Building a performance based corporate culture is a key aspect of the biotech innovation business. It can be easy to overlook this facet of company building as one focuses on determining the robustness of the new technology, refining your business model, assessing the intellectual property landscape, rifling through contacts to find great talent and scrambling to attract investors. However, the right self-motivated team combined with the right values is central to converting innovation into products. Great teams who are appropriately aligned will always make better decisions than any individual and building great teams requires great corporate culture.
My past experience in large organizations engrained a strong sense of the importance of the right corporate culture. There were many great things that I wanted to emulate and just as many things I wanted to avoid. When you get the corporate culture right and reinforce the importance of your corporate values on a regular basis, it creates an environment in which the most importance asset, your people grow and thrive. And with that, so will the company.
Setting the Stage: Team Based Creation of Corporate Values
“The only thing of real importance that leaders do is to create and manage culture.” — Edgar Schein, Professor MIT Sloan School of Management
I was recently talking with a fellow biotech CEO for whom I have great respect and admiration. We were discussing some of the key milestones in company building and we had gone through a nearly identical early exercise in corporate value creation. We gathered all of the early hires at the company for an off-site meeting and found a talented facilitator to help the team create the core corporate values. As the CEO, it was important to help establish guidelines for the meeting and expected deliverables. At the same time, you need to be a participant and not domineering. A good facilitator helps to guarantee that.
We spent the entire day hashing through the mission and vision for the company and the key values that the team felt were necessary to achieve our vision (here). It was really interesting to see how the team came together and in a fairly rapid manner found consensus in the key statements that laid out our corporate values. With these in place, we had a common understanding of the way that we wanted to behave as we executed on our plans. Moreover, we have incorporated the demonstration of corporate values as a significant component in the appraisal of performance.
It is obviously vital that company leadership live by the corporate values and demonstrate a commitment to them in management activities. Being intensely focused on goal achievement as a metric of performance is a top priority. However, there is clearly a component of how goals are achieved that is nearly as vital. Reaching the finish line is the ultimate goal, but leaving a trail of destruction along the path only makes the next race more difficult. And there is always the next race. Goal achievement that clearly demonstrates the values you embrace as a company is truly the highest form of performance.
Establish a Company Leadership Style and Common Vocabulary
“Management is doing things right; leadership is doing the right things.” — Peter Drucker, Austrian-American writer and management consultant
As the CEO, it is your responsibility to clearly establish a company leadership culture. I have emphasized an adaptive leadership model that uses The Hersey-Blanchard Situational Leadership® Theory combined with a focus on elements of Servant Leadership. In its simplest form one should adapt a leadership style in an effort to make team members maximally comfortable and thus capable in their roles. Provide an environment in which people continuously grow to become fully capable and thus require your support rather than constant direction.
While the goal is that team members can be fully capable and thus require only your support, there is a key balance between the amount of directive behavior and supportive behavior that is necessary to achieve optimal results. A good leader is able to recognize that and adjust to the current situation. For example, for a new hire or when a strong performer gains additional responsibilities, an effective leader will provide an additional level of directive behavior until that person is in a position to benefit from only supportive behavior from the leader.
The common vocabulary means that you need to encourage transparent communication about the level of competence that a team member has in their current role. Managers should strive to identify when one of their employees requires additional direction and employees should feel completely comfortable letting their managers know that they require additional direction.
Situational Leadership provides a foundation for an adaptive approach to dealing with management of your team. It is essentially a two dimensional representation of a solution to a multidimensional challenge. Incorporating elements of the non-traditional Servant Leadership concepts helps to round things out. Most important is the notion that a leader puts the needs of others first and helps people develop and perform as highly as possible.
Continuous Development and Hard Choices
“A good objective of leadership is to help those who are doing poorly to do well and to help those who are doing well to do even better.” — Jim Rohn, American entrepreneur
No matter how complex the problem that your company is trying to solve, people management may well represent your most encompassing activity. You have hopefully done a great job of recruiting self-motivated, capable people to the team. You’ve created a great culture. And STILL there are countless challenges.
Metrics are the cornerstone of a performance based culture and to quote a sports analogy “If you’re not keeping score you’re only practicing.” Performance reviews require a significant time commitment but they are a critical investment in building a performance based corporate culture. (But everyone still hates them…) I advocate a regular coaching environment so that the performance review process culminates in expected outcomes. The constant open communication allows for effective application of the adaptive leadership model and opportunities to recognize high performing individuals, reinforcing the culture. It also facilitates rapid identification of material performance deficiencies, whether they are based on goal achievement or application of corporate values.
Parting ways with any member of your team is a difficult experience. If someone is clearly not technically capable or unable to operate effectively within your team, the decision is easier and the action should be taken rapidly. However, the situation is frequently not that clear cut. By applying the adaptive leadership model effectively to an underperformer, I’ve encountered multiple situations where that individual has responded well and boomeranged to become a great performer. On the other hand, I’ve encountered good performers with values that run counter to the culture and it is equally important to address their aberrant behaviors as quickly as possible. One aspect that is often underestimated is the impact Management has on an organization by not addressing such behavior and the manner in which this can quickly erode those efforts to create performance based corporate culture.
In the start-up biotech environment an adaptive leadership approach helps retain and inspire your team to perform at its best. I also strongly believe that employee retention is a critical indicator of a company’s success. So it’s not surprising that I find the notion of a fixed, forced attrition of the work force (cut the lowest 10%) completely preposterous in this environment. This approach may have its place in organization making widgets but in one where intellectual capital and innovation are the driving force behind value creation it introduces a culture of fear, which should be avoided at all costs. In real terms, the true costs of replacement and retraining are significantly higher than the costs of being a good adaptive manager.
Perhaps the most difficult situation is when a star performer and exemplar of your culture departs the team. No amount of adaptive leadership can do anything about this circumstance. It’s often a larger life decision which is clearly in the best interest of the individual. Your response in these situations is equally important and an opportunity to reiterate corporate values. Be transparent with your team about what is occurring, rapidly communicate your organizational plan for the near future, and do everything you can to maintain your links to the departing team member.
A true biotech innovation, a solid strategy, a tactical plan to achieve key milestones and a highly competent, self-motivated team is the recipe for success. Providing an environment in which that team can move forward and grow with a common vision provides a landscape that should result in a winning proposition.