“Throwing middle management into the deep end after deciding to outsource, without re-defined processes and appropriate training and tools, is not proving to be very effective.”

As we slip into the modus vivendi of outsourcing most or all of clinical development, a full appreciation of the consequences is still missing at many sponsors.

The most important, and apparently surprising, lesson sponsors are learning is how much work outsourcing takes, when the point was to eliminate the work altogether! Short of reversing the outsourcing course (which I am pleased to see is slowly starting at some companies), the next best thing for us to do is analyze closely the operational opportunities to improve the performance of outsourced trials. Unsurprisingly to students of organizational change, both the risk and the opportunity lie with middle management.

Biopharmaceutical sponsors have seemed to react to suboptimal outsourcing from two extremes. One response is that we’ll work it out on the golf course (executive to executive, in the classic pas de deux where both parties are fatally dependent on each other). At the opposite end, a common solution for biopharma is we’ll shadow our service providers hour by hour, and second-guess them to the point of doubling the effort and cost expended, to no benefit of quality or speed.

What makes most businesses work is the middle: middle management is the forgotten, thankless job that sponsors, having already lopped off the lowest doers, are now energetically bulldozing. This leaves a dangerous gap – the management gap, or put another way, the knowledge gap – where the most important locus of performance assurance lies.

The gap in knowledge of how to effectively run clinical development is plaguing sponsors and service providers alike. The emphasis for both parties has been to maintain scientific and functional knowledge, which is essential. But without sufficient knowledge on how to operationalize the science, sponsors become overly reliant on the service provider, or worse impose suboptimal procedures on the service provider (from ignorance or overwork), which leads to conflict, issues and a deteriorating relationship.

The same characteristics of a healthy in-sourced model apply to effective outsourcing: senior management must provide their people with the resources, guidance and support that will lead to success. Too often the concept has been to assume that the service providers will handle everything – an abdication of responsibility. Throwing middle management into the deep end after deciding to outsource, without re-defined processes and appropriate training and tools, is not proving to be very effective.

The Missing Managers

The competency gap comes from a logical sequence:

• Large-scale outsourcing programs cannot be cost-justified if too much infrastructure is left in house.

• Service providers recognize the need to reassure their customers that all will be taken care of in order to win large-scale contracts.

• As departments are decimated, middle managers leave or are let go.

• The normal cycle of learning by doing, and passing it on to newcomers, is dangerously broken.

Service provider middle managers are also endangered by too high expectations. Left alone and in charge, they are trying to manage development programs which need a sponsor’s product-driven self-interest, but from the well-intentioned position of an output-driven factory floor supervisor.

An obvious fix is to improve the quality of service provider middle managers, but service providers have the same problem sponsors do – where do we find the knowledge and talent? The pool of experience is drying up by the day, and both sponsors and providers have widespread problems in hiring. I like to say the challenge in clinical research is not QA (quality assurance) but “CA” – competency assurance – a much harder challenge. With good pre-hoc CA, we can avoid post-hoc QA problems.

And to add to the dilemma, both sides’ middle managers have the added burden of becoming expert both in their particular research function and also at communicating and working with their counterparts. So even in the best case scenario of two sets of fully-funded and well-meaning middle managers, there is often a critical communication skills gap.

We may have to look outside the industry to get the next generation of managers. It may be easier to teach a talented manager about clinical research, than make an effective manager out of today’s overworked and undertrained staff.

Filling the Gap

There are a number of actions that both sponsor and service provider can take to try and fill the gap. First of all, recognize that the basics of management are harder with outsourcing. Motivating people who work for someone else, with different business objectives, is hard. Correcting their under-performance is even harder.

Secondly, adapt and revise internal departmental and trial conduct processes when outsourcing. Internal processes assume short hand-offs between people who know each other personally. When working only internally, misunderstandings can be clarified relatively easily, because face-to-face contact is so much easier to accomplish, and more frequent. Not so, when the service provider personnel are ten time zones away.

Third, devote time and effort to training middle management on the soft skills required to manage service providers (and for service provider managers to serve their customers). This type of management is very different from managing internal resources – for instance, should you say the same thing in the same way to a direct report or colleague within your company, as you should to your customer or provider?

Overall, maintain and nurture your middle manager staffing. If your budget savings weren’t realized in firing the low-level transactional workers, they are not going to come from firing their managers too – a classic case of cutting off your nose to spite your face. Ensure that internal staff learn, maintain and retain clinical development skills. Focus your governance time and efforts at the operational level, not on remote steering committees, and renegotiate the service provider relationship so that both sides are encouraged to invest in the quality of middle management, and adjust expense/funding/budgeting expectations accordingly.

Biopharma clinical research management should consider the wisdom of the London Underground: mind the gap! In our case, it is the gap of knowledge, manpower, process and oversight between the strategic ideas of customer and service provider. If we step too late, we will be falling onto the third rail of an empty track.