Optimized to Death: How Hyper-Prioritization is Killing Western Biotech and Pharma

I have recently seen great documentaries about how global industrial giants and their leaders lost their competitive edge and went from riches to rags. The most prominent stories that everyone retells are about the demise of GM and Boeing: both companies reshaped their industries and had been benchmarks for others, but completely lost their way. Seeing all the details of the self-destructive path they took made me realize that I see the same patterns in the leaders of my own industry: biotech and pharma giants.

And the pattern is so obvious that it is strange no one is teaching this as a separate course to future leaders and MBAs alike: hyper-optimization leads to only one end — the end of your company. I will go even further. Toyota’s lean manufacturing practices seemingly defeated GM and showed a better way to manage a company. But lean can also become a death trap. It can kill innovation and only delay your downfall. The same principles of prioritization and never-ending optimization are still there. Don’t get me wrong. Lean is a very important part of running a successful business. I have used it myself, and it is great. But when you make it a core part of your identity, it limits creativity. It puts your most innovative asset — your talent — in a box. You have to know how and when to use lean principles. But you also need to know when to stop. Too much of anything kills you, or at least makes you sick. This is true for humans. The same is true for organizations.

Let me explain what I see and what makes me think biotech and pharma are going down the same road as the auto industry. We have copied their lean and agile principles, so it is safe to assume we can expect similar results. Let’s start from the beginning by answering one crucial question: what makes giant companies great and keeps them going stronger? It is the founders. Their vision and willingness to take risks are what make companies succeed. As the sole owner of a company, you can make risky decisions, follow your dreams and passions, and build the company around them. We have so many examples of this. Just think about Ford Motor Company or Apple. Who do you associate them with? Who was driving innovation when they were founded, and what is keeping them afloat today?

Similar parallels can be drawn in pharma and biotech. Just compare where Novartis and Roche are today. Roche’s revenue grew 2.5 times faster over the last 10 years than Novartis’s. One is led by founder family, the other is run by an appointed board of directors and revorder by stock price. The same can be seen in biotech when comparing family-run and corporate companies. For example, New England Biolabs' revenue grew twice as fast as the comparable Thermo Fisher Scientific segments. They have access to similarly talented pools of people. So what separates them? I strongly believe the main difference is that privately owned companies can follow through with long-horizon strategies, while corporations have to chase short-term gains. How do they get there? Yes, through hyper-optimization. And the real impact of optimization you will feel in ten years, not in quarterly reports whose sole purpose is to drive the stock price up.

I had the impression that analysts are quick to accuse current or former CEOs of being "accountants" or "consultants" from the Big Three, and that this is why they become so focused on optimization. Yes, it is true that many pharma and biotech giants are led by CEOs with these kinds of backgrounds. But I think we are looking at it from the wrong angle. Boards select them because they know what they are good at: improving margins, cutting costs, allocating capital and delivering predictable growth. And this is exactly what they are paid to do.

The problem is that optimization is very easy to measure. You can show a 5% cost reduction or a better margin. But it is much more difficult to find a KPI (Key Performance Indicator) to measure innovation, the negative impact of pushing scientists out, or the projects you killed based on a risk matrix. What makes me claim that biotech and pharma are following in the footsteps of the auto industry? Multiple small market signals and corporate reports that you need to deconstruct. Just look at the Fierce Biotech Layoff Tracker for 2026. There was hope that layoffs would slow down compared to 2025, but it seems the opposite is happening. What is worse, companies are outsourcing manufacturing and R&D jobs overseas, even in light of the current geopolitical turmoil and despite having the historical knowledge of what happened in the auto industry. Sprinkle on top a looming patent cliff (that is for another post, and is itself the result of hyper-optimization that started twenty years ago) and we are looking into a pretty dark future.

We are repeating the same death cycle: outsourcing innovation (manufacturing and R&D), fully transferring knowledge, and then, in twenty years, overseas companies overtake us and buy out their founders. Followed by confused Pikachu face: "We have no idea how this happened. Nobody could have seen it coming. Anyway, can we get a bailout?" Very simplistic explanation, but just look at all the other industries that repeated this death cycle. The major question is: can we change the course of this Titanic and steer away from disaster? The short answer is "no". There are no quick fixes and reversing decades of optimization. But I think it is time to look for those who will survive and who have avoided spiraling into hyper-optimization addiction.

So, if I were an investor or choosing my future career, I would be looking for three main company hallmarks:

1. Company is optimizing selectively, not blindly.

2. Company has a long-term strategy and follow through on it.

3. Company invest in innovation that is difficult to measure.

And the red flags for me would be:

1. Scientists and technical people are treated as costs rather than assets.

2. Repeated restructuring, prioritization, outsourcing, and "simplification".

3. Everything is measured by KPIs, but there is no clear big picture.

I am not sure about you, but for me, it feels like watching a car in slow motion as it speeds towards a wall. When I speak to senior, seasoned colleagues in the industry, I see the worry in their eyes growing by the day, even though they try to stay optimistic. I guess if there are only so many lifeboats on the Titanic, the only hope is to secure a place in one of them.