What are the most important responsibilities of a biotech CEO?
What are the most important responsibilities of a biotech CEO?
A biotech CEO has several critical domains where they need to excel and consistently deliver results. While they do contribute in many different ways depending on the company’s stage and needs, their performance will largely be measured by the board (the CEO’s boss) against goals set in each of these critical domains. Here’s my take on these domains—from the perspective of smaller biotechs—and what success looks like for each.
Hiring: It’s all about the team
Build a high-performing team for your company. The CEO must bring in talent that fits the company’s specific needs and possesses the right skill sets and mindsets to be effective in a small company. They should be very attentive to the hiring processes within the company and, whenever possible, be involved in meeting prospective talent. The CEO should also ensure there is professional HR support and that managers are not imparting conscious or unconscious bias into the selection process. The team is the beating heart of the enterprise, so it is imperative to get it right and to make sure the team is poised for success.
Effectively manage the evolution of this team over time. It is important for the CEO to ensure there is a reasonable process in place to measure performance. Importantly, they must have the courage to address underperformance and make timely adjustments. They also need to anticipate talent needs effectively as an integrated part of the strategic planning and budgeting process.
Articulate a compelling vision and strategy
Own the company’s strategy. It is ultimately the CEO’s job to create a compelling vision and strategy for the company. This does not mean they work alone; their plan will integrate input from many key sources, such as founders, investors, key opinion leaders, consultants, and the team. You can think of it this way: the CEO needs to effectively generate a roadmap for how the company will create value. This includes a few key components, which become more granular as you go down the list, and I provide some illustrative examples below.
• Vision: What is the ultimate product/transformation/end state that the company will create? The vision is the highest aspiration of the company and should reflect the ultimate impact on patients and society that the company exists for. Example: A world without pediatric cancers.
• Mission: Broadly speaking, what will the company be doing to fulfill the vision? This speaks to the company’s operational focus—the research, development, and/or commercialization efforts that the company will undertake. Example: Extending survival for pediatric blood cancers through engineering novel anti-cancer antibodies.
• Strategy: What are the operating priorities and tactics that will be employed to fulfill this vision? This is a roadmap that factors in the resources and culture required, risks, opportunities, and timelines to reach key milestones. It should be clear about what the company will and will not do (for example—targets or therapeutic areas that will be in or out of focus).
These three components, together with the company’s culture, form the company’s strategic plan. Typically, a CEO will develop this plan when they start or join a company or revise an existing plan after they have had some time to develop their own perspective on what the company needs to focus on. From there, this plan is not static; it is a living, breathing plan that will change frequently based on new data, new insights, changing external factors, or a myriad of other reasons. In most cases, it should not be a once-a-year exercise. The smaller and/or earlier the company is on its journey, the more dynamic this strategic plan will be.
“Lead from the front”
Be courageous and involved. Leading from the front means being actively involved with our teams, taking risks with them or for them, leading them through our own actions and engagement. Talented employees don’t want to work for someone who is not willing to get their hands dirty to help the team succeed. When you have a serious purpose (such as transforming the lives of patients with serious diseases), you cannot be successful without leaders who get this paradigm right.
Be passionate and consistent. The importance of consistent and passionate leadership cannot be overstated. Foremost, the CEO needs to absolutely love what they do and demonstrate passion every day. The work we do is very hard. Most programs fail on their path to market, and there are a lot of high and low moments along the way. Biotech teams need leadership that consistently inspires them to do their best work and to remain persistent through challenges and setbacks. It is the CEO’s job to convey the vision and give the team a reason to commit. We ask a lot of our teams, and we cannot expect them to give their all if they do not feel connected to a worthwhile and meaningful purpose. The responsibility to inspire extends to the entire management team and line managers as well, but the CEO has ultimate accountability. It takes strong communication and influencing skills to do this well, not to mention perspective developed over many years of experience in the (battle)field.
Tell (and sell) the story effectively. Leadership and inspiration also extends to engagement with external stakeholders. It is a huge part of the CEO’s job to raise capital, and to do this, the CEO needs to be an effective storyteller. They need to be able to get investors, thought leaders, and prospective biopharma partners really excited about the company’s value proposition and prospects. Part of this is effective storytelling, and part of this is their own passion for the work that comes through. It has to be authentic to them. Importantly, the CEO needs to be ready to inspire at any time. You never know when you may cross paths with someone who can spark a new opportunity for your company if you can effectively (and concisely) inspire them.
Raise capital to fuel the company’s value creation
Effectively raise capital to fund operations. This is a major job of a biotech CEO. Biotech companies that do not yet sell approved drug products need to fund their operations by selling company stock or doing partnerships with larger companies that pay them licensing fees. Fundraising is often incorrectly viewed as an occasional activity. In reality, a biotech CEO is always fundraising. As soon as you close one round or deal, you need to start planning for the next one. Funds are not only raised through IPOs; funds are raised in private rounds or licensing deals, usually for many years before a company IPOs, and then through public rounds or deals going forward. This cycle continues until the company can generate profits that can relied upon to fund operations. The CEO must develop a clear roadmap for how and when the company will raise capital, and it has to be fully aligned with the strategic plan. It requires a ton of planning and communication and heavily relies on the effectiveness of the CEO’s influencing skills, as they need to recruit investors to buy stock or companies to do partnerships. It is a massive responsibility that requires substantial time, effort, and grit. Commonly, the company’s board will provide input and connections to help this process along. Senior subject matter experts within the company will also be involved in pitches and due diligence activities.
To summarize, biotech CEOs may wear many hats, but their most important responsibilities are hiring a great team, owning the company’s strategy, providing effective leadership, and raising capital. An effective biotech CEO will manage their time based on these key priorities and will embrace these responsibilities fully. The board of directors will closely monitor the CEO’s performance in these areas and will likely have metrics in place tied to the company’s strategic plan.