Pharma R&D stands at a crossroads. Patent cliffs, rising development costs, and science that keeps getting more complex are forcing organizations to rethink not just what they discover, but how they operate. In this context, operational excellence has stepped onto the radar of the business: it is now seen as a key contributor to success, standing next to science rather than behind it.
But this is not manufacturing. In production, operational excellence has long been part of the furniture in pharma companies: embedded, expected, rarely questioned. In pharma R&D, it isn't. Its legitimacy is still being argued, and its application is far more complex and far more contested.
In this context, we wanted to share our experience building OE systems in pharma R&D, and in other R&D environments across other sectors too. These are not absolute truths, even though they are phrased as commandments: their purpose is to put the right questions on the table, not to hand over ready-made answers.
1st Conviction : Thou Shalt Choose Impact Over Maturity
Two models compete, and sometimes clash, across the industry. A maturity-driven model aims to homogenize day-to-day practices against a target of best practices, often across a wide range of activities and processes: business practices, performance steering, and more. An impact-driven model puts OE squarely at the service of a performance gain tied to business objectives; practices follow from that gain rather than being pursued as an end in themselves.
In an environment where neither model has yet proven itself, and where the target of best practices is not yet clearly defined or embedded in the company's DNA, our clear recommendation is to build an impact-driven OE system.
2nd Conviction : Thou Shalt Win the Head of R&D
Building this kind of system means convincing the organization that it is necessary. Strong sponsorship from leadership is always required, and this is even truer in pharma R&D, where the organization still needs convincing.
Being impact-driven means working closely with the Head of R&D: starting from their business needs and translating their strategic priorities into the organization at every level. A number of tools can support this, from OKRs to a KPI tree that makes explicit the link between business priorities and more operational indicators.
This work does more than connect the OE system to business needs. Above all, it is an exercise in proximity with the Head of R&D, one that helps build their narrative around the value of the approach and turns them into a genuine sponsor.
3rd Conviction : Thou Shalt Build the Right OrganizationThe third commandment, no less important, is to build the OE organization itself: the right structure, the right reporting lines, the right capabilities.
One benchmark from industry, and one that holds just as true in an R&D environment, is that a credible OE system needs roughly 1% of R&D's total resources dedicated to the OE organization. The second benchmark is that this organization must deliver a consistent OE approach, built on standard methodologies, while staying close to the science and to the specificities of each function.
One model that has proven itself, though not the only one, pairs a central Global OE team, which owns the strategic and tactical OE processes and acts as guardian of methodologies and tools, with Local OE roles embedded in the functions, delivering impact alongside operational teams and supported by Global OE. This model matters because Global OE acts as the hinge between the Head of R&D, to whom it must report, and improvement within the functions. Over time, the Head of Global OE must become a genuine sparring partner to the Head of R&D.
Success here is not the sole responsibility of the Local OE lead. It rests on joint accountability: operational owners remain accountable for the results of the improvement project, while the Local OE lead is accountable for ensuring the project follows the reference methodology for how this kind of improvement project should be run.
Reaching 1% of R&D's total FTEs can look like a lot, especially in large organizations. In reality, once you count everyone who already works on performance or OE in some capacity across the functions, that headcount is often already there within the 1%; what's missing is focus. Today they are often the function's "jack of all trades." The task is to give them real focus and a mission the organization recognizes.
As for capabilities: how do you staff this organization, and with what profiles? People from manufacturing and supply chain OE, or R&D people trained in OE? There is no single, clear-cut answer, or rather, the answer is a mix of both. What matters is making OE a genuine discipline, recognized as such by the organization, with the ambition of turning it into a competency valued on par with scientific expertise. It is also necessary to bring in a critical mass of OE experts, chosen for their curiosity and their understanding that the R&D world is different, and that a system built specifically for it has to be invented rather than copy-pasted from manufacturing.
4th Conviction : Thou Shalt Build Thy Own Temple
Everyone has heard of the Toyota model and, more precisely, of its Temple: a set of strong principles, described visually, that guide daily work and give a clear target for the best way to run activities and processes. This Temple is not a collection of tools and methods. It is a true guide to the operational practice of everyday work.
Being specific to pharma R&D means building your own Temple (which doesn't necessarily have to look like a temple at all) to serve as the guiding reference for the whole system.
Sometimes an example says more than a long argument. Does "right first time" fit a research environment full of scientific uncertainty? Probably not. What research needs is a clear intent: knowing what you want to learn before launching into scientific exploration. That is often exactly what's missing, and its absence drives real proliferation, which isn't a problem in itself, until, at the end, nothing has been learned. The principle, then, could be "Learn Right First Time" rather than "Execute Right First Time."
5th Conviction : Thou Shalt Take Small Steps, and Big Ones Too
To succeed, OE must do two things at once. It must build a system for continuous improvement through small steps, carried by practitioners at every level of the R&D organization. And it must demonstrate bigger steps through landmark improvement projects that model the new way of working.
Choosing these improvement projects around strong governance, steering them at the right level of sponsorship, and equipping their execution with the right methods and tools to demonstrate success: this is genuinely key. Taking action is paramount, and that action must set the example for the rest of R&D.
The road is full of obstacles. But more and more Heads of R&D in pharma are clear-eyed about one thing: there is science, and there is the collective ability to execute. Operational excellence is becoming a genuine strategic lever for getting there.