This blog was written by Ankit Mahadevia, Atlas EIR and c0-founder of Spero and Rodin Therapeutics, as part of the “From the Trenches” feature of LifeSciVC.
As startup folks we are great at keeping our heads down and looking ahead; this blog post was a good excuse to take a look back while digesting Thanksgiving leftovers.
I’m a bit early for the end of the year analyses; however, in thinking about all of the triumphs and setbacks we’ve encountered in 2014, it occurred to me that much is made of these actual events, but very little is said about how teams handle them.
In my opinion, it’s the actions during these events that build the reputation of a leadership team. There’s a great literature on the topic of managing through and learning from setbacks and success (some examples here and here). I’ll contribute to this through my observations both within the Atlas portfolio and outside, and my own experiences as a team member.
Rides to the bottom –From Pharma deals that blow up at the eleventh hour, to a tox signal for a lead compound, to a construction delay that keeps your lab closed for two more months, there is no end to what can go wrong in our business. A few observations on best practices after these inevitable events:
- Help your Board see the ride coming: Few setbacks in biotech are completely unexpected. A key hire that leaves often leaves signs of their intentions well in advance; a reasonable proportion of non-GLP safety studies do turn up findings that need to be investigated. The smoothest Board discussions I’ve observed in the wake of setbacks refer back to a contingency plan discussed at a prior meeting. This is a great vehicle to set expectations, and plan appropriately when the team is not in crisis mode. A CEO outside of our portfolio adds a section for such a discussion related to every major inflection point for the company. It’s not a wasted effort even if things end up going right.
- Focus on the plan, not on people: I’ve observed team discussions after a setback that focus on blame when the ride gets bumpy: the CRO that did a key study, a particular function within the company, a counterparty in a deal, and so on. I’ve had better luck with all hands focusing on what’s next, down to the smallest detail – in my experience this has helped center us as a team and made us more proactive by creating certainty around the path forward. Given the power of the plan, a CEO at one clinical stage company created a graphic with an abstract of the action plan that was displayed everywhere. Part of this plan may indeed involve changes to vendors or even team members, but in the heat of the moment dwelling on this has been counterproductive in my experience.
- Realism trumps optimism: I’m a believer that everyone in this business, down to the most junior team member, stays in it with full awareness of the risk and opportunity roller coaster. Sugarcoating what’s next after a large setback either for a Board or the team rarely pays off in my experience; neither does saying nothing when something negative takes place. There is something of course to be said about balancing the message – one shouldn’t be so bleak that a manageable setback has everyone printing resumes, nor so optimistic that a mortal blow catches the team unaware. As an example, a CEO at a preclinical stage company took the step of communicating the company’s days of cash left in real time after a major Pharma partner pulled out close to the company’s cash out date. Team members (or investors for that matter) that require platitudes or can’t handle bad news likely aren’t ones you want at your side when the next setback happens.
(Briefly) Rolling up to the top – stay humble and avoid the Super Bowl phenomenon: Wins in our business are worth celebrating – an acquisition, progress in the clinic, or even a vote of confidence from your investors in a new financing round. Given the heterogeneous and often stochastic nature of success, it’s not so easy to pull out common principles (or productive in my opinion, but see below). My primary observation in these settings is that great teams stay humble after a win and don’t overplay it. This is no small task, especially as our industry often amplifies the talents of a team after a success, much like a players of a football team after winning the Super Bowl. After all, setbacks in our business are not too far off and successes in our field are often a combination of luck, skill, and nature – with an emphasis on the first of those.
2014 has been a fantastic year for our teams and for our industry more generally. I’ve never been more optimistic that great companies will continue to form and grow. I’ve also never been more certain that each of these companies will have its ups and downs – it’s all about what you do next that matters.