach which is proven in multiple industries so why does it appear to be frequently absent or somehow unachievable in the pharmaceuticals sector?
Data Ethics matter for future readiness
Digitising the process, enabling the labs to adhere to SOPs, logging what they do as they work in real time, pausing where required, saving clean and auditable data will pay huge near term dividends when running audits for compliance, certifications and licences. That is important on its own merits, as anyone working in Quality Management or Regulatory Affairs will tell you.
And beyond that, the data created through that compliance becomes an asset. With a value. A great value. To your own research efforts. To the research efforts of others you authorise to share that data.
Still feeling sceptical?
Suddenly all this takes on a whole new meaning, doesn’t it. I am hoping that, if you have followed the logic of my argument, or rather if I have outlined it sufficiently clearly, then by now a picture should be emerging of why such electronic systems of record are not a cost centre or a ‘be all and end all’ some people take them for; in fact they are a facilitator of growth and a profit centre. Crucially in this context, think of tailored compliance software as a contributor to future readiness.
Conclusion
Drug discovery and therapeutics development serves human progress. I am persuaded that future readiness for biotech and pharma companies (of all sizes) equates to the capacity of those companies for serving human progress. I am also persuaded that those companies could make better use of technology which exists for tailored compliance, which drives more optimal processes, which drive data collection and aggregation to recognised commonly-accepted data standards, which in turn drives reusability of that data by qualified researchers to speed up in silico simulations and the power of computational medicine.
Suggested questions you can ask yourself
If you currently work for one of the 25 pharmaceutical companies named in these IMD reports what evidence do you see that your company wishes to improve its future readiness and hence its ranking?
If you work for a small and medium size pharmaceutical company not featured in these IMD reports what lessons from the reports would you apply to your organisation to improve its future readiness?
Suggested actions you can take
If you have specific questions then let’s have an informal chat. Contact me and I’ll give you upto 30 minutes on a call.
If you think you need a deeper dive on any aspect then let’s run an online workshop. Reserve 45 minutes in your diary and I’ll match that with 45 minutes in mine. I’ll include a demo with data showing real SOPs.
If you find you’re overwhelmed by the change required but know that the complexity needs to be resolved then invite me and my team to come in and we’ll simplify it for you.
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No AI has been used in writing this Pulse post, except in the summary table where Microsoft’s Copilot and Google’s Gemini tools were used for validating what I had manually compiled. Any errors and omissions are mine, as are the opinions which I have expressed.
Acknowledgements: Howard Yu , IMD
References
IMD World Competitiveness Center. (2022). Future Readiness Indicator – Pharmaceutical. Retrieved from https://www.imd.org/future-readiness-indicator/home/pharmaceuticals-2022/
IMD World Competitiveness Center. (2023). Future Readiness Indicator – Pharmaceutical. Retrieved from https://www.imd.org/future-readiness-indicator/home/pharmaceuticals-2023/
IMD World Competitiveness Center. (2024). Future Readiness Indicator – Pharmaceutical. Retrieved from https://www.imd.org/future-readiness-indicator/home/pharmaceuticals-2024/
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