Things have been looking pretty rosy for the life sciences sector of late. Investment in biotech doubled between 2020 and 2021 alone, with investors pouring $34 billion of capital into the rapidly growing sector.
Healthy investment often means healthier hiring budgets. According to data from the US Bureau of Labor Statistics, headcount increased by 5.3% year-on-year between 2021 and 2022. Meanwhile across the pond, a report by the UK government found that employment in the sector grew 13% between 2011 and 2020.
But big growth often comes with new challenges. As life sciences organizations navigate challenges at a talent, process, and sector-wide level, they’re going to need strategy on their side to meet ambitious goals.
SMART goals have proven to be one of the most popular frameworks for setting performance objectives. However, in an innovation-driven, highly collaborative industry like life sciences, OKRs can be a much more effective framework that connect individual and business goals, and prepare organizations for the next phase of growth.
Challenges in the Life Sciences Industry
Times may be good for the life sciences industry, but the sector is still facing some common growing pains due to its rapid growth.
Industry talent shortages mean that companies in this sector must do more with fewer people to maintain business velocity. Meanwhile, the COVID-19 pandemic dramatically accelerated changes across the whole sector, creating an unprecedented impetus for global collaboration, an increased dependence on digital technologies, and a ground-up overhaul of traditional methods of R&D.
To keep up with the pace of change and take advantage of the investment opportunities available, life sciences companies will need to:
1. Improve their knowledge management systems.
Research by Deloitte found that organizational silos in the life sciences sector prevented efficient knowledge sharing 16% more often than in other industries. While this is always a problem, the new emphasis on collaboration and partnership will make this an even more serious issue.
2. Increase organizational agility.
A report by McKinsey concluded that, while the life sciences industry has traditionally relied on technical problem-solving (using expertise and relying on best practice, and tried-and-tested solutions), recent game-changing developments (such as using combinatorial technologies to create novel therapies) have created a complex and ambiguous landscape. Navigating these developments successfully means companies must move to a more adaptive and agile mindset.
3. Increase operational efficiency.
The need for greater agility, coupled with a talent shortage, means that life sciences companies need to find ways to increase productivity without adding to their workforce. For instance, a 2021 McKinsey case study on Johnson & Johnson outlines how the organization pivoted towards a new operating model that prioritizes cross-functional teamwork, measuring progress through metrics, and employee autonomy.
Why Life Sciences Should Consider OKRs
Tackling these challenges won’t be easy, but the right goal-setting framework could help organizations manage their outcome more effectively. While many companies still rely on SMART goals for performance management, the OKR (objective and key results) method may be more effective for life sciences businesses. Unlike SMART goals, OKRs are a more holistic approach because they address both desired outcomes, and the steps you will take to reach those outcomes.
This makes them ideally suited for companies which need a comprehensive goal-setting strategy to adapt rapidly to market changes.
OKRs vs. SMART Goals
SMART (Specific, Measurable, Assignable, Realistic and Time-related) goals are a way for employees to establish consistent, objective and quantifiable targets.
They’re an effective way of clearly articulating an end goal, and are usually focused on a single metric of success. But while the outcome is clear, SMART goals don’t always help teams define how to get there, leaving room for ambiguity on the steps needed to achieve a goal.
With OKRs, on the other hand, you have to specify not only what you want to achieve, but how you’re going to achieve it.