Introduction
Like all businesses, life science companies face the trying challenges of accessing sufficient capital, wisely allocating constrained resources, developing and executing beneficially designed collaborations and partnerships, demonstrating the courage to make difficult, sometimes complex, go/no-go decisions, making appropriate risk assessment and effectively managing assets. Today, with over 100 biotech products on the market and sales of the top 24 such products reaching $1 billion in 2006 (ref. 1), the dynamic changes that life science companies experience on the way to product success are, at once, essential and unnerving. Priorities change; goals and objectives are revised often; new skills and talent are required in the transition from discovery research to product development and beyond; some existing roles and responsibilities narrow, others broaden; infrastructure strengthens; and resources are regularly reallocated. This article is the first in a series on managing people changes in life science companies; future segments will focus on dealing with changes brought about by mergers and acquisitions and the effects of adverse events such as product failures.
Commonly in startup companies, a research project or program that may have initially been highly valued by investors and exciting to company founders is surpassed by another project that may appear closer to moving into clinical studies. In such cases projects may be dropped or their resources diverted elsewhere. Researchers are known to work many extra hours to advance 'skunk works' projects that they believe in and find exciting, yet that are not sufficiently resourced by the company. Overall, resources once libe-rally provided for discovery research are often redirected to fund process and product development, clinical studies, regulatory affairs and manufacturing. The effective integration of new, different skill sets as a product moves into the clinic, clears regulatory hurdles and readies for commercial launch is a complex challenge. Such major changes significantly affect employees both professionally and emotionally.
Most people respond to change by passing though four phases. First, they deny that the change is occurring. Next, most resist accepting the change, while slowly but surely gathering more information about what the change means. At this point, they are in a position to begin to consider alternatives and possibilities. Finally, they arrive at a readiness to accept the change and start making it work for them2. People move through change with varying degrees of comfort and at their own unique paces. Wise leaders consider the impact of change on employees, increase communication at such times and provide sufficient focus for meaningful work to continue with minimized distress and distraction.
Growth and staffing
As biotech companies move beyond discovery research through drug development, different skills and talent become necessary. New functions emerge. Cross-functional project teams form. Some temporary employees, advisors and consultants may be replaced by full-time staff. Hint: Find ways to communicate with existing staff about the skills and outcomes that the new functions bring.
Hiring may accelerate. The pressures of adding staff to meet the demands of growth make it tempting to 'squint' at the qualifications of candidates in the hope of seeing what we would like to see. Hint: Hold out for the right skills in the right person. Mismatches in skills or other success factors often result in time-consuming setbacks.
The proliferation of new functions and activities and the expanding head count usually trigger expanded infrastructure. It is very challenging to develop infrastructure that is sufficiently lean yet adequate to support activities across a company. Too little support can limit progress, and too much infrastructure can impede decision-making and interfere with the agility essential to growth. Hint: Keep infrastructure, systems and processes simple, lean and optimally productive.
Some employees, often founding employees, who thrive during the startup phase may struggle to settle into satisfying and meaningful roles in the changing company. Hint: Be creative in designing roles that both meet company needs and play to the strengths of the individual. Where an appropriate match cannot be found, be thoughtful and considerate in determining how founding employees can be treated respectfully and fairly in such changing times. More hints can be found in Box 1.
Retaining key contributors in changing times
To ensure employee retention during periods of change, compensation (base pay, bonuses and stock options) should be strongly competitive. Care should be taken to value key people, in terms of their criticality, productivity and versatility. The critical contributors are those considered 'show stoppers'—individuals whose departure would adversely impact the company's success. Productive contributors, although perhaps not valued quite as highly as 'show stoppers,' would be very difficult to replace, as significant lost time would result. And versatile contributors, though not in either of these categories, have unique skill combinations that are especially critical to the organization. It pays to ensure that these key contributors are appropriately compensated and that they know how highly the company values their contribution.
Communicating change
In the absence of clear communication about exactly what is changing, why it is changing and what it means to individuals and teams, employees' imaginations can run wild, and usually not in positive directions. People tend to assume the worst, speculate and try to predict what is to come. Often, employees feel that information is being withheld from them, when it is more likely that the specifics of the changes are not yet clear enough to be communicated.
Invest time and effort to anticipate the questions and concerns of those affected by changes. Effectively communicating the 'what,' 'why' and 'how' of the changes directly affects the degree and duration of the distractions that come with change.
Summary
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Change is challenging. Uncertainty is highly distracting. Leaders who consciously consider the questions, concerns and anxieties of individuals and teams and who communicate clearly and effectively while implementing changes can expect strong cooperation and good results. Employees who hold reasonable expectations of their leaders during times of change and who work to understand the changes and the possibilities for the future can be ready to make the most of their next steps.
The road from promises to products is smoother and more fulfilling for life science companies that are willing to pay competitively, communicate clearly and often, address questions and conflicts directly and in a timely way, resist over-building or under-building infrastructure, and actively manage employee expectations.
