SOURCE: The Boston Consulting Group

The Boston Consulting Group

January 25, 2016 16:31 ET

Organizational Effectiveness Is the Strongest Lever for Boosting Productivity in Biopharma R&D

Outlier R&D Organizations, Which Generate Three Times More Value Than the Industry Average, Are Differentiated Mainly by Their Strong Organizational Effectiveness, a Report by Bristol-Myers Squibb and BCG Reveals

BOSTON, MA--(Marketwired - Jan 25, 2016) - R&D productivity in the biopharma industry has been notoriously low, except for a few outlier companies. The key differentiator between these high performers and the rest is their organizational effectiveness, according to a new report published jointly by The Boston Consulting Group (BCG) and Bristol-Myers Squibb. The report goes on to argue that such effectiveness is achievable by other biopharma companies, provided they take appropriate measures.

Notwithstanding a recent uptick, biopharma R&D productivity remains subdued. Most of the dampers usually cited are common across companies. Yet performance varies widely, with a group of outliers consistently registering productivity three times higher than the typical current level. What distinguishes these outliers is their strong organizational effectiveness, which is primarily about productive teamwork toward the goals of the organization. The best way for other companies to boost their productivity is to enhance their own organizational effectiveness, suggests the report, which was released today. The report, titled Unlocking Productivity in Biopharma R&D: The Key to Outperforming, shows how companies can accomplish that by drawing on the principles of Smart Simplicity, a ground-breaking approach to managing organizational complexity.

"We know that a number of biopharma companies substantially outshine their peers in R&D productivity, despite laboring under the same industry pressures," said Peter Tollman, PhD, BCG Senior Partner and Managing Director. "We have clear evidence that the highest-performing companies all share a single differentiating factor -- strong organizational effectiveness. Other companies, too, can improve their productivity, and in that way generate greater value for patients, as well as secure decent returns on their R&D investment."

An In-Depth Look at One Outperformer
The report cites the case of Bristol-Myers Squibb, a notable industry outperformer that has a tradition of conscientiously attending to organizational effectiveness and hence maintaining high R&D productivity. In its efforts to continually reinforce its performance, the company recently undertook a five-part initiative powered by the principles of Smart Simplicity. "By pursuing this five-point program, we aim to further improve our ability to work together effectively, reinforce high productivity, and continue to accelerate the speed with which we deliver transformational medicines to patients," said Francis Cuss, MB BChir, FRCP, Chief Scientific Officer at Bristol-Myers Squibb.

"Other R&D organizations have their own strengths and weaknesses, so they will have to design a program that is different from ours," added Paul Biondi, Senior Vice President of Business Development and formerly head of R&D Operations at Bristol-Myers Squibb. "But they can learn a lot from our experience. The general lesson is universal: if you are concerned about the productivity level of your R&D organization, you should set about finding ways to enhance its organizational effectiveness."

A final comment came from Valery Panier, PhD, a BCG Senior Partner and Managing Director and another of the report's coauthors: "The outlier companies have shaped their R&D environment deliberately. It's an environment that optimizes workforce behaviors--behaviors that are cooperative and that align with company goals. Almost any company can increase its own R&D productivity in this way, and in doing so, it will also benefit the industry as a whole and the health of patients throughout the world."

A copy of the report can be downloaded at www.bcgperspectives.com.
To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.

About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 82 offices in 46 countries. For more information, please visit bcg.com.

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    Tel +1 617 850 3783
    gregoire.eric@bcg.com