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The CDMO landscape has shifted dramatically in just the past few years, with the competencies required to lead these organizations evolving to align with changing strategic priorities. In the following conversation, Morten Nielsen and Mindy Steiger of WittKieffer, the executive search and leadership advisory firm, share their insights on the strategic agenda of CDMOs, the competencies required for successful CDMO leadership, and talent-related advice for CDMO boards, CEOs, and executive leadership teams. For more on this topic, read: Adapting to Change: The Shifting CDMO Leadership Landscape.
1. What is the strategic agenda of CDMOs today? What do business imperatives look like now, compared to pre-pandemic?
Morten: CDMOs have been an integral part of the pharmaceutical value chain for years now — however, their strategic agenda has indeed shifted in recent years. The COVID-19 pandemic led to rapid growth for the CDMO industry, and in the wake of this increased activity, organizations needed to recalibrate and pivot from traditional offerings to expand their customer base. On the whole, the strategic trend we see is CDMOs evolving from external contractors to partnership-based organizations, offering expanded services and specialized manufacturing abilities.
Mindy: Alongside — and in fact, complementary to — this trend, we also see a market movement towards stratification, manifesting in two distinct ways: larger CDMOs are expanding in size and diversifying their offerings, becoming vertically integrated, while smaller CDMOs are leaning into specializations and building expertise in novel modalities and complex technologies. Furthermore, the industry is undergoing increased segmentation based on service types, technologies, locations, and value propositions. These noticeable business imperative developments are linked to wider trends we’ve seen in recent market dynamics, including more expertise and offerings in tech transfer and commercial launch, a focus on novel modalities like cell and gene therapy, and an expanded customer base.
2. Is current CDMO leadership equipped to steer towards this strategic response? Based on your experience in the market, what are the “pain points” facing CDMO leadership today?
Mindy: CDMOs’ strategic agenda and business imperatives are shifting, demanding an evolving profile for CDMO leadership. Our research into the composition and backgrounds of CDMO executive leadership teams reveals a predominantly traditional, business-focused leadership structure centered around general managers. While this approach has been effective historically, it may indicate potential competency gaps among leadership in this rapidly evolving market.
Morten: In reality, the dynamic nature of today’s CDMO market — which demands flexibility in modalities, technologies, client delivery methods, and ancillary business offerings — suggests that some CDMOs may face competency gaps. These are particularly evident in emerging areas such as business model transformation, digital transformation and AI, sustainability and DEI initiatives, and novel modalities like cell, gene, and mRNA therapies. These gaps are noticeable at both the executive committee and board levels.
3. To build on this, what leadership competencies are required to be successful as a CDMO executive? How do these competencies differ from pharma?
Morten: There are certainly many competencies shared between CDMO and pharma executives: both need to be organized, results-oriented, and capable of meeting deadlines under pressure. The ability to communicate complex value propositions and foster partnerships with a collaborative mindset is critical for leadership success across these industries. However, the B2B model of CDMOs necessitates its own unique skillset with some distinctions from pharma. While both industries have organizational intricacies to navigate, these complexities differ. Executives in CDMOs must exhibit customer centricity, the ability to operate at high velocity, and comfort with high levels of ambiguity.
Mindy: Indeed, the ability to manage these CDMO-specific complexities is paramount to a successful executive profile. Beyond these technical considerations, CDMO leaders must adopt different approaches (compared to pharma) in stakeholder management, go-to-market strategies, sales approaches, and team capabilities. Additionally, CDMOs operate on a shorter planning horizon, requiring a high degree of adaptability and responsiveness, especially in the context of changing client needs and market dynamics. This underscores the importance of agility and flexibility in a fast-paced, innovative environment.
4. What talent-related advice would you give to CDMO CEOs, boards, and executive leadership teams?
Mindy: Throughout our discussion, we’ve emphasized the fast-paced, constantly evolving nature of CDMOs, necessitating that these organizations prioritize building leadership teams — at both executive and board levels — equipped to handle industry changes and complexities. Proactively enhancing core leadership capabilities is critical, with impactful leadership being the key driver for CDMOs to navigate industry complexities and stay ahead of the curve. This requires attracting and cultivating a broad set of competencies within leadership teams, building diverse teams that promote gender parity and incorporate a wide range of backgrounds and perspectives. Specifically, CDMOs should consider augmenting their executive leadership teams with competencies in emerging functions such as AI and digital transformation as well as novel modalities — either through new, full-time roles or interim and on-demand leadership.
Morten: Prioritizing the development of diverse leadership teams —encompassing a range of thought, experience, function, and expertise — is essential for CDMOs. In addition to augmenting leadership teams, CDMO boards of directors should embrace industry shifts by bringing on subject matter experts who can guide the company through business transformation. Board directors with specific skillsets such as systems-thinking capabilities and competencies in emerging functions can provide guidance and help CDMOs adapt to changing partner needs in the pharma and biotech industries. Alongside bringing in new talent, CDMOs should proactively develop their organizational culture, using active change management to accelerate strategy execution. Addressing high executive turnover rates requires fostering an environment that provides a sense of purpose, encouraging employees to stay within the company.
MORTEN NIELSEN, NACD.DC: A Senior Partner in WittKieffer’s Global Life Sciences Practice, Morten advises boards, CEOs, and senior executives on strategic hiring and succession planning, providing tailored solutions for the most pressing leadership imperatives at CDMOs and other life sciences companies. Morten can be reached at: mnielsen@wittkieffer.com.
MINDY STEIGER: A Consultant in WittKieffer’s Global Life Sciences Practice, Mindy has over 15 years of retained executive search experience and specializes in identifying top-tier and impactful leadership for critical roles within CDMOs and other life sciences companies. Mindy can be reached at: msteiger@wittkieffer.com.
