Stephen Frost considers whether pharma is too introspective to be truly inclusive?
The pharma industry is of paramount importance to the global economy and society. It’s certainly diverse, in terms of nationality and culture at least, but it could be more inclusive. Part of its problem is insularity in hiring practices and an over-confidence in its own abilities. Whilst there has been good collaboration over the COVID-19 pandemic, questions remain around whether the industry can successfully meet diverse and new patient and customer needs if it hasn’t yet fully embraced inclusion amongst its own staff base.
How diverse is pharma?
When Reshma Kewalramani was appointed chief executive of Vertex Pharmaceuticals she become one of just two female CEOs in the top 25 pharma companies worldwide. Of the top 35 we have worked with, Emma Walmsley at GlaxoSmithKline, Marie France Tschudin at Novartis and Heather Bresch at Mylan stand out joining Reshma as the only four female leaders. Compared with any other major industry that level of gender diversity is low. Kenneth Frazier, CEO of Merck, is the only African American CEO in the top 35.
Cynthia Challener, scientific content director at Nice Insight, pointed out that the pharma industry features less gender and ethnic diversity than other industries in the Fortune 500, with one-third of the top 50 pharma companies having no women on their boards, and only 8% of board seats held by ethnically diverse directors, compared with 14% for the Fortune 500 overall. The board diversity that exists often relies on non-executive positions.
The problem is the pipeline. Graduate programmes and lower management levels display more diversity but from middle management onwards it becomes a male game. If the industry still lacks diversity in its decision-making positions, can it truly claim to be inclusive?
How inclusive is pharma?
Every major pharma company undertakes some form of diversity and inclusion work. However, that doesn’t mean it’s reaching the decision-makers. The CEO of one top 25 pharma company told me that he “didn’t want to be inclusive”. In his mind, being inclusive was a charitable activity not directly related to the success of his business. Business success and being inclusive were perceived as mutually exclusive. To his credit, he has significantly evolved his view, but I know many more who have not.
Inclusion can be measured by analysing those behaviours that contribute to or detract from inclusion. The majority of pharma companies are still reliant on ‘pulse surveys’ that are a poor indicator of inclusion. We have instead used an inclusion diagnostic in several organisations.
For example, if we measure psychological safety by asking questions about ability to speak up and challenge your boss without fear of retribution, we get an insight into whether pharma is cultivating an inclusive culture or not. When we have conducted an inclusion diagnostic, we found poorer levels of psychological safety among those groups that are still under-represented in pharma.
To increase inclusion, we need to improve their psychological safety and perceptions of fairness over a range of indicators. This is not only a moral question; it is directly related to the effectiveness of decision-making.
How insular is pharma?
This month, we spoke to 13 professionals in diversity roles in six separate pharma companies. Twelve of them said pharma was either very or somewhat insular in its hiring practices. We could take outside industry churn as a measure of openness to new people and ideas. When compared to almost any other sector, pharma does not recruit from outside.
Perhaps more worrying than just the internal work is that many pharma companies are not properly considering inclusion in their consumer work. Seven of our colleagues said their organisation considered the diversity of its customer base when discussing how best to meet consumer needs. However, six said the opposite. When a new pharma CEO was appointed, he privately acknowledged he wanted to use inclusion and diversity to provoke the executive team. In his view the executive was too comfortable, too insular and too resistant to change.
Reasons for insularity
In my years working alongside executives in the industry I have personally witnessed brilliant innovation, excellent people management and the highest ethical standards. However, is its success part of the problem? When you have such an abundance of resources within, might you be less inclined to look elsewhere?
With an obvious scientific bias, there is less credence given to people’s ‘lived experience’ because it’s harder to quantify. This can result in an empathy deficit. When the diversity business case only offers correlation, not causation, many executives may dismiss its contribution to business and scientific outcomes. When many executives are working hard on complex briefs there may be limited additional cognitive capacity available for empathy. When their companies are doing well, they may rely on their own view, rather than inviting challenge from the outside.
According to Katy Wallace, principal consultant, Life Sciences Practice, Berwick Partners, change is often driven by underperformance. High margin, cash-rich pharma businesses are just not experiencing the same amount of external pressure as other sectors to address the issue and make the necessary changes.
Signs of progress
Of the 13 diversity and inclusion professionals we surveyed, all of them said their work had been at least somewhat effective in changing culture. Examples included employee resource groups and internal communications, participation in external benchmarks, celebrating significant dates, for example raising the Pride flag on IDAHO day and training, specifically unconscious bias training. Others went further, to have diversity strands in core business (eg research policy) and work closely with patient advocacy groups and have diversity-focused clinical trials. However, all admitted there was much still to do, especially going beyond gender, including disabled people, and increasing customer segmentation.
We asked for specific examples of how embracing diversity and inclusion has improved innovation. Examples included hiring of strong talent in R&D and Business Development leading to a good pipeline and notable deals, solving for manufacturing challenges during COVID-19 and the launch of new drugs as a result of people challenging orthodoxy and targeting a different population.
Examples of how embracing diversity and inclusion has improved profitability included meeting patient needs, informed by a diverse team, making the company more relevant; mitigating risk in the supply chain to continue to deliver needed products to consumers, families and patients and demonstrating inclusion and diversity in advertising campaigns so that more consumers can relate to the product.
A way forward
The good news is diversity is now high on the agenda. We just need to progress to more inclusion. The future of medication is increasing individualisation – without realising the ‘diversity’ of people/patients, pharma companies will not be able to provide future medication. Without being inclusive, pharma would only provide medication of the ‘standard male person’. According to one D&I professional, there’re still “glaring examples of people preferring to hire or promote those similar to their background”.
COVID-19 has been a milestone collaboration. Opening up labs for rapid testing, co-operation between firms and release of staff for medical duties. Diversity is now featuring in clinical trials. We now need to move from diversity to inclusion, start measuring inclusion properly and start embedding inclusion throughout the business cycle. We need to challenge scientific bias head-on and appreciate that inclusion is more than a technical fix, it’s a behavioural methodology that can help science and achieve better outcomes for all of us.
Stephen Frost is the founder of global diversity and inclusion consultancy Frost Included and co-author of new book Building
An Inclusive Organisation