By Morten Nielsen
At this year’s J.P. Morgan Healthcare Conference, the CEO of one of the world’s largest pharma companies stood behind a podium to discuss the state of his company.
After presenting a few slides on recent successes and current financials, the executive spent the rest of his talk on two key topics: disruption in the marketplace and the need for culture change within the organization to manage that disruption. Though the company for years had been engaged in initiatives to reshape its culture and improve its business flexibility and innovativeness, it still had a way to go.
This CEO happened to be Roche’s Bill Anderson, but it could have been any of the major players in the global pharma/biopharma market. His CEO counterparts are grappling with the need for culture change if they are to continue to compete in a marketplace that values change, speed, agility, outside-the-box thinking, and innovation.
These CEOs are looking for a new type of pharma executive, and nowhere is this need more apparent than in the search for gene and cell therapies, especially in the rare disease space. Big Pharma companies are charged with hiring division presidents and other rare disease leaders who can help them break from the traditions of the past — who may think and act nothing like them. The success of life sciences companies will increasingly depend on their ability to attract and retain executive talent with a combination of strong, global leadership capabilities combined with an ability to leverage disruptive innovation.
THE LEADERSHIP CHALLENGE IN GENE AND CELL THERAPIES
Industry experts widely consider gene and cell therapies to be the strongest prospect for combatting disease and caring for patients in the years ahead, particularly for the thousands of identified rare or orphan diseases. The FDA and other regulators continue to take steps to expedite the development and commercialization of these medicines. Skim the websites of firms like Pfizer, SanofiGenzyme, and Novartis and it is clear that they are betting billions of dollars in acquisitions and research to find rare disease products.
This race for growth of course runs counter to the cultures and regulatory environments in which Big Pharma companies have operated. Companies are attempting to modify their cultures to suit this evolving market. However, this is akin to moving a large ship — while building it — through a slalom course.
Recruiting leaders to effect dramatic change and win in the rare disease market instills fear in everyone involved. For the company, there is the fear of hiring leaders who challenge the status quo (especially in terms of costs, resources, and time to market) and who may be perceived as disrespectful of the established culture. The leadership candidates, in contrast, may fear that their creative spark and novel ideas will be diminished and deadened by the bureaucracy and inertia of a large corporation.
This presents hiring challenges. Traditionally, firms seek out leadership candidates who are strong “cultural fits.” In the case of Big Pharma hiring experts in gene and cell therapies, however, they should be looking for “misfits,” if you will. Companies must try to hire leaders who can disrupt their current cultures and rethink past practices.
Pharma companies, therefore, must condition themselves to accept new types of leaders into their organizations. These executives:
- Will not have Big Pharma backgrounds. Executives who have grown up through the ranks of Big Pharma firms rarely have the mindset (around speed, agility, etc.) to succeed in leading gene and cell therapy enterprises. I tell clients, “The leaders you’re looking for have a very different phenotype than what you’ve currently got.”
- May or may not be scientific experts. These executives are often the bridge between the organization’s founding researcher or subject matter expert and the large corporation in which they now operate. They may have a scientific or technical background, or at a minimum, have the capacity to get up to speed quickly on the science behind their therapeutic product. They have a proven ability to evaluate complex information and make confident decisions.
- May cause discomfort and disruption in your organization. In striving to effect change, they will rub some of their colleagues the wrong way and can cause a high degree of anxiety. This is OK and part of the lengthy process of culture change.
- Will want to move very quickly. Rare disease leaders will appreciate the need for accelerating the entire product life cycle from cradle to grave, and may move at a pace that is uncomfortable to the larger organization. They will have a “do it fast and do it right” mentality.
- Will expect a large capacity for risk. Bringing gene and cell therapies to market is inherently a high-risk, high-reward endeavor. Those who excel in leadership will embrace risk and expect their organizations to accept speed bumps on the journey to big wins.
THE COMPETENCIES OF DISRUPTORS
As talent experts go out into the marketplace in search of those rare individuals who will excel given the parameters above, what do we look for? What do these disruptors look like in general? There are a few qualities that we seek to identify. They:
- Embrace ambiguity. Rare disease therapies by their nature don’t have documented histories and accepted patterns of R&D, scale-up, and marketing. There may be few or no regulatory guidance documents. Leaders in this space need to create their own blueprints and operate with a level of ambiguity that is above what is found in traditional pharma companies.
- Have significant M&A experience. Part of the ambiguity of rare diseases is the fact that merger and acquisition activity is rampant. Big Pharma companies are looking to acquire the IP to meet their pipeline expectations. Those leaders who have experienced M&As in the past and have seen their organizations reshaped will accept that it could happen to them again.
- Are great communicators. In driving culture change, they must have the innate ability to bring clarity and instill confidence with superiors, colleagues, investors, and patient and stakeholder groups who all have differing priorities. For patient populations and their advocates, executives must be able to explain the high costs of rare disease medicines and propose solutions for managing the expense to patients and insurers. Physicians must be educated to understand the nuances of diagnosing and treating diseases with which they may not be familiar. These executives must understand how to communicate with regulators, particularly regarding Named Patient Use (NPU) or expanded access programs.
- Are team builders. Executives in rare diseases have a knack for bringing teams together, getting them on the same page, and supporting each other in an uncertain environment. They will have inclusive and situational leadership styles.
- Are prudent. While operating in a fast-paced environment, these leaders must remember that they cannot completely thumb their noses at regulations and processes put in place for consumer protection. So while speed and agility are important, executives must be mindful of risk.
- Are compassionate. Leaders for rare disease therapies become closely aligned with their patient populations and must exhibit a sincere commitment to finding cures and solutions to their challenges.
Some other critical skills and competencies of these leaders:
- An entrepreneurial mindset
- A propensity for strategic thinking and action
- Expertise in:
- P&L leadership
- Clinical development
- Technical operations
- Commercial operations
- Global operations and supply chains
NEEDLES IN HAYSTACKS
Very few individuals check all, or even most, of the boxes above. The marketplace of executives who can excel in leading rare disease initiatives is finite and small. Nevertheless, pharma companies who wish to succeed in the rare disease market must identify leaders with the above qualities. They must overcome their fears of recruiting “misfits” and get comfortable with the idea of hiring disruptors who will drive cultural change and innovation.
A senior partner and the Global Managing Partner for the Life Sciences Practice at WittKieffer, MORTEN NIELSEN has more than three decades of combined biopharma and executive search industry experience.