Reflections on JPM 2025: The Era of Operational Excellence

Operating Margin is a predictive lens through which analysts assess valuations—the ultimate indicator of buying power (for M&A) and investor returns (via buybacks and dividends).

Last week at JPM 2025 was both educational and productive. While my primary focus was on renewing and building relationships, I also paid close attention to the executive presentations to gain deeper insights into the key drivers of market sentiment and sustained success in life sciences.

One theme stood out: beyond the usual emphasis on pipeline depth, patent strength, and upcoming milestones in R&D, regulatory, and commercialization, Operational Excellence emerged as the X factor many more executives highlighted this year.

Traditionally, Operational excellence has been the unsexy side of the life sciences business, which gets little if any attention despite its impact. However, this year's JPM presentations signaled a shift. Companies are getting serious about raising operating margins and increasing employee productivity.

While a growing pipeline of high-value products with compelling data boosts revenue potential, rising expenses that erode operating margins can dampen valuations. This dual dynamic underscores why operational excellence is increasingly at the forefront.

Efficiency is finally in vogue. And in the age of AI, if not now, then when?

Yet, to truly make Operating Excellence a cornerstone of sustainable progress, it needs executive love — starting with a COO dedicated to consistently improving Operating Margin and Employee Productivity.

In my mind, the ideal life sciences COO deeply understands the intricacies of end-to-end functional operations (how they are connected and influence one another) for discovering, developing, and commercializing innovative medicines, is an innovator at heart, unafraid to experiment with bold ideas no matter where they originate, is a technophile who stays abreast of the practical (and proven) uses of the latest technologies for driving operational excellence, and is a change-maker, who fearlessly embraces change and can inspire, encourage, and energize people.

My takeaway from JPM 2025:

While the pipeline and launches will always command attention, the era of Operational Excellence has arrived. Executives with a relentless focus on margins and productivity—powered by strategic vision, disciplined execution, and innovative thinking—are well-positioned to unlock the next wave of growth in life sciences.