January 29, 2016 – When an industry goes into overdrive for an extended period and the rate of growth outstrips the supply of proven leaders, the senior talent management function comes under particular stress. Those conditions create both challenges and opportunities for the recruiters serving that industry.
In the last several years, few sectors have been moving as quickly as the biopharma industry. In order to get a closer look at how executive recruiting has to adapt to succeed in a highly dynamic environment, we spoke with John Archer, partner at Catalyst Advisors, a global search firm specializing in board, CEO and senior executive assignments for the biopharma industry.
John founded Catalyst Advisors in 2008, after 14 years at Russell Reynolds Associates, where he led the firm’s global healthcare recruiting sector. Catalyst Advisors now has 20 consultants and support staff, with offices in New York, London and Los Angeles.
By all accounts the biopharma industry has been expanding at a very rapid clip over the past several years. How is the speed of the industry affecting the search process?
The industry is being propelled by a wave of scientific discoveries leading to therapies for illnesses and conditions that couldn’t be addressed before, or that now can be addressed in a much more effective way. It’s a very compelling story. Companies naturally specialize in particular scientific areas, so you have multiple firms racing for dominance in the same area. That competition creates a constant sense of urgency around filling senior leadership positions. But because each of these companies is highly entrepreneurial, and trying to do something that hasn’t been done before, it’s critical to get the right people into leadership roles – people who have the technical knowledge, the vision and the leadership skills to take a team to success in unknown territory. And there aren’t that many people who meet that range of requirements.
As a recruiter, how do you respond to this?
This set of pressures – along with the rise of social media tools like LinkedIn that make it relatively easy to track who is where – has really changed the role of the biopharma recruiter. I moved into executive search from the biopharma industry more than 20 years ago, and even then everyone talked about being a ‘trusted advisor’ and moving away from transactional business. But 20 years ago, those ideas were more aspirational than actual – more often than not, even very high-level engagements still came down to simply filling positions. Today, you really do have to add value through insight. That, and having credibility with candidates who are very, very smart and who have don’t have patience for people who don’t understand their business.
What does ‘adding value through insight’ mean in practice?
It means spending a lot of time understanding the strategic goal, culture and context before you get to the job spec. So you might have a global pharmaceutical company that needs senior leaders to streamline its commercial operation so it can stay nimble and responsive to market trends. What has the company’s history been in attempting that kind of move? Is there internal resistance? What are investors expecting in terms of a timetable? These are the sorts of factors that determine who’s truly qualified for the role. It’s knowing the underlying questions to ask of both the company and the candidate, and being able to interpret the answers.
What talent management issues should be top of mind for biopharma decision-makers this year?
Three things are critical:
- The first is board composition. Last year’s correction in valuations hasn’t dampened investor enthusiasm, but it does mean that investors are looking at things a bit more dispassionately – they expect boards to ask the tough questions necessary to ensure management is creating value. But biotech boards tend to be very tightly knit and that can result in a comfort level that undermines the board’s ability to play that oversight role. So I think board chairs and nominating committee chairs need to ask themselves if they could benefit from some fresh perspective in the boardroom.
- The second critical issue is succession. The competition for talent is so great that for most biopharma firms, it is a significant human-capital victory to have built a cohesive management team for today, let alone to have a pipeline in place for tomorrow. But the difficulty in finding talent is all the more reason to focus on internal professional development. Companies that can do that will have a distinct competitive advantage.
- The third issue is diversity. There is a greater awareness throughout the biopharma industry of the importance of having management teams and boards that reflect the composition of the larger employee base. Building leadership teams with diverse backgrounds and perspectives is not only good business sense, but it sends a strong message about company values at a time when company values play an increasing role in employee retention.
How did your earlier career in the biotech sector prepare you for a career in search?
As CFO and then president of a small biotech firm, I had to learn to think on my feet and solve problems I had never seen before, which was good training for working with the range of client challenges we see today. However, perhaps even more important is the fact that it taught me how, as a non-scientist, to be comfortable immersing myself in the science behind a company’s product portfolio. Obviously, you can’t go as deep as someone in the field, but you have to be conversant in the issues and understand how they fit into the larger business landscape because you’re the first one to represent the opportunity to the candidates. Being able to articulate the science is a core part of your credibility, and it’s one of the central qualities we look for in people who join our firm.
Contributed by Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media and Stephen Sawicki, Managing Editor, Hunt Scanlon Media