Lydia Guo, Grace Zhao and Mendy Zhang of executive search firm Egon Zehnder outline some of the latest trends affecting the Chinese pharma sector and what they look for in potential candidates for country manager positions in China.
Major Trends among Top Leaders of MNCs in Chinese Pharma
Localization is a continuous effort among multinational companies at GM level. The two most recent examples are Christine Zhou, taking over from Camilla Sylvest as SVP, President China at Novo Nordisk and Shirley Zhao, taking over from Karl Lintel as GM & President China Mainland & HK of Bristol Myers Squibb. Both happened in 2018 and both contributed to Trend #3.
More Chinese leaders are taking on responsibility beyond China – either regional or international – as a result of increasing recognition of leadership quality and capability in China. To name a few: AstraZeneca has appointed Leon Wang to manage International Markets and Jo Feng to manage Asia – both have managed China before their current roles; Bayer has Wei Jiang managing APAC which includes China; and Xudong Yin at Novartis is in charge of region APMA which includes Asia, Pacific, Middle East and Africa.
Rising female power in China. Egon Zehnder’s 2018 Global Board Diversity Tracker shows that women make up just 3.7 percent of CEOs. Among the Top 20 global pharma companies (according to SCRIP 100 the World’s Top Pharma Companies), there are only two female CEOs – Emma Walmsley at GSK and Jennifer Taubert at J&J Pharmaceutical. China is much more advanced in terms of gender diversity – there are four outstanding female China GMs among these top 20 pharma companies (see below) and they are promoting more female executives to unleash their potential. All of them have extensive experience working at headquarters in their earlier careers which serves as a critical part of their credibility and success today.
The net flow of senior leaders leaving multinational companies to join start-ups or local Chinese companies. Xiaobin Wu, previously chairman at Pfizer, joined Beigene as China President in 2018, which was a flagship move. This trend does not only cover commercial leaders but also R&D leaders who become CEOs of biotech companies driving innovative drug development. Top investment bankers are also grasping this opportunity by joining high growth biotech companies as CFOs.
What Makes a Great GM? A Holistic Approach
At Egon Zehnder, we apply a holistic approach when evaluating China GMs – we look at Past Experience, Present Readiness and Future Potential (see below). For most GM appointments, the commonly referred-to selection criteria is around experience, which looks into the past only. Based on our research and experience, GMs in the pharma industry usually come from sales and marketing backgrounds with solid overseas experience. Over 90 percent of top GMs have sales and marketing backgrounds and around 70 percent of the GMs have overseas experience, either working or studying. The current emerging trend in China of accelerated new drug launches calls for new product launch experience for successful future GMs.
Among all factors of present readiness, competency is the core and includes Result Orientation, Team Leadership, Strategic Orientation, Collaboration and Change Management. Among these, two increasingly important factors in the China market are Collaboration (especially with local government and headquarters) and Change Management, which are demonstrated by a few recent successful innovation examples in China.
Taking AstraZeneca as an example, it has switched attention from selling drugs to providing solutions to patients by setting up disease-focused diagnose and treatment centre, during which process regulators, hospitals, pharmaceutical companies and device companies collaborate to serve patients. The ability to influence global headquarters to invest in all these new initiatives strengthened its commitment to Chinese government. Leon Wang, former China GM of AstraZeneca has demonstrated great ability to collaborate with stakeholders locally and at headquarter to drive all these innovative business models and changes, which set his path to become Head of International Markets.
Novartis globally has been pushing for a Virtual Assistant to support their Sales Reps to better plan their daily activities. This program uses machine learning to sift through information from multiple databases, such as doctors’ prescribing behaviour and academic activities, to suggest the best way to engage with physicians. Sales Reps receive electronic reminders on what to do or to say to make their interactions with physicians as personalized and meaningful as possible. China became the first country to launch a large scale trial among 500 sales reps.
The challenge in China is the fast-changing policy environment and market dynamic – who will win the game in the future? Only looking at experience and competency is not enough as GMs are expected to change business models and drive innovation by leveraging different competency strengths. What sets future leaders apart is actually their potential profile, as their POTENTIAL can predict their competence levels in the future.
We have been assessing executive potential and its co-relation with competence for more than 30 years. The four measurable potential predictors – Curiosity, Insight, Engagement and Determination – correlate strongly with future competence development (see below). Understanding executives’ potential profile and measuring different dimensions of potential will provide insights on which competencies an executive will likely develop and to what degree such competencies will reach. We have found a way to better predict executives’ future competence and we help executives to unleash this potential to further develop.
What makes great GMs in China? Look beyond both critical experience from the past and current competencies and really understand their potential. Succession challenge is increasing given the high expectation and ever changing market environment. Start to identify key talents’ potential and develop them NOW!
Turning Potential into Success: The Missing Link in Leadership Development