Company Culture: Continuation On A LifeSciVC Theme

Posted December 11th, 2014 by Jeff Hatfield, in Biotech startup advice, Corporate Culture, From The Trenches, Talent

This blog was written by Jeff Hatfield, CEO of Vitae Pharmaceuticals, as part of the “From the Trenches” feature of LifeSciVC.

Over the past two weeks in LifeSciVC, I read with great interest and appreciation the blogs of two friends of mine – Bill Marshall [here] and Ankit Mahadevia [here] – as they offered useful perspective on the most powerful tool we have as leaders – company culture.

I am a big believer in working hard at creating the best possible culture for one’s team, so last week, I was deeply honored to see my company recognized as one of the ‘Best Places to Work’ in the state of Pennsylvania.  This marks the fifth year in a row we’ve been recognized, and this year was one of our best, ranking #12, competing against every company with a significant business site operating in the state.

Since I believe this topic is so important, I thought I’d build on the theme (or riff with Bill and Ankit, as this site’s architect, Bruce might say).  Here are some thoughts, reflecting on my own experiences, in both biotech and big pharma before.

First, culture in a company is defined by the full sum of what we do and say (and whether they match) and how we do it or say it.  Less obvious but just as important, culture is defined by the things we don’t do or say – decisions we don’t make, issues we don’t address, etc.

In biotech, my experience is that management teams and boards are particularly thoughtful and thorough in planning for the success of their programs, and also for considering the risks and building contingencies.  Because of the power a strong culture can have, and the destructiveness of a bad culture, I believe we should approach the creation of company culture with the same vigor that we manage portfolios or hedge for risk. And we should do so while acknowledging that culture is hard to see, understand and measure – it’s an amorphous, constantly evolving phenomenon that requires constant vigilance and hard work to influence.  Here are some things I believe in:

Building a strong, productive culture starts with finding a vision or purpose that all can truly buy into.

One moment I remember most clearly at my current company involves purpose.  I have a habit of occasionally getting a random handful of employees together for lunch, to chat about whatever’s on anyone’s mind.  These tend to be loose and candid events, and I’ve enjoyed and benefitted from every one.  One day, shortly after we had hired a truly talented and accomplished scientist into the company, I asked that person during lunch, “Why are you here, what brought you to our small company?”  For reference, my company is in the heart of big pharma land, and great scientists can choose among the likes of Merck, GSK, BMS, J&J, Sanofi, AZ and others as a workplace.  I’m always interested in why someone chooses a biotech path over a big pharma one. I will always remember the answer because of its simple power, and how it relates to the idea of purpose.  The answer was, “I’ve always been interested in science, all the way back to my teenage years.  My life and career have been dedicated to being a scientist, and now as I’ve gained experience, perspective and skills, my clock is ticking to discover and deliver a drug that matters to patients around the globe, a medicine that makes a difference in their lives.  As to why I’m here specifically – I’ve decided that my best chance to do that, to reach that goal, is by working right here.”  Wow.  I actually got goose bumps from that answer – partly because that’s exactly why I’m here at this company (see my previous blog about patients here).  Following that lunch, I asked more and more of our team – and got virtually the same answer, expressed in different words, throughout the organization.   It’s certainly important for us to work to enhance shareholder value, which we do, but the power multiplier is so much greater when we all coalesce around a shared goal – or purpose – as the reason we’re here working hard together. Common issues of our industry, including “me too-ism” and “process over progress” can’t compete with the motivational power of a team’s shared purpose to make the world better for patients living with disease.

From there, with a shared purpose, we started defining what environment we wanted to work in – what would make our company a ‘Best Place to Work’.   One obvious way to do this is to simply ask everyone, “think back to the best place you’ve ever worked; what made it that way?”  (Try taking that test yourself – what’s your answer and how does it compare to your current status?)  What I heard was:  a shared, compelling goal, an emphasis on trust and teamwork, and clear communication around what each person’s role was and how it fit into achieving the larger goal.  I think it was important that we didn’t start from a consultant’s slide deck or a top selling business book. It really came from the employees, bottom-up, saying, “Here’s what we want. We want to focus on real innovation, not incremental stuff. We want to work together as a team, with all the different disciplines pulling together, because that’s how you do science. We want to get things done, make decisions and have responsibility for results, not just factory work where we’re expected to produce X number of compounds.”

Leaders have the greatest impact on culture through their actions, and the greatest responsibility.

What we do, how we act, and what we don’t do are the determinants of exactly what we’ll get in terms of culture.  A great lesson I’ve learned over my career is that one of the biggest failures a leader can have is to instill a “do as I say, not as I do” culture.  When leaders say they value something, but conduct themselves in conflict with that, the company takes on a politically charged “us vs them” atmosphere leading to a dishonest culture.

On the flip side, nothing can be more gratifying for a CEO than creating a “story” by acting on an opportunity to put your values to the test.  At another group lunch, at the very beginning of my tenure at Vitae, I was talking to another of the company’s great scientists. I asked her what I needed to do to help the team be more successful.  She replied that she needed a new piece of equipment – a triple quad – and that critical work wasn’t getting done.  She continued that everyone on the science side agreed we needed it, and that she had been trying for months to go through the capital asset requisition legacy system that required extensive descriptions, justifications, analyses, etc. (we all know what that looks like), and that she just wanted to do more work.  Opportunity!  I got up mid-lunch, did some fact-finding, and realized that the information that had been requested was far beyond what was necessary for effective internal control (and was instead “process over progress“).  Knowing that the proper oversight controls were met, I signed the requisition and gave direction to order the equipment within the hour.  Then, I went back to finish lunch with the employees, with a solution in place.

My focus that day was on ensuring that we respect the need for internal controls, and once met, we then need to move quickly in our highly innovative industry.  I got a chance to prove my own commitment to that value via immediate action in the middle of lunch.  The story quickly spread across the company, and the story lives on.  Actions prove what the culture is, not speeches.

How we measure results in a purpose-driven culture.

As Bill Marshall said in his blog, “if you don’t measure results, you’re only practicing”.   We measure indicators of values.  Every year, we center a significant portion of the annual performance review on a full leadership team discussion about every employee in the company.  We talk about what the employee did that year, and equally as importantly, how they did it.  I have found that there are occasionally some big surprises about how someone works when you have all the disciplines and groups in the same room sharing perspective.

Again, a story from early on – I remember one review meeting where a senior scientific leader was absolutely convinced that one of their employees was “the best.”  They worked very well with that person, and there was a real connection.  However, every other scientific leader thought quite differently.  Over an emotionally heated hour of discussion that we dedicated to really understanding the situation, this employee dropped from an outstanding rating to needs immediate improvement, with a very specific development plan including team behaviors.   This was not an easy decision, but it helped to validate our culture of teamwork in the eyes of everyone throughout the organization.

A company also needs to measure its leaders.  One method we use is the independent system of the Best Places to Work survey process conducted by the Team Pennsylvania Foundation and the Pennsylvania Department of Community and Economic Development to help monitor the performance of our leaders.  There are a large number of parameters that are measured in this blinded survey.  I’ll use the tried and true Top Ten list approach to cite the ones I think provide the most important feedback for me and my leadership team regarding the job we are doing to support our culture:

  1. Senior leaders live the core values of the organization
  2. I feel I can express my honest opinions without fear of negative consequences
  3. I can trust what this organization tells me
  4. I feel I am valued in this organization
  5. I believe there is a spirit of cooperation in this organization
  6. I feel part of a team working toward a shared goal
  7. I understand the long-term strategy of this organization
  8. I understand the importance of my role to the success of the organization
  9. At this organization, employees have fun at work
  10. My employer enables a culture of diversity

I think building and nurturing a positive culture is one of leadership’s top responsibilities.  It’s hard work, and it’s accomplished day-by-day with our decisions, actions, priorities and statements.  Thanks to Bill and Ankit for getting this riff going – I’m anxious to hear what others think on this topic.

Jeff Hatfield

CEO of Vitae
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