7 Human Capital Management practices for a biotech CEO focused on people

Posted on June 8, 2022 by admin

In the life science sector, as within most industries, there is exceptionally high competition for talent. Talk with most biotech CEOs, and although they will likely be preoccupied with the tumult in global capital markets and the changing macro-picture, they will place talent in the top three issues they’re thinking about today. Although the capital environment has tightened over recent months, executives and boards remain optimistic about the abundance of great innovative science. Still, they are concerned they may not attract the people needed to execute their vision. The labour market remains stretched, and hiring high-calibre people is extremely hard. Keeping them is equally challenging once you have people on board, as voluntary turnover is up, and CEOs are reporting six to eight per cent adjusted annual compensation as they respond to the tight talent market against a backdrop of high inflation.

So how do company CEOs make their companies more competitive in the talent market? Many of the traditional actions that companies turn to still apply. Well defined jobs, competitively remunerated, with opportunities for advancement and development might be considered table stakes. But companies who perhaps considered themselves progressive before the pandemic by offering remote working and flexible work patterns have been partially neutralised by these now commonplace practices.

Employees in the life sciences sector are almost universally motivated by making a positive difference and helping patients. Companies who promote their commitment to being ‘patient-centric’, a biotech industry term that is virtually ubiquitous, need to walk the talk, but must also recognise this focus might not have the pulling power they envisage.

Biotech and pharma CEOs have rarely dedicated enough of their time to understanding the human capital management practices central to building a highly-skilled, knowledgeable and motivated workforce that is developing, stable and healthy. It has traditionally been about the science, the funding and commercial viability of innovation. But the contours are changing, and this demands new capabilities from CEOs, boards and executive leaders.

Below, there are seven areas relating to human capital that CEOs should understand about their companies. If they don’t, then new recruits, employees, and their boards will ask – why not?

Embedding Innovation

The life sciences sector is renowned for its innovation. The industry derives its success and long-term sustainability from the innovative technologies and products it produces. However, any industry insider can point to companies that shot to notoriety through innovative breakthroughs but faded through a lack of sustained innovation. The process of innovating is almost always team and network-oriented. The narrative that surrounds life sciences companies is that innovation is an activity that originates in the research environment of the lab. Of course, innovation occurs equally in the development, manufacturing and commercial disciplines.

Current and future employees want to know the process and systems that a CEO is implementing to manage the innovative ideas of a company’s people and how it is leveraging open innovation to source and embed innovation in its strategy. CEOs should be able to effectively describe how they have implemented processes for employees, either individually or collectively, to develop and submit their innovative ideas or approaches. How are the most impactful ideas selected? What support do these ideas get in terms of time, resources and capital?

Innovation is a cornerstone for the industry, and the companies with the deepest commitment and most innovative technologies will raise their talent competitiveness. CEOs should be ready to talk about the amount of time employees are encouraged to spend on innovation, the number of full-time employees focused on research and development, and the company’s success in innovative throughput.

Compensation and Rewards

The level and competitiveness of your financial rewards are an essential part of your employment. But compensation is increasingly sophisticated. Most employees in life sciences will likely be compensated in the form of a salary, bonus or variable pay (either performance-related or discretionary), contributions to their retirement plan, stock and equity participation and awards, health insurance, plus other benefits. They may also be rewarded with additional inducements, such as long-term incentive plans, sign-on bonuses, company cars etc.

This list describes the many financial levers that CEOs can pull to reward employees. In many respects, it is a personal judgment whether you are fairly rewarded for the work. Individuals often make their assessments based on the best data available to them. When they see a deficiency, it becomes part of their broader calculus about their employment.

However, more critically, CEOs need to demonstrate an intricate grasp of the different compensation strategies they’re implementing and how they are material drivers of the company’s desire to create long-term value. Compensation strategies linked to integrated metrics used to reward effective human capital management practices by a company’s management and reduce the risks of poor human capital management are often a positive signal of a company’s commitment to its people.

The financial incentives to encourage active management of human capital by executives and leaders are only a part of the consideration. The pay and rewards offered to non-management employees also indicate the company’s view of the connection between non-management employees’ compensation and value creation. Has the CEO/company a clear understanding of how adjusting the reward mix for both management and non-management employees may impact the Company’s long-term performance?

Human Capital Metrics

CEOs use data dashboards and KPIs to oversee almost all aspects of their business. With human capital, though, many CEOs lack important metrics that inform them about the people in their organisation or the people coming and going.

Tracking and monitoring critical human capital data is fundamental to having an effective human capital management strategy. There are very many different metrics that can be deeply informative, but here are a few select areas:

Workforce Stability

Prospective employees are interested in joining healthy businesses with an engaged and motivated workforce. This can be a complex assessment for people inside the company, let alone outside. Prospective employees will typically respond well to a company that speaks to its rate of voluntary turnover, both in terms of the total workforce and by level and function – assuming the company is not losing talent at a significant rate. This transparency could extend to discussing the turnover rate of the high performers, retention rates of new starters, or skill areas that are strategic to the company’s mission. It must be clear to the CEO that the company effectively retains the right people with the skills, experience and performance to drive value.

Recruitment Trends

Knowing a company’s effectiveness in the recruitment market is vital information. From recent and ongoing recruitment activities, what is the company seeing in terms of recruitment trends? Identifying the areas of the recruitment effort where the company is performing well and where it is not, can help shape the recruitment strategy.

CEOs often want their HR and Talent functions to generate higher numbers of candidates at the top of the funnel, hoping that they filter through to the hiring stage. However, what is vitally important is that the CEO and leadership understand the company’s recruitment yields via all recruitment channels. The yield reveals the company’s ability to move candidates from one stage of the process to another. This analysis reveals insights about when, how and why you’re winning or losing talent as you try to recruit.

Workforce Composition

Understanding the composition of the workforce can tell a lot about the company. The way a CEO decides to employ permanent full-time and part-time staff versus contractors and consultants is valuable insight. But it is not only the mode of employment that is relevant but also the employee profiles and the roles they occupy. Where is the open headcount, and how does the CEO think about filling these positions relative to the business and human capital strategy? How is the CEO tackling diversity, equity and inclusion as part of the workforce composition mix (see separate section)?

Workforce Advancement

Intrinsically aligned to the stability of the workforce, discussed earlier, is how people are advancing inside the company. A CEO who is deeply invested in the success of the company’s employees cares about giving opportunities for advancement based on meritocratic recognition and rewards. How does the company’s performance review process work? What steps has the company taken to ensure this review process is free from bias and that it rewards people equally?

The company’s CEO should oversee effective human resources processes, systems and policies, and how employees are advancing through the organisation is a good indicator of their capability. Have clear career paths been mapped out, with discernible criteria for advancement? What are the current promotion rates (by level, function, location, and underrepresented employees)?

A CEO should have a rich set of data points that indicate the state of the company’s human capital.

Diversity, Equity, Inclusion and Belonging (DEIB)

An organisation’s commitment to DEIB is undoubtedly challenging to assess, at least for non-employees. Most companies, including many large companies, currently offer little or no transparency about the composition of their workforce or disclose how they’re performing as a business based upon a more comprehensive set of DEIB metrics. What is sometimes evident is a company’s marketed intention via DE&I statements made on the company’s website or delivered publicly by the CEO in the media and other fora.

Most employees are more compelled to join companies where the evidence of action closely follows the words. This motive certainly applies in the DE&I realm. Citing statistics of the overall workforce composition as a declaration of a firm’s diversity can be a positive signal, but it often does not convey the full story, as it fails to highlight the areas or levels in which diversity shows up. CEOs must be able to speak with greater granularity about the diversity and representation by function, level, and location and the workforce’s retention, advancement, and mobility. Numbers can be telling, and the more comprehensive the picture, the more persuasive it will be.

However, metrics alone are often insufficient for a multi-dimensional issue like DE&I. Most important is creating a workplace that encourages full and active participation by every employee and where they can apply their smarts without the constant pressure to conform to the organisation’s social mean. Employees need to know their ideas, views, and experience is welcome, received and valued. Crucially, they must feel they belong.

The tone from the top is vital. The diversity of the leadership team and the direction set by the board and CEO indicate the cultural status of the company. The CEO should demonstrate an inclusive leadership style. There are varying models for inclusive leadership, but a CEO should be able to show high cultural intelligence, a focus on implementing de-biased processes and systems, and positively influence the work environment, culture and employees. In biotech, inclusive leaders need to act as innovation enablers by assigning ownership and accountability; and systematically accelerating learning and networking to enable advancement and mobility.

What is the CEO doing to create an inclusive culture? What are the values they are looking to ingrain? What is the evidence of employees experiencing an inclusive and belonging culture? While the metrics may speak to the status and progress, the employee’s lived experience will drive engagement levels and contribute to a sustained diverse employee base giving their best to the mission.

Historically, D&I was an issue CEOs wanted to delegate to their human resources functions. It is now a high-priority topic that CEOs should take personal ownership and accountability for and promote to their board agenda. DE&I is complex, but CEOs need to show leadership and unwavering commitment. Failure to do so will demote their companies from the league of desirable employers.

Skills, Training, Development and Learning

People are driven to improve their capabilities, and this personal development is equally valuable for companies. Many companies speak of their commitment to employee training to hook in new employees. A CEO needs to be across the metrics showing an improving workforce due to learning and development. It is too superficial for CEOs to speak in generalities about training or simply frame staff training in the context of inputs. CEOs grappling with the human capital dimensions of their business should understand where and how training and development are being deployed and how this translates into improved capabilities among the workforce. How is training leading to improvements in the knowledge and skills of employees and their ability to serve the company’s objectives?

Life sciences companies are at the forefront of innovation. Such companies are building value from employees’ deep knowledge and advanced skill. The innovation that can materialise from the continuous application of the employee’s skills underpins the company’s value, requiring employees to be trained and developed.

The level of investment in individuals is a measure of how serious the company takes the issue of training and development. What are the total training hours received for full-time, part-time and contract staff? Similarly, what is the total spend per employee? What percentage of employees complete their training? How many receive promotions within 12 or 24 months of completing significant training?

Capturing this information helps a company’s CEO sell a clear view to prospective and current employees that the company is serious about personal development. It also sends a message to the board and investors, that a CEO is committed to retaining and growing the valuable capabilities contributing to the company’s value.

Employee Wellbeing

One of the issues scaling the priority list for individuals and leaders alike is the matter of wellbeing. The pandemic has magnified the importance of employee health and wellbeing. CEOs must acknowledge this and have it on their radar. It is now evident that a healthy workforce is a more engaged workforce, resulting in many benefits for the employer and employee. But there remains great variability in how companies implement wellbeing strategies and what they do to monitor the processes that track health and wellbeing.

Many companies differ in their definitions of health and wellbeing. At a basic level, best practices on wellbeing should encompass health and safety, including psychological safety. An area of progress in wellbeing programs has been the expansion beyond the realm of physical health into mental health. Equally, a workforce’s social connectivity leads to relationships that contribute to meaning, satisfaction and engagement. A CEO tuned into these nuances will already measure the impact these strategies have on absenteeism, employee pulse surveys, voluntary turnover, productivity, and workplace disputes or legal action. What mechanisms does the company have that track the main outcomes directly associated with the wellbeing program? Does the company measure the return on its investment in wellbeing?

CEOs must recognise the importance of balancing the ingredients of effective wellbeing strategies and practices. The development of effective engagement and communication that educate employees about risks to their wellbeing and contribute to wellbeing protections and open feedback channels that promote dialogue around wellbeing is vital. Equally valuable are policies providing access, structure and procedures which encourage employee engagement in the firm’s wellbeing programs. CEOs and leaders must embed effective monitoring and surveillance to see whether programs and practices are working well or not. The CEO should focus on providing equitable wellbeing for all employees, and that these programs are actively participated in across the company.

Rewarding CEOs for Human Capital Management

Explore most biotech CEOs bonus structures, and you will find them quite rightly linked to value-creating events, such as funding, partnerships and alliances, research and development milestones, or commercial goals. These are all important drivers of a company’s overall success, but they are rarely the sole responsibility of the CEO. For any of these value drivers to materialise, the people core to the company’s mission, need to be highly productive.

It could be argued that unless the CEO is looking after the workforce, none of these value drivers is remotely possible, and so implicit in the objective setting is a need to build an engaged, skilled, knowledgeable, and healthy workforce. However, it does not always follow these aims are satisfied by set objectives.

At Novartis, as an example, the CEO has 20% of his annual bonus linked to People and Culture. In his case, showing progress on equal pay, increased representation, pay transparency, employee engagement, and organisational culture were all factors in meeting the objectives. This introduces integrated accountability for human capital management. It shows the CEO has ownership of these success metrics, and the board and investors are holding them accountable.

Without personal accountability, either hardwired in the form of performance goals or a strong board that has shown commitment to human capital management oversight, the CEO is less likely to prioritise human capital.

In 2022, BMS CEO, Giovanni Caforio, saw his cash incentive drop owing to the company’s performance lagging in the area of human capital. This led to a 73% payout against this specific goal, having failed to meet the quatitative human captial goal that focuses on employee engagement and retention by incorporating employee surveys and voluntary attrition rate.

For CEOs focused on the matters they consider central to the survival and prosperity of their company, it is easy to dismiss the significance of many of the ideas set out in this article. Many CEOs would argue that they do the very best they can in leading the team and creating a workplace that they believe will attract and motivate staff. But people issues have shown to be incredibly impactful on biotech businesses over recent years, and while cyclical changes may bring slight relief in the availability of human resources, the long-term trends are clear for all. Our growing understanding of what drives company performance and how critical human capital is in that endeavour means CEOs must take a more sophisticated approach.

People matter a great deal. If human capital sat on the balance sheet, possibly it would get a different treatment from leaders responsible for this vital resource. CEOs who possess the belief that people are a company’s most important asset and exhibit this commitment in the actions they take will increasingly reap the advantages.

Liftstream is an executive and board level search firm exclusively serving the global life sciences sector.

Posted in Insights, Job Hunting Advice, Pharmaceutical business, Uncategorized | Tagged #Compensation, biotech, CEOs, diversity and inclusion, Hiring, Human Capital, Human Resources, insights, management, people, wellbeing, workforce | Leave a comment

Biopharma Boards Require Lead Independent Directors

Posted on November 30, 2020 by admin

An analysis of biopharma companies conducted by Liftstream (here) in 2020, found that 65% of the US companies researched have elected a corporate governance structure of combining the Chair of the Board and CEO role. Compared on a multi-sector basis, only 46% of S&P 500 companies had a combined chair/CEO structure during 2019. Despite a long-term trend towards companies splitting these leadership roles, it seems there is resistance to this separation with the biopharma industry.

Most board directors understand the value of independence acutely well, as do other relevant stakeholders. But independence is also a requirement of the listing rules of Nasdaq and NYSE, exchanges commonly chosen by the biopharma companies. Independent directors must comprise the majority of elected board directors, and the independent directors should fulfil the duties of the Audit and Compensation Committees; and Nomination and Governance Committee, where they oversee new director nominations. When considering the respective committee charters and the derived responsibilities which the directors must discharge, it is evident independence delivers better outcomes and contributes to greater confidence in the decisions of the board.

In many regions of the world, the division of the Chair and CEO role is a mandatory tenet of good governance. In the US, the combined structure remains prevalent. Where the board chair is not independent, because they also hold the CEO position or were previously the CEO, a lead independent director fulfils an essential board leadership role. This critical role acts as an independence counterweight to the chair/CEO, while contributing significantly to the functioning of the board. Given the importance of a lead independent director, many chairs, CEOs, and directors must understand the role better than is presently the case.

Lots of institutional shareholders, including proxy firms such as ISS and Glass Lewis, are commonly pushing for the separation of the CEO and chair roles. The Investors for Opioid and Pharmaceutical Accountability, a diverse global coalition of investors with $4.4 trillion assets under management, have made appointing independent board chairs a key area for engagement, with some success.

Despite these campaigns to appoint independent board chairs, many companies persist with giving the CEO the chair title. In some cases, companies are even departing from a divided role to combine the two positions. Brent Saunders at Allergan and Jean-Jacques Bienaime at BioMarin are just two examples of biopharma companies where this happened. With increasing liabilities associated with risk, stakeholders assert that companies with independent leadership at the board receive better oversight.

In the absence of an independent chair, a lead independent director plays an essential role in bringing independent leadership to the board of directors. While similarities with a chair role exist, they are not the same. Some of the difference lies in the descriptions – ‘chair of the board’ and ‘lead independent director’. The chair has overall responsibility for the whole board, whereas the lead independent director has a leadership role among the independent and non-executive directors.

The lead independent director should not be thought of as a policing role, bringing surveillance to the actions of the chair/CEO. Instead, it is a leadership role, contributing to the effectiveness of governance and ensuring that communication between directors, the Chair, and stakeholders is functioning well. For example, the lead independent director can interact with shareholders who may wish to engage with the company on relevant matters, such as succession planning, executive compensation, and corporate strategy. Substituting the chair or executive management in these discussions can be incredibly beneficial for better investor engagement. Setting board meeting agendas, scheduling, and determining the information, such as pre-reads, that the board sees are also central features of the lead independent director’s role.

Although the lead independent director should not assume a policing role, they should observe whether the chair of the board is fulfilling the role objectively and to an acceptable level of performance. The lead independent director leads the evaluation of the chair’s performance, a process which should include external input from an advisor or consultant.

Part of this evaluation will demand that the lead independent director communicates fully and openly with the other independent non-executive directors, as well as canvass opinion from the executive board members too. Interactions with fellow directors, many times outside the ordinary course of board business, is an integral part of the lead independent director’s role. The position is therefore well suited to a highly collegiate and communicative member of the board.

The lead independent director, as with any board director, must be independently-minded and capable of both supporting and challenging the chair/CEO. The relationship with the chair is a critical one, and both parties have to work towards maintaining a trusted and valued connection. Should the lead independent director grow increasingly concerned about the performance of the chair/CEO, they will need to establish a consensus among the non-executive directors for the appropriate remedy, which potentially means triggering a succession process.

Given the lead independent director is in a pseudo-chair role, they can be an obvious candidate to fulfil the chair post. In such cases, the process of identifying and electing a new chair needs to be independent, and the lead independent director should recuse themselves if they are involved. The board committee running the process of appointing a new chair needs to distance the lead independent director from the process.

They must also consider whether the lead independent director is the best choice for the chair role, and their standing among the directors will be a determinant of this. In a situation where the lead independent director has driven a process to remove the chair responsibilities from the CEO, the relationship between the two may become fractured. Appointing the lead independent director to the chair role could then inhibit the vital function of the chair – CEO relationship.

This hint towards the duties of the lead independent director gets to a crucial point, which is that the lead independent director role needs a clear role description with associated responsibilities (see below for a sample). The position should be occupied by one of the independent directors, with an existing appreciation for dynamics of the board and the company’s business. Someone respected by the other non-executives. It is common to set a one-year term for the lead independent director, a term that can renew annually. There is not usually an applied upper term limit, but there is guidance on what is considered to be a threshold of service for independence. Appointing the lead independent director from the existing directors, and giving the person a sustained run at the role, is likely to improve the functioning of the board, which will deliver multiple benefits.

Every company has its reasons for wanting to select the leadership and governance structure that it has. As with anything governance focused, there is a need to exercise judgement over the right approach for the entity. Academic institutions, corporate governance think-tanks, standards organisations and many other bodies publish their best practices for corporate governance structures. Still, the real-world context is a vital consideration in designing any board structure. A board must effectively discharge its duties, and it is necessary to optimise the structure for this purpose.

In so many cases, the argument for an independent chair is overwhelmingly convincing. Within the biopharma sector, it seems that two-thirds of the largest companies continue to believe one person serving in both the chair and CEO role is optimal. In such circumstances, the lead independent director offers the counter-balance of power and is vital to an effective board in which stakeholders can have greater trust. Directors serving on a board should consider there suitability to this position and be willing to raise their hand.

Lead Independent Director – Sample Job Description

Executive Sessions

Preside at meetings of the board of directors at which the Chairman is not present, including executive sessions of the independent directors.

Call Meetings of Independent Directors

Has the authority to call meetings of the independent directors.

Conducts Evaluation of Chair and CEO

Conducts independent director evaluation of the Chair and CEO, including an annual valuation of his or her interactions with the board.
Leads the CEO succession process.

Board Performance and Charter Review

Responsible for leading the board’s annual self-assessment
On an annual basis, the lead independent director, in consultation with the independent directors, shall review the board Charter and recommend to the board any modifications or changes.

Chairman Liaison

Serve as principal liaison between the Chair and the independent directors

Approve appropriate provision of information to the board such as board meeting agendas and schedules

Approves information sent to the board, including quality, quantity and timeliness of such information.
Approve the frequency of the board of director meetings and meeting schedules, assuring there is sufficient time for discussion of all agenda items.

Shareholder Communication

If requested by shareholders, ensures they are available for consultation and direct communication when appropriate.

Committee Membership and Chair

Work in collaboration with the Nominating and Corporate Governance committee and the Chair to recommend selection for the membership and chair position for each board committee.

Recommend Director Candidates

Interview, along with the chair of the Nominating and Corporate Governance Committee, all director candidates and make recommendations to the N&G committee.

Authorizes Retention of Outside Advisors and Consultants

Authorizes the retention of outside advisors and consultants who report directly to the board of directors on board-wide issues.

Liftstream is an executive search and leadership advisory company serving companies across the global life sciences industry.

Posted in Corporate Governance, Insights | Tagged Board Appointments, board director, Board effectiveness, Board Governance, Board of Directors, CEO, Chair of the board, independent directors, insights, Lead Independent Director, LID, non executive directors | Leave a comment

Writing a Board CV

Posted on November 19, 2020 by admin

The decision to join a board as a non-executive director marks the beginning of a new career. By the time you reach a point in your professional journey that corporate board service becomes a legitimate career direction, you will have probably interacted with a board of directors and seen how it operates. Likely, that will have been as an executive leader, or maybe an advisor. But being a board director places new demands on you and must be viewed in a different context to an executive role.

It is this crucial difference in both your contribution and mindset, that makes the ‘board CV’ an important document for beginning the search process. Aside from the obvious function of the CV, which is to present your skills and experience relative to board openings, the writing of a board CV will trigger the introspection that helps you analyse the value you bring to a board situation.

So, before you dust off your chronologically written CV, and produce yet another iteration, be aware, this is not the style that will serve you well. Instead of the ‘what you’ve done and when’ orientation of an executive CV, you want to present ‘who you are and the value you offer’ in a board setting.

As you start to formulate your personal proposition, think carefully about the companies that you’d most like to serve, and where your contribution will be of the highest value. What are the common issues these companies are confronting? How does your range of experience and skills contribute to addressing these problems? For example, if we take the biotech sector. Biotech companies grow in quite a predictable way, with some variability, and it is therefore not complicated to extrapolate the explicit requirements that a board might face. If they are subject to setbacks, these too are commonly identifiable.

Equally, consider the purpose and function of the board. Think about the board’s mandate, the stakeholders, and how, through strategy, oversight and enterprise risk management, directors seek to optimise a company’s performance. While financial management and shareholder returns are a critical component of the board’s role, it is not always where a company is in most need of perspectives and insights. Therefore, write your CV with the broader stakeholders in mind and not too oriented toward shareholder primacy. Any board CV should convey a candidate’s achievements and experience to contribute to the broader strategic and governance issues constructively.

A carefully crafted description of your executive accomplishments helps position you as someone with the seniority and range of experience that a board requires. Still, the absence of existing board experience can be an impediment. Therefore, the inclusion of proxy board service with non-profits, trade associations etc. does offer evidence of your ability to contribute to the process of governance and to function collaboratively in this type of setting.

Too often, candidates transitioning from an executive role to that of a board director, are keen to impress just how competent they are at driving results in an operating context. Such a narrative reveals a fundamental misunderstanding of the role of the board, and it suggests that the candidate has not made the appropriate shift in outlook to be truly valuable as a director. It is crucial to write a board CV in language and context that demonstrates comprehension of this difference.

Most careers have quite a narrow functional pathway. This spine of expertise is what commonly makes people inherently valuable to boards. In writing the board CV, this deep functional expertise must come through, supported by quantifiable achievements. But the CV must also make these functional capabilities relatable to board service and must be supplemented with your broader skills and experience. Boards cover many issues, and a director should offer a breadth of skills and experience, alongside deep expertise.

A lot of the value of board directors is in their ability to make introductions and open doors. The appointment of independent directors is an opportunity to plug into new networks of partners, investors, academics etc. In your board CV, putting across the strength of your network, and how you have leveraged this to create value for other organisations, is an effective way to make yourself more attractive as a candidate.

Formatting the CV

All this advice, while hopefully constructive, does not offer guidance on the format. Seemingly, this is where many people struggle. So, here are some broad concepts to follow:

Firstly, the CV needs to capture interest from the beginning. The lead section of the CV needs to answer the critical question of ‘What value will this candidate bring to the board?”
A concise opening summary is often an excellent way to make this initial pitch. This introduction should be positive and assert the qualities that you think best define you, and which are highly relatable to board service. The length of this can be judged case-by-case, but a couple of paragraphs is usually adequate.

Overall, the board CV should not be any longer than two pages, and shorter versions are also acceptable. This brevity can be challenging, particularly when you are condensing several decades of experience. However, a good board director should be able to demonstrate the skill of distilling information into a concise format while presenting a rounded, accurate and compelling picture.

Remember that you are not looking to present a chronological log of all that you have done over the years. Instead, show why you are valuable to a board and relate that to the type of board you wish to serve. Be selective about what you include from your early career. Some of it may well be highly relevant, but you need to balance the CV with board compatible skills.
The tone is essential, as mentioned earlier. It should pitch you at the right level and be written with the use of positive words that press home the crucial points, but don’t saturate it with buzzwords, acronyms or business language. The CV must sell you, but not present the perception of somebody who is egotistical, as this is an unwelcome quality in most boardrooms. The fiduciary duties of a director require you to be willing to act in the company’s best interests, not your own.

Do not heavily employ lists or extensive bulleting, reserve their use only for appropriate and pertinent information. Also, make no assumptions, as readers unfamiliar with your industry, or even your functional experience, may not connect the dots in the desired way, and certainly will not take the time to research it.

We would recommend excluding headshots too. As a practice, we no longer accept CVs with photos, as we wish to de-bias the process of evaluation, and pictures can influence this assessment.

Overall, your CV format needs to be presented in a structured, logical way. It must be easy to read and make the relatability of your professional accomplishments to the requirements of board service clear and obvious. Achieve a balance between what you consider your primary capabilities and your broader skills. Use relevant data and metrics that support your case. Above all, though, make it relevant, clear and focused.

Board service is not something you only do at the end of your career, it is a new career. It requires you to understand your value and how you wish to learn and grow as you join different boards. The board CV is an integral part of your messaging, so put the time in to make sure you are positioning yourself as best you can.

Liftstream is an executive search and leadership advisory company serving companies across the global life sciences industry.

Posted in Board Director Appointments, Insights | Tagged biotech, Board Appointments, board CV, board resume, career advice, CV writing, director appointments, insights | Leave a comment

Biotech Companies Acting on Promises to Increase Racial Diversity

Posted on November 12, 2020 by admin

The issue of racial diversity, equity and inclusion has been prominent in 2020, and many biotech and pharma CEOs have pledged to address the inequality in their organisations. In this article, published for the Timmerman Report, Liftstream CEO, Karl Simpson, explores the actions that companies, large and small, are taking to improve racial and ethnicity representation among their workforces, in clinical trials, and among their supply chains.

Read the article:

Biotech Companies Acting on Promises to Increase Racial Diversity

Liftstream is an executive search and leadership advisory company serving companies across the global life sciences industry.

Posted in Workplace Diversity | Tagged biogen, biotechnology, blacklivesmatter, Bristol-Myers Squibb, Genocea BioSciences, pharmaceuticals, Race and Ethnicity, Sutro Biopharma, xilio therapeutics | Leave a comment

Corporate Leaders Face Pressure from Investors, Regulators to Act on Diversity

Posted on October 30, 2020 by admin

As equality has come into sharp focus during the summer of 2020, the biopharma industry made many pronouncements about its intent to address systemic racism, racial and social justice, and inequity in the industry. What has been happening since? – This article looks at some of the developing actions.

Corporate Leaders Face Pressure from Investors, Regulators to Act on Diversity

The original article was published for the Timmerman Report on October 15th 2020 and authored by Liftstream CEO, Karl Simpson.

Liftstream is an executive search and leadership advisory company serving companies across the global life sciences industry.

Posted in Diversity and Inclusion Consulting | Tagged biotech, blacklivesmatter, corporate governance, Diversity, ethnicity, inclusion, investors, racial | Comments Off

From Heart to Head, Corporations Can Step Up Against Systemic Racism

Posted on August 20, 2020 by admin

Corporate leaders have been coming forward in support of the racial justice movement. They have also pledged a deeper commitment to equity, diversity and inclusion in their companies.

In the following article, which Liftstream CEO, Karl Simpson, authored for the Timmermann Report, he examines what corporations can begin to do to quell systemic racism.

Read the article:

From Heart to Head, Corporations Can Step Up Against Systemic Racism

Liftstream is an executive search and leadership advisory company serving companies across the global life sciences industry.

Posted in Workplace Diversity | Tagged biotech, Diversity, inclusion, Race and Ethnicity, racial justice | Leave a comment

9 Capabilities a Biotech CEO Must Possess

Posted on May 18, 2020 by admin

This article was authored by Karl Simpson, CEO and Founder, Liftstream, a company providing executive search services to the life sciences sector.

‘Predicting the future is a fool’s errand’ – wise words adhered by many, but most find prophecy a temptation too strong to resist. As we reach the peak of the Covid-19 crisis, inboxes are congested with invitations to webinars and virtual meetings, during which our future is forecast. Similarly, the news channels are awash with business leaders who are keen to set out their vision for the ‘new normal’ – a slightly mystifying phrase given the continuous transformations we all witness. The hordes of people predicting the demise of the office; accelerated technology transformation, reimagined workforce engagement and development practices; onshoring and so on; paint a world which sounds futuristic and starkly different. The truth is many of the trends highlighted by the crisis are already evident in many places of work.

While my cynicism may jump out at you in the opening paragraph, I happen to think that there are some aspects of the workplace and leadership which will be changed by the ongoing crisis. Which provokes a question – What does the CEO of the future look like?

This question is not a trivial one to answer. As you look across different industries, geographic regions, customer sub-groups, and more, you can imagine the degree of transformation will be varied. For this article, I have chosen to look at the CEO of the biotech company and what we might see as dominant requirements for the top job in the coming five years.

So what might we expect?

There are several themes, and I’ve highlighted nine which standout. I’ll address these individually, as well as pinpoint some of the interdependent functions that could be important, and individual competencies which would be required from appointees. In doing so, it hopefully provides some guidance to current and future CEOs for the role they covet.

Managing Decentralised Resources

Any CEO presiding over a biotech company in recent years will acutely understand the importance of establishing a mosaic of service partners who offer the range of intellectual capital necessary to undertake meaningful work that is central to achieve successful outcomes for the biotech company. These partnerships, frequently based on traditional vendor-client engagements, but sometimes under more creative arrangements, are integral to accessing the intellectual and human capital the company needs. These partners need to be motivated, beyond financial incentive, to act and respond as an extension of the company. The use of traditional outsourcing provisions remain, but the CEOs of the future must be successful in understanding how to identify and engage the right collaborators, but also how to successfully leverage their intellectual resources in service of the mission.

Functions:

Alliance Management
Project Management
Clinical Operations

Competencies:

Relationship Building
Strategic Planning
Risk Management

Collaborative and Cross-Border Relationships

Open innovation was popularised by Prof. Henry Chesbrough and has been a central thesis in the growth and evolution of the biotechnology industry over the past couple of decades. Large pharma, struggling to find sustainable levels of innovation, now seeks to find the innovation outside the company, stimulating a demand which has fueled substantial investment. For anyone inside the industry, this landscape will be very familiar to them. This open innovation era has allowed biotech and life science ecosystems to thrive in locations around the world.

A biotech CEO needs to be able to forge strategic partnerships with companies that offer the jigsaw pieces that complete the puzzle. If you accept the premise that the best innovation happens outside your company, developing externalised innovation strategies is critical. It can also be hugely inefficient to internalise non-core expertise and business capability.

A CEO must find ways to select the right partners at the right time, under the terms which are advantageous to the company, while incentivising each party. These collaborative partnerships can involve multiple parties and many stakeholders. CEOs must be able to lead a team capable of establishing and cultivating productive relationships over the long-term, involving cross-function interactions, and often across borders and cultures.

Functions:

Business Development and Alliance Management
R&D
Legal

Competencies:

Negotiating
Communication
Global Understanding and Perspective

Drug Discovery and Development while Commercially Focused

During the past decade, we have seen a far higher concentration on behalf of experienced biotech investors for managing the commercial aspects of a biotech company’s reason for being. The dominant mentality of yesteryear, which many times prioritised the full prosecution of science, has been overthrown by a need for determining, as early as reasonably possible, the purpose and application of the scientific innovation. In biotech, this is commonly a therapeutic product or a platform technology. Identifying the likely indication, the patient populations, the optimal clinical development plan, and the commercial viability of the product if successful, is an information-rich calculus that has to be taken earlier than in the past.

The challenge that many biotech CEOs face is they have often emanated from the science world, suggesting a predisposition to favour scientific exploration over commercial management. Today, they operate in a healthy funding environment where the size of Series A and B rounds have outsized historical averages, heightening a possibility for lax capital efficiency. Balancing the tensions between the pursuit of science and what is commercially viable will demand CEOs who can make the right decisions, often with imperfect or incomplete data and information.

This confluence of earlier and quicker assessment of risk, to eliminate the resource and capital inefficiency, alongside astute budgetary allocation for R&D oriented programs, emphasises the delicate balance that biotech CEOs must strike. This innovation-led commercial management can be complicated, especially as the commercial landscape is adjusting to pricing pressures, competition and myriad other influences.

Functions:

Commercial
Finance
R&D

Competencies:

Decision Making
Innovation Management
Stakeholder Management

Global Payer Environments

There are few things which have dominated the discourse among biotech executives more than pricing. The biotech industry has been responsible for exceptional innovations in medicine and healthcare provision. These innovations can come at a cost; sometimes a steep one. How the industry continues to demonstrate the value of its innovative products is a matter of great contention, not only among industry executives but among the wider society. Politicians, of nearly all stripes and colours, see an opportunity to push back on the price of drugs and villainise the drug industry for its practices.

There are also the considerable differences that exist across continents; from country to country; and even within individual countries. Luckily, as mentioned earlier, the support of many expert advisors can help navigate this minefield. Nonetheless, the biotech CEO of today needs to be exceptionally well versed in all the dimensions of this matter; politically, strategically, tactically and commercially.

CEOs need to have a clear understanding of how to create value through innovation, not just for shareholders, but for stakeholders too. They must work to establish early and viable pharmacoeconomic models for the products they hope to commercialise and closely monitor the changes across the payer landscape. While an internal team, or an army of advisors, will be helpful in this task, the CEO themselves must understand and show leadership on this issue. Furthermore, the payer environment is such a prominent area of risk to biotech companies; there is a strong argument to begin adding experienced ‘payer’ expertise to the board of directors. I have worked closely with shareholders to define a profile for such a director, and there are examples of companies having appointed directors for this reason.

Functions:

Pricing and Reimbursement
Market Access
Government Affairs and Policy

Competencies:

Commercial Acumen
Strategic Agility
Adaptability

Global Regulatory Affairs Knowledge

Interestingly, very few CEOs have a background in regulatory affairs. In seems, this is not a function in which you hone the skills that the marketplace demands for CEOs. There are exceptions, of course, Katrin Bosely (ex-Editas) and Alison Lawton (Kaleido Bioscience) for example, both had stints in the regulatory affairs area. Regulatory Affairs has been a continually evolving landscape, and effective regulatory strategies are pivotal to the successful outcomes desired by aspirational biotech companies.

CEOs must be able to assimilate the regulatory requirements, including emerging regulations, that will determine the progress of their clinical programs or the ultimate approvals of products intended for commercial markets. Biotech CEOs need to be tuned into the complex requirements of regulators, and with proper guidance, lead the company’s efforts optimally. They must take care to avoid outcomes that might see the company required to re-do clinical studies, face refuse-to-file letters, or deliver clinical data packages which fail to achieve successful regulatory approvals.

Interestingly enough, at the turn the last decade, there was clear evidence to show that regulatory filings by small, resource-limited biotechs were far less likely to be successful than those which were delivered by large pharma. It was one of the distinct advantages of partnering with a large-pharma development machine. While I do not have more current data to compare, I suspect this delta still exists, although it has perhaps narrowed. It underlines the absolute importance of effective regulatory strategies and leadership, particularly in an environment where many more companies aspire to go the distance.

Among the companies with commercial interests, it will be important that CEOs are able to have a sufficiently broad perspective of the global regulatory setting to navigate towards positive outcomes in developing markets beyond the immediate commercial markets. With shifting global demographics, and economic prosperity emerging in other parts of the world, the CEOs need to steer the ship in such a way that they can capture value in as many of these markets as is realistically viable. The second phase of international commercialisation can be perilous in so many ways, and the regulatory strategy must be well-conceived.

Functions:

Regulatory Affairs
Clinical Development
Medical and Safety

Competencies:

Listening
Decision Quality
Problem Solving

Human Capital Value and Growth

Many leaders espouse about the importance and value of their people. Yet, often their actions do not mirror these sentiments. There is an increasing focus on human capital as a valuable resource that needs the same diligent care as financial capital or even natural resources. Such emphasis demands a leadership mindset that is long-term and which recognises the integrated basis on which these resources interchange, both internally within the company and externally with the community and environment.

This emphasis on how businesses grow the value of their human capital is gaining widespread attention among many stakeholders, not least institutional shareholders. The advent of ESG investing has accelerated this, but human capital is now much more broadly considered among investors. CEOs need to be highly focused on human capital asset value and how they manage this for the benefit of the company’s stakeholders, including the employees. CEOs will need to understand the demographics of the workforce accurately; how productive the workforce is, the team composition in terms of skills and experience; workforce attrition and causes of instability, the workplace culture and its development; equality, diversity and inclusion, and how employees are incentivised and compensated.

The demand for CEOs to possess an intricate knowledge of the human capital value of the business, and how it integrates with other aspects of the company, will gain prominence. The emergence of risk and crises amplifies the dynamic changes that can occur in workforce engagement and management. Such events can accelerate and decelerate workplace transformations; materially impacting employees and eroding human capital value. Successful leaders need to have a talent vision for their companies and be able to introduce the right strategies and policies to accomplish this. CEOs who sustainably manage the human capital value of their businesses are more likely to deliver successful outcomes in both challenging and good times.

Functions:

Human Resources
Executive Leadership Team
Board / Compensation Committee

Competencies:

Building Effective Teams
Motivation
Hiring and Development of Others

Technology Convergence and Disruption

You don’t travel far in the biotech world these days before someone is talking about the world-shattering benefits of Artificial Intelligence. This new technology is expected to speed up, reduce the costs, and improve the outcomes of drug discovery and development. But this is not the only new technology in town. The harnessing power of big data, telehealth, robotics, augmented reality, nanotechnologies and wearables, all promise to be impactful on the therapeutics value chain.

The viability of these technologies is not something to discuss here, but unquestionably there are many ways in which technology may introduce advantages in drug development. Some biotech companies are at the forefront of this progress; however, many are still more traditional in their approach and organisational makeup. CEOs over the coming business cycle will need to be explorative with new emerging technologies, seeking to leverage their benefits. This convergence poses challenges though, as the technology and biosciences skills have remained quite separate despite a multi-generational promise of technology-enabled personalised healthcare. Assembling the teams with the necessary skills and know-how will prove very hard, given the dynamics and competing interests of both talent environments.

CEOs should find ways to ensure their operating teams, and also their board of directors, are suitably conversant with these new technologies. The CEOs will need to understand and employ the technologies as tools to improve processes and outputs but also to acknowledge the competitive disruption that such technologies can introduce to the marketplace. Silicon Valley has a pretty good track record of innovating, and healthcare is an area in their crosshairs. Failure to identify, monitor and utilise suitable technologies will prove detrimental to a company.

Functions:

Drug Discovery
Translation and Clinical
Medical

Competencies:

Technical learning
TQM/Re-engineering
Process Management

Culture Building

Company culture is difficult to describe. Most attempts hinge on the regurgitation of a list of ‘values’ or ‘behaviours’, and which often fall short of genuinely portraying a company’s culture; for good or bad. Anyone who has worked in a company with a strong company culture, knows all too well that the intangible dimensions of culture are what defines it most. You just know when you see it, feel it, experience it. Of course, the same is acutely true when you experience a negative culture too.

Very often, company culture is seeded by the board of the directors, with an expectation that they set the ‘tone from the top’. Although the board is crucial in casting the cultural DNA, it is incumbent upon the CEO and her management team to promulgate this cultural identity through the organisation as it grows or contracts. The manifestation of a company’s cultural identity begins to enable it to build a reputational brand that has currency in its interactions with stakeholders.

Company culture is complex. Because many things contribute to it, many things can also jeopardise it. Culture can be a source of value and competitive advantage, but equally a significant source of risk too. It is debatable to what extent the CEO must be the architect of company culture. What is certain, is their role in nurturing and facilitating the culture necessary to bring sustainable success to the company, by whichever metric that is defined.

Biotech companies grow in quite predictable patterns, emerging from scientific foundations to become more complex organisations with many high-skilled functions. The transitions from discovery to clinical development, and onwards to commercial, all bring cultural evolutions. Successful CEOs will develop cultures which seamlessly evolve; deftly dampening the negative gyrations that destabilise employees and transmit to external stakeholders.

Functions:

Human Resources
Board of Directors
Operations

Competencies:

Managing Vision and Purpose
Ethics and Values
Integrity and Trust

The paragraphs above point toward a CEO that must be across many different success factors. This multidisciplinary capability comes on top of the already established core requirements that a biotech CEO must demonstrate, many which will be familiar to you. The critical functions that are highlighted throughout this article also highlight the fact that managing a biotech company is a team sport, whether that be an in-house or virtual team. Which bring us to the last point.

Hiring and Managing Highly Diversified Teams

Putting together a team of leaders for a biotech company is not easy. A business starting out suggests the company is subject to higher risks than more mature companies, although risk exists at many stages of company building. Risk impacts your ability to attract the good talent. CEOs have to put together multidisciplinary teams that encompass the requisite skills, experience and competencies crucial to the business. In doing so, they often return to former colleagues, friends or close associates with whom they have an established relationship, trust and understanding. It is what drives much of the hiring from within personal networks.

In creating their team, the CEO will need to be placing an essential emphasis on diversity. Aside from the stated advantages of diversity, such as perspective, skills, market knowledge, risk awareness and more, there are increasing demands from stakeholders, including investors, to build highly diverse teams and to manage inclusively. Conceptually, this seems straight forward, but the multi-year data suggests that biotech has not been highly progressive in its approach to leadership or board diversity. CEOs will need to find new and innovative ways to identify and hire candidates from more diverse backgrounds, which will almost certainly require going outside their networks. It will require more considerable planning to afford the time necessary to acquire the right people and enrich the overall team composition.

Having put together the team, CEOs will need to manage this diversity and do so inclusively. Such changes in the way teams are built and led, will introduce new challenges for many otherwise proven leaders. For example, executive search firms are increasingly applying ‘inclusive leadership’ filters to their assessment criteria, meaning candidates need to exhibit inclusive behaviour in their leadership of teams and some track record of creating diversity. The elevation in the importance of building and managing diverse teams will shift hiring decision criteria, as well as performance management metrics for CEOs.

Functions:

Staffing and Talent
Executive Management Team
Diversity and Inclusion

Competencies:

Managing Diversity
Peer Relationships
Empathy

The biotechnology industry was in great health going into the Covid-19 crisis, and with the importance of healthcare provision magnified by this global pandemic, it will unquestionably emerge with renewed focus and opportunities. This will demand great CEOs, both new and experienced, and the sophisticated blend of skills and competencies set out in this article will form a large part of being successful.

Liftstream is an executive search and leadership advisory company serving companies across the global life sciences industry.

Posted in Executive Appointments, Insights | Tagged biotech CEOs, Chief Executive Officer, Covid-19, executive appointment, experience, Hiring, insights, professional competencies, skills | Leave a comment

High Demand for Chief Medical Officers in Biotech Requires Smart Hiring

Posted on May 5, 2020 by admin

One of the recent pinch-points of biotech hiring has been Chief Medical Officers. The growth in biotech investing over the past decade has undoubtedly contributed to the increasing need for these senior leaders, as more companies approach or move through the clinical trial stages. Innovation in many different therapeutic categories, and the emergence of new complex modalities, is contributing to a growing demand for clinical and medical expertise in the biotech industry. Furthermore, the capital markets have been highly receptive to supporting biotech IPOs and provide the financial resources necessary to fund the clinical ambitions of companies, boosting the sector’s prospects.

Throughout most biotech clusters in the Western economies, this has led directly to very high demand for senior clinical experts, far outstripping a consistent and manageable supply. The bulk of this demand has come from biotech companies at either a pre-clinical or clinical stage who identify how crucial it can be to the viability of the company to have high-level clinical and medical leadership steering R&D efforts.

The impact of Covid-19 in early 2020 may cause many biotech and pharma companies to adjust their clinical plans over the 2020/21 period, and broader economic and social implications could also result in the loosening of the talent supply. Although, during the peak of the financial crisis of 2007/8, the lack of willingness by many well-positioned executives to consider changing jobs, led to a general lack of movement and temporary tightening of the talent supply. Even if we ultimately see some loosening, the ongoing servicing of Chief Medical Officer requirements will almost certainly remain challenging.

Understanding the role of the Chief Medical Officer:

The appointment of a Chief Medical Officer is something companies have chosen to do earlier in the development cycle. Investors, boards and CEOs; having learnt lessons during past biotech investment cycles; have collectively acted to introduce clinical and medical leadership earlier than in the past. Some reasons for this earlier recruitment have been due to the external environment, with more initial consideration for regulatory and payer requirements now critical to the drug development process. Companies need to be very clear about the drug they wish to develop, the disease or indication they want to treat, and the patients they want to help. Many of these critical strategy questions must be answered early, and so appointments have reflected this adjusted timeline.

Companies have adapted to many of the external market changes, such as regulatory and reimbursement. Still, they have also needed to design their organisations to reflect the right organisational structure for the business strategy. A decade or so ago, the industry was focused on operationally lean, often virtual, drug development. Most companies also preferred to find pharma partners who could deploy tremendous resources that would take on the development from Phase II and manage later and larger-scale trials. As capital flowed into the sector, particularly to companies wishing to tackle diseases with smaller patient populations, companies have been increasingly encouraged to push ahead with programs themselves, targeting later value opportunities, if not pursuing the ultimate goal of commercialisation.

The changing external business environment and the shifting internal operational needs, when combined, have reshaped the associated responsibilities of the Chief Medical Officer in a biotech company. Consequently, it has altered this crucial leadership position, adding specificity and complexity to the requisite skills and experiences at a time where the demand side has grown tremendously. This positive effect has led to an incredibly challenging hiring environment for CMOs, often a crucial appointment.

External Figureheads

It is the intersection of the external and internal responsibilities that often determine how to position the CMO in the company. In some biotech companies, they elect to adopt a structure in which the CMO becomes a very notable figurehead for the company, representing them in the external market with key stakeholders, including KOLs and patient organisations. In such a scenario, a CMO will hold limited responsibility for the operations of the company and for leading people. This external-facing and strategic CMO role often situate it separately from the development operations. In such cases, companies often bring other leaders into the company to fulfil these operational mandates.

All-in-One

This bifurcation of the two principal functions of the CMO, clinical development and medical, are at the heart of the other two dominant CMO structures in biotech. The most prominent structure in biotech is where the CMO is the de-facto leader of the development organisation. In this context, the CMO assumes responsibility for most of the internal and external activities across both clinical development and medical. Such an appointment often requires a CMO who can bridge the many complex challenges that exist from early clinical through to market; should the company be successful in reaching these later stages. Relative to other functional leads, this demands a leader who can build and manage the broadest set of functions. Such a requirement can impose considerable recruiting difficulties.

Dividing Up the Organisation

The third scenario is where the Chief Medical Officer does not assume responsibility for the development activities but instead is charged with leadership of the medical organisation, including drug safety, regulatory, medical affairs and quality. This CMO has the external engagement responsibility that we discussed in the first scenario, and the leadership and operational role too; only here weighted more towards medical. The CMO, in this case, is usually situated in the R&D organisation, commonly alongside a development leader, sometimes reporting to an R&D Head, or the CEO.

It is too simplistic to suggest that any of the three approaches discussed here is the best for biotech companies. There are many reasons why a company may choose to opt for one of these models relative to their science, technology and business model. Each approach brings relative complications in the context of hiring and the ultimate success of the appointed CMO.

Looking for Leaders

One of the key obstacles with appointing a CMO in a biotech is ensuring you’re acquiring the managerial experience to lead the diverse set of skills and experience that will form the organisation to be managed. In small and early stage biotechs, where the CMO is entrusted with all the usual functions, everything from translational medicine to medical affairs, it can include 60-70% of the internal headcount of the organisation. Companies, therefore, require CMOs with a capacity to oversee and successfully lead multidisciplinary teams that are core to the long-term functioning of the company, and heavily contribute to the culture of the company.

Identifying such leaders, with the requisite competencies to build and manage successful teams is not a trivial task in an otherwise competitive market. Strong leaders who have shown themselves adept at organisation building are likely to garner attention from investors and boards as candidates for CEO roles, EIR positions and the like, meaning they have other career paths open to them beyond CMO. Those candidates whose ambitions are more narrowly set to CMO-type roles must show themselves able to bring emotional intelligence (EQ) and the people qualities necessary. It is easy for a company to prioritise the deep clinical and medical qualifications a candidate brings over people skills, but many times this results in an unsuccessful tenure.

With a distinct shortage of CMO-level candidates, companies are encouraged to engage in promotional hiring. However, elevating someone from the role of Medical Director to CMO prematurely can lead to the appointed person being deficient in many aspects of leadership. Careful thought needs to be applied to such an appointment.

Adding Scientific and Technical Expertise

Adding a CMO to the company’s leadership indicates the desire to bring specific clinical or medical expertise to the company to help drive early or full development programs. In preparing to do this, the discussion often centres on the very scientific, clinical or technological knowledge that would be deemed valuable.

In this situation, it is occasionally obvious the experience that is needed. However, with many new modalities and therapeutic approaches, the value of experience from other domains can be incredibly useful to many companies. For example, cancer immunotherapy is an area where CMOs with experience in other disciplines became more applicable. Instead of hiring oncologists or haematologists, companies pursued candidates with experience in immunology, cell therapy, or transplantation.

However, this diversification of the candidate pool can be very challenging in a recruiting context. Some thought needs to go into where the highest priorities lie. For instance, a company developing a gene therapy program for haemophilia may wish to appoint a CMO to acquire specific expertise in gene therapy. When going into the market to recruit, they find that many of the existing candidates are expert in other therapeutic areas, like ophthalmology, where there have been many gene therapy companies. They then have to decide if they prioritise the gene therapy experience, or go back to the market and find a haematologist. It is worth noting here that even though the company looking to hire the CMO may be incredibly bullish about their programs and likely success, an ophthalmologist of 30 years is unlikely to want to move into a whole new disease category. And so this becomes a repetitive outcome as the company reaches more people of a similar background.

Of course, not all companies are focusing in on a single disease, and therefore, require a CMO who can contribute across many programs. However, this calibration of just how important the particular knowledge of a drug target, a disease, the modality, or even the patient population, truly is, becomes a defining ingredient to a successful hiring strategy.

Varied Operational Experience and Agility

The operational preferences of CMO candidates often show up in their experience. If you consider a function like clinical operations, for example, CMOs often express very fixed ideas about whether this function should be in-house or outsourced. Operational inflexibility is normally a negative attribute, and in a leader who has such a considerable influence over multiple functions, this can be very detrimental.

Small and growing biotechs must retain their operational agility. For them to endure, the leadership also needs to have this mindset. Companies with highly adaptable leaders who can scale-back or shift direction, often win out in the changing fortunes of biotech. A CMO must show this too, and evidence of this in prior operating environments is an important signal to pay attention to during the hiring process.

Brief Tenures and the Compound Effect

In tight talent markets, the demand-side opportunity is abundant, and the supply-side gets the pick of opportunities. A consequence of this over time is that candidates are competed for very aggressively, with better jobs, better compensation and better prospects. This fierce competition, alongside other market factors, drives the frequency with which people move from job to job. Average tenures get pushed down, and the ‘in-job’ experience diminishes.

In the CMO job market, this effect is currently highly visible. Candidates, either active or passive, have average tenures that have come right down. As a one-off, a candidate with a tenure of somewhere between twelve and eighteen months is no big issue. However, if you identify this repeatedly over a sustained period, this provokes concern. Historically, this concern would have centred on the ‘loyalty’ to an employer. Today though, the concern, particularly in the case of a CMO, is what have they been truly able to accomplish in the position, and what is the compounded effect over several roles with similar tenures. Biotech is a slow and complicated business, and a year is not much time as a CMO to accomplish much. So this issue of tenure will continue to be an essential aspect of hiring to pay attention to longer-term.

Avoiding Common Mistakes

In markets where talent is tight, companies, and those charged with hiring, tend to find themselves in the unenviable position of beginning to make compromises about the person they intend to hire. The compromise begins when the mental process of defining the requirement meets the stark reality of the marketplace. In such circumstances, and depending on the severity of the need, hiring companies begin to chip away at the description, looking for areas where they can concede to the marketplace. Such conditions tend to introduce issues into the hiring process and quite often results in hires that do not meet the requisite expectation. Below we look at three areas where this commonly occurs:

1. There are very many senior medical leaders who are incredibly valuable to organisations of different sizes and growth trajectories. A common error is that a company hires a CMO who sees their role as more ‘advisory’ or ‘consultative’. They envisage spending their time engaging with key opinion leaders and external representatives, as well as supporting the company with high-level strategic guidance. In most small and medium biotechs, this is a luxury that can’t be accommodated. Smaller companies need people who can and are willing to roll up their sleeves and get involved with the more operational elements. As covered earlier, the structure has some bearing on this, however, most biotech companies need this operational attitude. In terms of recruiting barriers, this can be an area of early compromise, which almost always proves negative.

2. Communication, as with most jobs, is a vital part of the CMOs role. A CMO must be very adept at communicating the company’s message to a broad set of stakeholders, and must do so in a relevant manner. Prior experience as a CMO may provide evidence of such capabilities; however, many companies are appointing CMOs who come to the role for the first time, either from more junior posts or without the experience of the full stakeholder engagement. In particular, investor communication is a vital function of many CMO positions, and is also very demanding for many reasons. Companies are inclined to compromise on facets of the communication skill set, choosing to narrow the essential requirement to communicate with the community of KOLs and clinicians. This reduction insufficiently acknowledges the underlying importance of fully developed communication skills that are a critical success factor of CMOs.

3. By the time most candidates reach CMO level these days, they will have acquired quite considerable experience in international markets and global working. But not all. And this can often be an area that offers some prospect of compromise. Companies struggling to hire can relax their requirements on international experience, electing to consider those candidates with domestic market experience. Although it can seem relatively straight forward to adapt a person’s experience to a more international setting, the reality is often far more problematic. Being able to set-up, run and manage clinical programs in multiple countries requires a certain level of international know-how. The same is true of many of the other responsibilities assigned to the CMO, such as building and managing international or global teams. These geographic dimensions mean the task gets all the more difficult. If the company needs a CMO with international or global experience, then this is something any appointee should bring to the company.

Ensure good oversight from the board:

It is incredibly valuable to have a competent drug development expert on the leadership of a biotech company. Critically though, this person must receive sufficient challenge from others, both within the management and also at the board. At a time when the company’s critical objective is driving the clinical development process, the CMO can become a very dominant voice; influencing critical decisions about many aspects of the development plans, and the related financial commitments of the company.

Companies which fail to introduce adequate oversight from the board of directors, primarily because of a lack of the right expertise, can find themselves solely reliant on the prevailing wisdom of the CMO. This dominance can lead to sub-optimal outcomes. Therefore, board composition should be planned to ensure that the necessary expertise resides on the board as to be able to have balanced and constructive discussions between the board and leadership (inc. CMO) about clinical and medical matters. If the board composition does not allow for this, then the board should set up a way for this rigorous oversight to be introduced somehow.

The need for Chief Medical Officers represents a test for the industry and individual companies. The sector, which is maturing rapidly with more companies reaching the clinic, need these leaders on the management team. With no dramatic shift in the availability of such candidates, more creative recruiting approaches will need to employed to reach qualified candidates. How candidates are assessed will also need to be thought about, as to ensure the range of skills, experience and competencies are satisfied. As we enter the summer (2020), there are many severe operational issues to confront too, which will impose complication on the search process, but also the assessment and employment of CMOs. When the dust settles on this pandemic, we can be confident that hiring CMOs is still going to be a difficult task, requiring a planned and well-executed strategy.

Liftstream is an executive and board level search firm exclusively serving the global life sciences sector.

Posted in Executive Appointments, Insights | Tagged appointments, biotech, Chief Medical Officer, clinical development, Headhunter, Hiring, insights, Medical Affairs, pharmaceuticals, recruiting | Leave a comment

Corporate Culture Health Needs Outcomes-based Focus

Posted on April 28, 2020 by admin

This article was authored by Karl Simpson, CEO, Liftstream.

Sporting analogies are almost ubiquitous in business. The constant search for simple, relatable terms with which to describe the context of the business situation often has us reaching for widely understood sporting terms that suitably express the challenge. At a recent gathering of business people, I asked all those in the room who considered themselves physically healthy, to raise a hand. Everyone’s hand went up, including a gentleman who quipped about recovering from a heart attack. I then asked them to keep their hand elevated and only lower them once they felt I had asked a question about their fitness that exceeded their personal threshold. The point of this exercise was to show that people are generally very bullish about their state of health relative to the wider population. Only once you set more specific criteria at higher and higher levels, do they begin to realise, and admit their relative condition.

The reason for wanting to demonstrate this is that during my 25-year recruiting career, visiting companies, large and small, to discuss hiring objectives, I struggle to recall more than a handful of companies who gave an honest assessment of their company culture. Almost unanimously, companies espouse their ‘unique virtues’ (commonly found elsewhere) and try to convey just how strong and healthy their company culture is, relative to the marketplace. Companies, like many people in the room that day, consider themselves among the healthiest. In fact, with companies, many like to say they are the ‘best’ – a self-acclaimed position difficult to uphold under scrutiny.

Company culture can be incredibly powerful, bonding employees, as well as stakeholders, both to the company itself, as well as one another. Strong company culture can deliver far higher employee productivity because of better engagement. It brings other significant benefits too, such as hiring and retention; inclusiveness, innovation, decision making; reduced risks and more. It is why, today, CEOs and senior management, need to be exceptional culture-builders. However, owing to the amorphous nature of corporate culture, it is often difficult for people to articulate the essence of what defines theirs. For this reason, quite often, the list of values and behaviours that companies use as a framework for culture, but which are revised too regularly, substitute the lived cultural experience of the employees.

The result is a misalignment between the management’s view of the culture and that of the employees. Ask most CEOs about their company’s culture, and they will give you a glowing health and fitness report. Question them about typical cultural fault lines, and commonly the response is with opacity, denial or some form of justification about why that particular indicator is not relevant to the business. As I have experienced over time, most consider their culture to be incredibly good – upper-quartile good – if not the best.

As with fitness, there is a spectrum of corporate culture health which would be evident if plotted on a performance distribution curve.

But what are the exercises that help build a strong, healthy culture?

Outcomes-based

Let us extend the fitness analogy. Any person undertaking a fitness improvement program firstly needs to define their fitness goals. What is the outcome that they’re looking for? This outcomes-based approach to defining a fitness and health regime will determine the subsequent actions and activities a person undertakes, as well as the way they choose to measure the progress. With elite athletes, this gets incredibly detailed and scientific, if the athlete is to be the best.

The same is true of company culture. There needs to be an acute understanding of the outcome sought before embarking on the journey.

Universal Principles

Anyone seeking to make health and fitness gains will know that some universal principles must be observed. Whether the goal is to participate in a park fun run or do a triathlon, irrespective of your starting fitness, your conditioning relies upon following some universal principles: such as proper nutrition, hydration, sleep, stretching. These always apply to all.

In a company culture context, there are universal principles which must form the root-system of your company if it is to have a healthy and enduring culture. In the broadest context, these would include employee health and safety, provision of human rights and worker’s legal entitlements; and policy provisions in areas like compensation and place of work.

Selecting Inputs

If, as suggested before, you are choosing to do a fun run in the park, then your training program is unquestionably different from a triathlete. Selecting the training program that provides the inputs necessary to achieve the goal and peak at the right level is crucial.

For many companies, it is here that they often begin. Without understanding the desired outcome, or without bedding-in the root-system, they select from an extensive menu of people-oriented cultural inputs that they feel are highly desirable to the workforce. In some cases, these inputs will be broadly additive to the overall culture, but they are unlikely to combine to bring the total value to a culture that would be gained from taking the preceding steps. Similarly, borrowing from others, imitating peers, introducing shortcuts, all lead to cultural confusion and poor outcomes.

Inputs need to be carefully selected to reach the goal. These are the individual exercises that are necessary to transform your cultural performance. They can, and almost certainly should, be specific to your organisation and tailored to support your outcome-based program.

Measuring Fitness

Presently, we are all pre-occupied with data. Our personal electronic devices record many of our health stats; steps, heart rate, distance run or swam; and calories burned. Knowing what data is useful to the specific outcomes is an essential first step. The frequency with which to process this data is also crucial to measure the status of our health.

Companies have lent heavily on collecting employee surveys as a barometer for measuring the culture. Almost certainly, alone, these feedback metrics are inadequate. Companies struggle with setting appropriate data metrics to assess culture because they rarely understand either their starting point or the outcome they seek. There is also intangibility to culture, which can make measuring hard to do. Consequently, they tend to do what most amateur health enthusiasts do, which is to engage in periodic activities and make crude, often inaccurate, assessments as to their overall health.

Setting and embedding a corporate culture is not straightforward, far from it. There are many things which can blow it off course, and periods of incredible pressure and stress can cause company cultures to fracture, be reshaped, or even disintegrate. In a time of growth and expansion, cultures evolve, and a company’s culture is not easy to export to new territories. But good cultures endure, outlasting the leaders that seed them.

The Covid-19 crisis will stretch and challenge many cultures because of the dislocation employees are experiencing. This testing period will tell us much about the strength of the cultural DNA running through companies, and it will highlight the exceptional value of leaders who can build healthy cultures for all employees.

When we return to more conventional interactions, while accepting the influence this pandemic period will have on corporate behaviour, company culture will again rise as a prominent objective of leadership teams. Let us hope that leaders will approach this by being more honest about the health of the culture in their business and taking the necessary steps to fix it.

Liftstream is an executive search and leadership advisory company serving companies across the global life sciences industry.

Posted in General | Tagged CEOs, company culture, corporate culture, Covid-19, healthy culture, leadership, workplace culture | Leave a comment

Going Beyond One to Hit Critical Mass on Board Gender Diversity

Posted on April 20, 2020 by admin

Defining the problem:

• Too many companies consider ‘one and done’ to be an acceptable threshold for appointing diverse candidates to the board of directors. These companies, although credited with adding some diversity, are not fully benefiting from it; to do so they must have a critical mass of at least 3 diverse candidates.
• Boards are not moving towards a critical mass of diverse directors quickly. For example, at the current pace of change, it would take the biotech sector until 2036 to reach 30% women on boards.
• Just one woman board member renders a company’s board diversity very fragile because when they leave, the board returns to being all-male, which is contributing to 40% of all-male boards in the UK and 42% in the US. The sustainability and transformative impact of board diversity is being missed by boards currently.
• Women are dramatically under-represented as directors serving on the boards of biotech companies, with just 1 in 7 directors a woman.
• For boards to reach critical mass, the boards need to reach 30% women directors (or at least 3 per board), and only 7% of private biotech companies currently have more than 25% of women on their boards. In a study of Californian public life sciences companies, 12% were found to have reached that threshold.
• Currently there is an insufficient level of board refreshment occurring on the boards of many biotechs, resulting in static boards absent of important skills and perspectives. Some 31% of directors have served over 9 years, and often used benchmark for independence, and 14% are over the age of 70.

Women are very clear that when they join a board as the only woman, it is challenging to have the impact and influence that they’d ideally like. They are often joining a board where they have been appointed as the first-ever woman on that board and many do report being perceived as the ‘diversity appointment’, which lengthens the time it takes to establish their legitimacy and effectiveness. Where women are on a board with at least one other woman, the strength of their voice grows and they are able to be more impactful. However, research suggests it is only when three women are on the board together that the value of their contribution to the board’s matters is optimal. This 30% (or 3 directors) number is the aspiration of so many advocates for more diversity on corporate boards. Less than this engenders a compromise solution to board diversity, lessening the possible performance of the directors and the board.

Liftstream providing a Solution:

We continually monitor the life sciences sector to identify and track companies who do not have a critical mass of women on their boards. This analysis contributes to our published studies, as well as enabling us to engage with companies who may require additional women on their boards.

Our analysis also provides opportunities to track the longer-term performance of companies who have added women to their boards, particularly those with more than one woman director. It gives us the opportunity to look at longer-term analysis and the relationship between gender diversity on a company board, and the benefits for companies.

Comprehensive and continual research of boards right across the global life sciences sector allows us to build up strong market data and intelligence around where women directors are currently serving on boards.

We work closely with Chairman, the nominations committee and CEOs to outline the distinct advantages of board diversity and to implement a clear plan for increasing the number of women on the board over time. This includes looking at the current board composition and any planned or encouraged turnover among existing directors.

Posted in Board Director Appointments, Workplace Diversity | Tagged 30 percent, biotech, Board Appointments, board diversity, critical mass, women on biotech boards, women on boards | Leave a comment

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