As this is being written, word came across that IMS, that venerable organization of pharma marketing research, was about to lay off 10% of its work force. As one might expect, this reduction was couched in terms of restructuring, right sizing, etc. But at the bottom line, the harsh truth was that 10% of IMS employees would lose their jobs as part of an effort to bolster sagging financial performance.
By the time this is published, this will not be news. So you might well ask what is my point if not to announce the downsizing? First and foremost is the reminder that the amount of marketing research business placed by pharma companies in the US dropped by some 25% last year.
Often it takes an outsider's view to point out the obvious. Accordingly, this second point is not mine but an observation made by a Swiss banker spouse of a GfK colleague. He responded to the news by submitting that the industry had best do something to adapt its business to a world that is changing. He commented that the 10% reduction appeared a bit rounded and arbitrary. In fact, he said, the continued existence of these businesses might well depend on a more well thought-out restructuring, since changes of this magnitude can not be ignored. I believe it is relatively clear to all involved that the toughening times in the industry are not cyclical, but rather part of a downward trend that is likely to continue.
Perhaps a more preferable means to survive turbulent times is to plan in advance to avoid such an extreme measure as staff reductions. By examining current ways of doing business, assessing other approaches and eliminating inefficiencies, a company can become nimble and be prepared to adapt to change when it needs to and, ultimately, manage even in challenging times to retain its most valuable resources: its employees and intellectual capital.
Richard Vanderveer is group CEO, GfK US Healthcare Companies