Best columns: Business

The view from on high is not always clear

Stefan Stern

Financial Times

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The view from the top can be breathtaking, said Stefan Stern in the Financial Times. But it just as often can be distorted. According to a recent survey by the management firm Roffey Park Institute, 82 percent of corporate directors believe their organizations are in good or excellent shape. Only 52 percent of middle managers share that opinion. Similarly, more than a third of directors believe company morale is high; only 9 percent of middle managers agree. This disconnect suggests that if CEOs want to know the truth about the organizations they lead, they need to spend more time listening to middle and junior managers. Citigroup ex-CEO Charles Prince might have curbed the bank’s risky lending, for instance, if he’d kept in touch with lower-level execs who saw credit conditions deteriorating before their eyes. It’s fine for leaders to “have their eyes on the hills,” but they also need to keep “their feet on the ground."

How Big Pharma outsmarted itself

Melody Petersen

Los Angeles Times

“The strategy that has made the pharmaceutical industry one of the wealthiest and most powerful on Earth is finally starting to betray it,” said Melody Petersen in the Los Angeles Times. For the past 25 years, Big Pharma has emulated the basic business model of Hollywood—try to create

“blockbusters” by introducing products that could appeal to the masses and then “promote them like mad.” The strategy created hugely popular drugs such as the cholesterol-lowering Lipitor, Prozac for depression, and Nexium for heartburn. The problem is that as the patents on these drugs begin to expire and generic versions become available, the major drug companies “have hit a dry spell.” That’s because, in service to the blockbuster model, enormous sums were spent on promotion, “at the expense of scientific creativity.” To make that strategy work, in fact, “the drug industry put its marketers in charge; scientists were given a back seat.” And surprise, surprise: “They are not discovering enough new drugs to replace the aging standbys.”