There’s no time like tough times to get people to accept improvements to the status quo.

In these difficult times, we should step away from software details for a moment and think about what the technology industry can teach biopharma about dealing with a recession. There is a lot to learn, a lot to teach. Pharmaceutical companies have been mostly immune from the hard times that “high tech” has gone through severely at least twice – the late 80s/early 90s minicomputer/telecomm slide, and the dotcom bust at the turn of the century. In both instances, technology companies were leading the way in paying for major strategic mistakes, poor crisis management, and large doses of hubris. Pharma, clinical research technology companies, and consumers of clinical research technology all have lessons to learn from these experiences.

Lessons for Pharma

Large organizations faced with relatively sudden financial setbacks will tend to follow one of two suboptimal paths:

• Make broad, universal, indiscriminate cuts with little consultation with middle management; or

• “Hope for the best”, turn the unfamiliarity with the circumstances into a virtue, and try to hold on with minimal cuts.

The first option is usually quite damaging – the cuts are made purely on financial metrics, and targets are handed down through the management chain without a re-evaluation of corporate purpose, direction, competencies and sources of cost. Being relatively indiscriminate, cost-cutting in this way is demoralizing to staff, producing a degree of cynicism, and leaves middle management struggling with arbitrary new staffing levels.

The second option is equally or more damaging, and is likely to be more common in pharma. One can call this “death by a million little jabs”. One too-small layoff leads to another too-small layoff, and another, seemingly endlessly. The best staff will flee the company because the lose faith in management’s hold on the situation and cannot abide the dark cloud which now hangs over the office. Rather than one cataclysmic disruption (which staff can put behind them if they know it’s over), the piecemeal method is particular disruptive to the project team approach which almost all clinical development staff are working in. The uncertainty of “who’s next” can take up half your day. The project may continue but be underfunded. Reserve funds to handle clinical trials’ inevitable surprises may have dried up. And many staff may be more focused on looking to what other company they should jump to rather than the project at hand.

How does a company handle hard times more effectively? The answer of course would lie in many books, not a paragraph, and will depend on your company’s inherent strengths, weaknesses and personality. But judging from high tech’s failings over the last quarter-century, four things come quickly to mind:

One way to avoid the dilemma described above is to know who or what you want to keep, and how to do so, ahead of time. In other words, you should have been planning for this, and if you haven’t, it’s never too late to try to catch up. You always have a chance to improve your downsizing performance so that your recovery performance will outshine the competition and protect your employees best. So make a plan, and continually update it. It should be not just about individuals, but about core competencies and fact-based evaluations of productive and non-productive corporate activities.

Use unusual times to do business unusually. It will sound callous to those losing their jobs, but tough times create an opportunity –very rare in large, traditionally successful companies like pharma – where steps can be taken that would never be risked in normal times. If ever there wasn’t a time to say “we always do it that way,” it would be now. And this extends from the boardroom to the study team conference room.

Overcome traditional resistance to change and implement those process efficiency improvements. Every company has lots of good ideas for improving operational efficiency already sitting on their shelves. Long delayed because of entrenched political resistance or the feeling that we don’t have any time, there’s no time like tough times to get people to accept improvements to the status quo even if they are not ready for dramatic upheaval.

Sustain executive visibility, throughout whatever activities you pursue. A common mistake in tough times is for executives to disappear behind closed doors and worry themselves to distraction while creating widespread mistrust and rumor-mongering in the hallways. Top leadership should be more visible, not less. Answer the questions you can, think about the staff feedback you are getting, and let staff know you still care for them and what they are working on.

Lessons for Clinical Research IT Companies

Clinical research information technology companies are especially vulnerable in this recession, because almost none of their leadership has lived through times like these in this market. This compounds the fundamental fact that most clinical IT companies are extremely small, economically fragile, too dependent on a small number of customers, and equally too dependent on a handful of key staff who might be driven to leave in times of such uncertainty. The lessons for these companies from high tech’s past are those most likely to seem counter-intuitive:

Maintain or expand your marketing presence: reassure your customers that you are still here and are strong enough to be a worthy partner.

Maintain or expand customer service: at this point, your services are more important than your technology features. Improving customer satisfaction builds lifesaving loyalty in tough times.

Innovate in services and in cheap feature delighters: a little will go a long way in these times. Demonstrate that you are still investing in your product, and that you know your customers’ needs well, by bringing new value to market, however modest.

Lessons for Clinical IT Consumers

Clinical IT consumers have to combine a good understanding of both sets of lessons above. You have the responsibility to continue excellent operational execution regardless of the financial atmosphere. So:

Look for management maturity from your supplier – one can hope that might mean they will handle these times more steadily.

Look for simplicity and robustness in your solution choices – they will make your tools easier to maintain in lean times.

Implement rigorous but supportive vendor management – despite the burden, you will need to spend more time managing your vendors, more closely, and yet this can be supportive to the vendor and make the difference between confidence and bankruptcy.

It’s no fun for anyone right now. Knowledge is the best defense against an uncertain future, besides luck, which I wish to all of us.