Pharmaceutical giant AstraZeneca has had a difficult recent history and like many businesses it faces some tough challenges in the near future. Jon Kirby, CIO at the Anglo-Swedish organisation, is part of a new leadership team facing up to those challenges.
On 1 October 2012, Pascal Soriot took over as AstraZeneca chief executive, an appointment which market watchers hope will stabilise the company that lost its CEO in April 2012 and continue the transformation needed following the 28 per cent drop in second quarter profits reported in July 2012.
AstraZeneca is Britain’s second largest pharmaceutical manufacturer. Listed on the London Stock Exchange, the company specialises in treatments for major diseases in six key areas of healthcare: cancer, cardiovascular, gastrointestinal, infection, neuroscience, and respiratory and inflammation.
A merger between Sweden’s AstraAB and the UK’s Zeneca group formed today’s FTSE 100-listed organisation in 1999, and while Britain, Sweden and the US remain its core operating hubs, the company has a growing presence in emerging markets and is very much a global corporation, operating in more than 100 nations.
“AstraZeneca is a pure-play pharmaceutical company – we have not diversified into areas like pet foods or toothbrushes,” CIO Kirby explains of the company that reported revenues of $32bn in 2011.
Drug patents form a vital revenue pillar for pharmaceutical firms, and AstraZeneca, like many of its market rivals, see a lot of their patents expire every year. As a result, Kirby explains that pharmaceutical manufacturers must constantly improve their research and development (R&D) capabilities to bring new drugs to market.
“We are driving improvements in R&D, productivity and the quality of the pipeline to get new products to market and help the business development when there are mergers and acquisitions,” he says of the management team.
“The industry faces a lot of real challenges. Regulators around the world are becoming a lot more challenging towards the ethics and benefits of a drug, so that brings new problems: drugs have to be differentiated and approved by the regulators, so physicians will have less control over what they prescribe,” he says of the economic challenge that governments and health services are tackling.
“Healthcare is a burden on countries and there is increased access to generic medicines. So AstraZeneca has to focus on how it effectively develops, sells and markets. This is a highly complex business, and unnecessarily so in some cases,” he says.
Kirby became CIO in 2010 following an internal move from procurement. One of his first tasks was to realign the IS function so it was central to responding to the challenges AstraZeneca faces and could deliver competitive advantage.
“IS has not always been fully aligned and not seen as a source of competitive advantage. Yet there isn’t a single part of the business strategy that cannot be done without IS,” he explains.
“We are an information-driven business, so we have positioned ourselves a lot more effectively now. Information is the core thing, not the technology, and that is what is driving the way we work. So we have a much more business- and information-led strategy rather than technology-led,” he says.
Changing to an information-led operation from a technology-led one has required Kirby to carry out some major operations on the leadership team within IS. Some of Kirby’s messages are tough and would have been difficult to live through for all concerned, but when you look at the dire straits companies like Yahoo, Nokia, Kodak and HP find themselves in today, the longer term consequences for people, the economy and society are harder than these difficult decisions Kirby has had to make.
“We had a lot of good technology people. The challenge that IS had was a leadership and business outcomes issue.” Kirby explains that these good technology people did not feel valued, perhaps didn’t communicate well within the organisation and faced constant criticism over technologies like email. This created motivation problems within IS.
“That created a parent/child relationship, as IS was too eager to please, rather than help the business change and bring in new ideas,” he says.
“They were not as skilled at people development as they needed to be. But there was excellence in execution and managing the costs base,” he says.
“The first thing I did was make sure that I had the right leadership team, and that meant changing 80 per cent of the team within six months. Now we have a much stronger blend of experience in technology, business and working styles.
“IS leaders have to be leaders of people first rather than being experts in the subject matter.
“The common thread was a passion for people. They have to be people that could embrace pace and ambiguity and they had to have a strong alignment with the business. For me that was the same in procurement. You have to have a business conversation first and then fall back on the subject knowledge.
“We have spent a lot of time making sure that what we now do matters to the CEO and CFO. They have given positive messages that they see IS as important to the company,” he says of the two-way support required and delivered.
“We have pillars or foundational capabilities that sit across our future state architecture; collaboration, externalisation, consumerisation, on-demand, information visibility and exploitation, information lifecycle management, application lifecycle management and end-to-end process management. We also have business area-specific requirements, such as within R&D where we have many data sources that need to be analysed, integrated and fed back to the scientists,” he says of the information challenge and opportunity.