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The importance of openness and loyalty cannot be overlooked when cultivating a parternship.
The pharmaceutical world has not been immune to the global economic situation and, like many sectors, is undergoing a phase of massive restructuring. The aims of these initiatives are no great surprise: reduce costs, improve efficiencies, shorten product development time lines, and bring an increasing number of innovative products to the market as rapidly as possible while maintaining excellent standards. What can pharmaceutical companies and CROs do to achieve these goals and make their global organizations more successful than they are today, and what are the key challenges faced by them?
For all organizations, regardless of industry sector, people are their greatest asset. In such challenging times, all companies have an ever-increasing dependence on their people. For CROs—essentially service organizations—people, their skills, and experience are the key product, with processes and systems in place merely supporting the functions of the team. Investment in these individuals and teams ensures that organizations build, retain, and develop a wealth of knowledge, experience, and flexibility as well as fostering a vitally important level of trust between employees and employers. Trust, and its value in keeping an organization thriving, cannot be underestimated; never more so than in an uncertain climate. Trust between people is also vital for the quick rebuilding and development of new departments, and providing an environment that nurtures and encourages teams to deliver results at the highest level. Steps must be taken by people within organizations to form new partnerships and new networks on both local and global levels to create a new culture, based on trust, to successfully ride the economic rapids. The human factor plays a bigger role in this than any other.
By building trust, forming successful partnerships, and making people across the world feel a real sense of belonging to a caring, highly reputable, and progressive professional organization, everyone can be successful. It's really all about people and how you deal with them. Getting the best expertise on board, training and developing the talent, and placing a high degree of trust in all people will inevitably create an exceptional talent pool to form or re-create a global organization. Creating a vision, making each person feel valued and part of the local picture as well as a key player in the global picture is essential. Showing progression in the organization, developing people, and creating leaders of the future, helps to build and quickly rebuild great organizations.
To be successful, CROs must be prepared to adapt and enlarge their geographic coverage to suit the expanding requirements of their clients. Trust again comes in to play here. Due to the very real and significant costs involved to set up within these regions, the CRO may be taking a rather large leap of faith that its client will provide opportunities for an equally significant return on that investment. With drug development efforts shifting to emerging markets such as the Middle East and India—areas where local cultural differences, regional regulations, and language barriers exist—dependence on local personnel and their expertise is a key driver to success, and developing trusting relationships in these areas poses an even greater challenge. Here, extensive use of communication tools such as face-to-face meetings, integrating the east and west parts of the world to form cohesive project teams, and simply keeping everyone motivated, pose great challenges. It is important for Western management to understand how things function at a local level and it's important for Western-based teams to integrate with their coworkers in emerging markets and quickly establish high degrees of trust. With this comes loyalty, respect, and unison in efforts to achieve common global, as well as local, goals. Some of the key challenges facing expanding organizations are fully appreciating the local ways of working, being able to adapt these to the international standards, and sharing the corporate vision with local experts in the emerging markets or elsewhere. Success at meeting these challenges is an indicative feature of high-performing and successful global teams.
As a consequence of attempting to become established in new geographies quickly and provide new products or service offerings on a global basis, organizations are striving to develop new partnerships with local players. How many of these organizations and their management really know how to work in the spirit of a partnership? How many actually take the bold step to move from transactional, sub-contractor type deals to pure partnership deals where risks and rewards are shared by both parties? This movement away from a transactional emphasis—where the focus can be on a single sale, with little emphasis on customer service—to a relationship emphasis with a focus on customer retention, an orientation to customer values, and with customer service of the highest priority to all employees is a prime example of relationship marketing. Relationship marketing is about forming a two-way interaction between client and supplier and focuses on retaining and maintaining that relationship. In organizations where relationship marketing is the focus, there is much greater emphasis on customer care and involvement, exemplified by a "customer chain" where every member of the staff and all systems and processes within the organization are geared toward satisfying the client. Indeed, the ultimate goal of this manner of interacting with clients is to nurture and develop the relationship through the various stages of a "loyalty ladder" and progress a client from the very beginning when they may be classed as a prospect, through to a stage when the client and supplier very much view each other as key partners and an integral component of each other's business. Partnerships take immense efforts and this word is often used too loosely. While many partnerships are successful, very many fail, to the mutual disappointment of both parties.
So, what is the essence of a long-standing winning partnership? Again, trust must form the basis. New, stable partnerships should be formed for mutual benefit, but each party's goals, and what each party hopes to get out of the partnership, must be clearly understood from the outset. This requires a high degree of openness, frank discussions, and above all, trust, between both parties. Partnerships require efforts from both parties and recognition that a process of learning has to take place. Each party has strengths and weaknesses, and no one is perfect. Successful partnerships can be durable and long-lasting once there is a real understanding between both parties on their common objectives and what each party can gain from each other to benefit their organization and to create a win/win situation for all.
Essential ingredients for a successful partnership include the careful planning of strategy, executing projects, mutually adapting and modifying goals in response to changing business needs, resolving disagreements with understanding, participating, and being accountable for risks on both sides. This is more challenging when there are geographic and cultural differences to consider—it is essential that from the very outset of a relationship with a new client or a new project with an existing client that both parties are completely honest, upfront, and fully comprehensive when it comes to developing an initial proposal. For a CRO/pharma relationship, this approach really does provide the most effective basis for a truly engaging and successful collaboration on a project. Discussing realistic time lines; milestones goals; and aims, and really making an effort to identify potential issues and systems to handle them before they arise. This serves the dual purpose of allowing both organizations to completely plan for any eventuality. The open and honest approach begins to nurture and grow the trust that is so important.
The ongoing trend toward mergers and acquisitions among larger pharmaceutical and biotech companies shows no sign of abating in 2011. Going hand in hand with this trend is the "super pharma" strategy to be risk averse, leading to R&D budgets being slashed (for example, Pfizer has recently announced the closure of its UK-based facility as part of the reorganization of its R&D capacity across the world) and new compounds being bought after completion of Phase I or II. However, this gap in the market for innovative drug discovery is readily being filled by "baby biotechs" which, in turn, has opened up unique opportunities for CROs to work with these companies. With the entire future of their organizations reliant on perhaps one or two candidate compounds, these baby biotechs will be looking to partner with a CRO that truly understands them and who they can trust implicitly with the running of their clinical trials. Those CROs that can demonstrate that they have fully embraced the concept of relationship marketing and all it entails will have significant advantages over their competitors who are lagging behind.
The building of a successful partnership should allow the relationship to continue despite what could be viewed as major changes in either party's circumstances. Indeed, one global CRO had to reevaluate its partnership with a major pharmaceutical company after it had undergone a large merger process. When given the opportunity to rebid to continue providing CRO services, the decision had to be made on whether to take the gamble of significantly lowering costs from the pre-merger level as requested by the new pharmaceutical company. There was potential, but most certainly no guarantee, of significantly increasing the number and range of studies that the sponsor would provide them. The CRO had worked closely in the past with the client and developed an excellent working partnership and high level of trust and was successful in its bid to continue providing CRO services to the pharmaceutical company.
Another prime example of an almost symbiotic relationship is a CRO and pharmaceutical company who have developed a unique "insourcing" partnership. The pharmaceutical company was anxious to save on the costs involved in running clinical studies but at the same time, wanted to maintain a high level of control over the staff that worked on its studies and ensure that it continued to be managed according to its protocols and processes. The CRO therefore agreed to employ, on a permanent and full-time basis, the client's clinical trial staff who would continue in their existing roles. The arrangement allowed the client to continue performing clinical trials with full control and transparent and upfront costs, and the ability to scale up or down depending on requirements. The arrangement obviously required a great deal of trust on the part of the CRO and further enhanced and integrated the partnership between the two organizations.
Once a relationship is established with a client, how should it be maintained and developed? In my opinion, effective communication is the key. Regular, ongoing, and open communication deepens and strengthens the trust between client and supplier. The methods used can be very much dependent on the preferences and circumstances of the individuals involved (some clients may prefer an e-mail, others may feel that a telephone call is preferable). My own inclination is toward regular telephone updates; this can eliminate the to-ing and fro-ing that can so exemplify e-mail communication (and make us wonder if it really is as time-saving as we believe) as well as allowing for a far more personal touch. Cold, matter of fact, black and white text simply does not convey any real emotion and intentions can often be misconstrued. Indeed, the ideal situation would be regular face-to-face meetings, but in the pharmaceutical industry, with CROs and their clients possibly not even located on the same continent, let alone in the same time zone, this is rarely possible. In these situations, major industry exhibitions and conferences are the perfect situation to make face-to-face contact, touch base, and strengthen professional relationships. In the interim, regularly scheduled calls allow for updating of ongoing projects, discussion of potential projects in the pipeline, and avoids a habit forming whereby the client only receives calls to communicate problems.
This continuing reference to "open" communication and interaction is not unintentional. On those, hopefully rare, instances where it is necessary for either party to report an issue that has the potential to adversely affect the outcome of a study, it's vital that this is reported as quickly, thoroughly, and openly as possible. No attempt should be made to cover up any issues as ultimately, in the long term, this will simply lead to more problems. The trust that has been so carefully developed should not be put at risk by omissions. Honesty, as so often is the case, really is the best policy.
Rabinder Buttar, PhD, is President and CEO of ClinTec International, 133 Finnieston Street, Glasgow, UK, e-mail: firstname.lastname@example.org.