Ten Habits of High-Performing Health and Life Sciences Companies, and What the Board Should Watch

Companies that sustain high performance in health and life sciences share a set of habits. Three years after I first described them, several of my own examples had reversed, which is the best argument for watching the evidence rather than the story.

In Brief

The Problem. Long success carries its own risk. A company that has won for years tends to keep doing what won and to see threats late.

Why It Persists. Boards often judge performance through success stories, and a success story hides the way each good habit can fail: an edge move that regulators block, a breakthrough that a new variant overtakes, a growth unit that ends in a sale.

What Boards Should Do. For each habit that matters to the strategy, ask management for the evidence that the habit is working and for the sign that would show it failing, and review both at set intervals.

In February 2023 I described ten strategies that high-performing companies in health care, technology, and life sciences use to avoid complacency, each illustrated with a company case. The habits have held up. Several of the cases have not. One company I cited had to separate an acquisition that regulators blocked; another saw its leading product lose its authorization within 14 months; a third was sold. I also misidentified one company's chief executive, an error I correct below.

That record leads to my argument. The habits are real, and a board should look for them. But no habit protects a company from its own failure mode, and the success story that illustrates a habit is the least reliable evidence that it is working. Directors should watch the evidence, and the warning signs, for each one.

They Watch the Edges of Their Market

High-performing companies pay attention to the customers they do not serve well and the technologies their competitors dismiss. "Your margin is my opportunity" was described by Fortune in 2012 as a favorite aphorism of Jeff Bezos, though whether he said it in those words is not documented (Quote Investigator, 2019). The idea is sound: growth often starts where an incumbent is weakest.

Edge moves also carry edge risks. In 2023 I cited Illumina's acquisition of GRAIL as an example. Illumina completed the acquisition on August 18, 2021, while the European Commission maintained that a standstill applied pending its review (Illumina, 2021). The Commission prohibited the deal on September 6, 2022 (Illumina, 2022), and Illumina completed the separation of GRAIL on June 24, 2024 (Illumina, 2025). A board should ask which adjacent markets management tracks, what would cause it to act, and what regulatory path stands between the company and the edge.

They Challenge Their Own Assumptions

Narrow vision is the usual cost of success. Disciplined companies build a formal challenge into strategy through war gaming and red teaming: an independent team, or outside advisers, asked to simulate competitors' moves, argue against the plan, and find what it misses. The same discipline now applies to artificial intelligence (AI). A model approved for one purpose drifts into others, and someone should be charged with asking how it could fail. Directors should ask when the strategy was last challenged in this way, by whom, and what changed as a result.

They Reshape the Value Chain Through Partners

Some companies create value by working directly with providers, suppliers, and researchers, removing steps between the data and the decision. Flatiron Health built electronic health record software for oncology and curated real-world evidence for cancer research, working with more than 265 community cancer clinics, six academic research centers, and 14 of the top 15 therapeutic oncology companies. Roche, which already held 12.6 percent, agreed in February 2018 to acquire the rest for USD 1.9 billion (Roche, 2018). The board's question is who controls the data that such partnerships produce, and on what terms.

They Renew Leadership Before They Must

High-performing companies change the makeup of their senior teams earlier and more decisively than their competitors. In 2023 I wrote that Gilead Sciences had appointed Andrew Plump as chief executive in 2022. That was wrong. Gilead announced on December 10, 2018 that Daniel O'Day, then chief executive of Roche Pharmaceuticals, would become its chairman and chief executive on March 1, 2019 (Gilead Sciences, 2018). The corrected example makes the same point: the board brought in an outside leader to renew the company.

The board owns chief executive succession directly. It should also know how the chief executive is developing the next layer of leaders, and whether the senior team has the skills the strategy will need in three years, including AI oversight. Boards should apply the same test to themselves. Only one-third of directors are strongly confident in their board's collective skill set (National Association of Corporate Directors, 2025), and in the PwC 2026 Annual Corporate Directors Survey, 71 percent of directors said their boards need to strengthen their AI skills to provide more effective oversight, more than twice the next-highest response (PwC, 2026).

They Keep a Bench of Talent

When conditions tighten, many companies cut deeply and lose the people they will need when conditions improve. Companies that sustain performance protect a bench of capable people in the functions that drive their strategy, even at some short-term cost. Genentech, which I cited in 2023, appeared on the Fortune 100 Best Companies to Work For list in every year from 2016 to 2022, ranking 56th in 2021 (Great Place to Work, n.d.). The board's question is which roles are critical to the strategy, who holds them, and what the plan is if those people leave.

They Build Capacity for New Businesses

High-performing companies invest in people and structures that can start new businesses. In 2021 Cerner acquired Kantar Health for USD 375 million and, in October of that year, launched Cerner Enviza, a unit that applied health record data and real-world evidence to life sciences research (Miliard, 2021). Eight months later, Oracle completed its acquisition of Cerner (Oracle, 2022). New capacity can raise a company's value without securing its independence. The board should know which new businesses it is building, what each needs to succeed, and how each figures in the company's strategic options.

They Adopt Technology With Governance in Place

High-performing companies adopt new technology early, but not blindly. The Permanente Medical Group in Northern California tested an ambient AI scribe in a ten-week pilot in 2023 and rolled it out in 2024. From October 2023 through December 2024, 7,260 of its physicians used the tool in more than 2.5 million patient encounters, saving nearly 16,000 hours of documentation. Patients are told when the tool is in use, physicians can review and edit the draft note, and the tool makes no care decisions. The group measured note accuracy, physician and patient experience, and time spent in the health record, and adoption continued after it changed vendors between the pilot and the rollout (Greene, 2025). For AI, adoption with governance means an inventory of systems in use, a named accountable executive, conditions attached to each approval, and a reporting cadence to the board. Speed and governance are not opposites. Governance is what allows a company to move quickly without losing the confidence of patients, regulators, and investors.

They Collaborate Across Disciplines

High-performing companies bring scientists, clinicians, and engineers together to solve hard problems quickly. Regeneron's antibody combination of casirivimab and imdevimab received emergency use authorization for COVID-19 on November 21, 2020 (Regeneron Pharmaceuticals, 2020). On January 24, 2022, the United States Food and Drug Administration (FDA) limited its use because the data showed it was highly unlikely to be active against the Omicron variant (U.S. Food and Drug Administration, 2022). Speed was a real achievement, and the science was then overtaken. The board should ask how dependent the company is on any one product and how quickly it could respond if that product lost its place.

They Encourage Experimentation

Innovation requires risk and some failure. In their 2004 letter to prospective shareholders, Google's founders wrote that employees were encouraged to spend 20 percent of their time on what they thought would most benefit the company, and that AdSense for content and Google News were prototyped in that time (Google Inc., 2004). The board should ask what share of resources is set aside for experiments, how they are chosen, and how the company decides to stop one.

They Use Partnerships Deliberately

Partnerships can extend a company's reach faster than building alone. The collaboration between Pfizer and BioNTech is the clearest recent example. The FDA authorized their COVID-19 vaccine for emergency use on December 11, 2020, after a Phase 3 trial that had enrolled about 44,000 participants (Pfizer and BioNTech, 2020). The lesson for a board is not that partnerships are always wise. It is that the terms decide who controls the science, the data, and the economics if the partnership succeeds or fails.

The Strongest Objection: These Are Stories Told in Hindsight

A skeptical director might say that lists of habits suffer from survivorship bias. Any successful company can be described as watching its edges or renewing its leaders, and the cases are chosen because they turned out well. On that view, the habits explain nothing.

The objection is largely right about the stories, and my own 2023 cases prove it. It is wrong about the habits. The answer is to stop judging the habits by their stories and to judge them by evidence the board can check at regular intervals: the date of the last independent challenge to the strategy, the coverage of critical roles, the terms of the main partnerships, the share of resources set aside for experiments, and the state of the AI inventory. Evidence of that kind does not depend on hindsight.

What the Board Should Watch

None of these habits can be imposed by a board. Each one can be observed, along with its failure mode. A board that asks for both at regular intervals will know whether its company is renewing itself or living on past success.

For the Board

• When was our strategy last challenged by an independent team, and what changed as a result?
• Which roles are critical to our strategy, and what is the plan if the people in them leave?
• Does our chief executive succession plan reflect the skills the strategy will need in three years, including AI oversight?
• In our most important partnerships, who controls the data, the intellectual property, and the economics if the partnership ends?
• Which of our products or growth bets could be overtaken or blocked, and what would we do if one were?
• Do we have an inventory of AI systems in use, with a named accountable executive and a reporting cadence to the board?

To discuss how your board oversees performance, talent, and AI, book a conversation.

References

Gilead Sciences. (2018, December 10). Gilead Sciences names Daniel O'Day chairman and chief executive officer [Press release]. https://www.gilead.com/news-and-press/press-room/press-releases/2018/12/gilead-sciences-names-daniel-oday-chairman-and-chief-executive-officer

Google Inc. (2004). Form S-1 registration statement [Including the founders' letter, "An owner's manual for Google's shareholders"]. U.S. Securities and Exchange Commission. https://www.sec.gov/Archives/edgar/data/1288776/000119312504073639/ds1.htm

Great Place to Work. (n.d.). Genentech [Company profile]. Retrieved October 21, 2026, from https://www.greatplacetowork.com/certified-company/1000096

Greene, J. (2025, April 1). AI-assisted notetaking gains steady support from Kaiser Permanente physicians. Kaiser Permanente Division of Research. https://divisionofresearch.kaiserpermanente.org/ai-assisted-notetaking-gains-steady-support-from-kaiser-permanente-physicians/

Illumina, Inc. (2021). Form 8-K [Current report dated August 18, 2021, reporting completion of the GRAIL acquisition]. U.S. Securities and Exchange Commission. https://www.sec.gov/Archives/edgar/data/1110803/000095015721000850/form8-k.htm

Illumina, Inc. (2022). Illumina intends to appeal European Commission's decision in GRAIL deal [Press release, Exhibit 99.1 to Form 8-K, September 6, 2022]. U.S. Securities and Exchange Commission. https://www.sec.gov/Archives/edgar/data/1110803/000095015722000997/ex99-1.htm

Illumina, Inc. (2025). Form 10-K for the fiscal year ended December 29, 2024. U.S. Securities and Exchange Commission. https://www.sec.gov/Archives/edgar/data/1110803/000111080325000019/ilmn-20241229.htm

Miliard, M. (2021, October 27). Cerner launches new unit focused on life sciences, therapeutics. Healthcare IT News. https://www.healthcareitnews.com/news/cerner-launches-new-unit-focused-life-sciences-therapeutics

National Association of Corporate Directors. (2025, December 11). Boards prioritize strategic execution, technology and people heading into 2026 [Press release]. https://www.nacdonline.org/about/newsroom/press-release/press-release/boards-prioritize-strategic-execution-technology-people-2026/

Oracle. (2022, June 7). Oracle completes acquisition of Cerner [Press release]. https://www.oracle.com/news/announcement/oracle-completes-acquisition-of-cerner-2022-06-07/

Pfizer and BioNTech. (2020, December 11). Pfizer and BioNTech celebrate historic first authorization in the U.S. of vaccine to prevent COVID-19 [Press release]. https://investors.biontech.de/node/8926/pdf

PwC. (2026, September 23). Board expertise gaps are rising as oversight demands grow: Insights from PwC's 2026 Annual Corporate Directors Survey [Press release]. https://www.pwc.com/us/en/about-us/newsroom/press-releases/pwc-2026-annual-corporate-directors-survey.html

Quote Investigator. (2019, January 13). Your margin is my opportunity. https://quoteinvestigator.com/2019/01/13/margin/

Regeneron Pharmaceuticals. (2020, November 21). Regeneron's casirivimab and imdevimab antibody cocktail for COVID-19 is first combination therapy to receive FDA emergency use authorization [Press release]. https://investor.regeneron.com/index.php/news-releases/news-release-details/regenerons-regen-cov2-first-antibody-cocktail-covid-19-receive

Roche. (2018, February 15). Roche to acquire Flatiron Health to accelerate industry-wide development and delivery of breakthrough medicines for patients with cancer [Press release]. https://www.roche.com/media/releases/med-cor-2018-02-15

U.S. Food and Drug Administration. (2022, January 24). FDA limits use of certain monoclonal antibodies to treat COVID-19 due to the Omicron variant [News release]. https://content.govdelivery.com/accounts/USFDA/bulletins/3075786