This blog was written by Ankit Mahadevia, CEO of Spero Therapeutics, as part of the From The Trenches feature of LifeSciVC.
If CEOs have empowered their teams effectively, they have three roles during times of rapid change:
- Motivator in chief (Championing culture & values, ensuring the team stays true to these)
- Focuser in chief (Setting strategy and ensuring that stakeholders align around it)
- Balancer in chief: Decisions that balance benefits and costs to the enterprise using a unique, multi-disciplinary vantage point
In prior posts, we and others have shared our thoughts on the Motivator & Focuser roles (Jeb Keiper’s recent post and others from us here and here). In this and coming posts, we will explore the balancing act of difficult decisions.
Balancing complicated decisions: Growth (and crisis) demands a systematic approach
As Spero has grown from seed stage to late stage l, so have the number and complexity of multidimensional decisions; the introduction of COVID-19 has accelerated the pace and number of these decisions for a period of time. In order to preserve our ability to execute on multiple fronts over time, we’ve needed to focus less on individual decisions, and more on the system by which we make them. I credit excellent scholarship on the anatomy of decisions in helping us refine our approach (Range, Algorithms to Live by, and Farsighted are some of my favorites). We share our “ground rules” at Spero on addressing complex calls as a team.
Think fast, but take our time: Important decisions are consuming, and human nature drives us to equilibrate by deciding quickly, or by procrastinating. Decide too early, and miss an opportunity for thought, consultation, and data-gathering. Decide too late, and downstream inefficiencies in operations can pile up. Our system allows for neither; first order of play is to stake out the relevant timeframe we have before we impact downstream actions at the functional level. Second order of play is to set limits on the amount of information necessary to make a call (think 80/20 rule, or Colin Powell’s 40/70 rule – not less than 40% of what you’d like, but not more than 70%).
More opinions, one decider: This is where one’s philosophy on diversity, but more importantly, inclusion in building a team pays dividends. Significant scholarship (example here) supports the benefit of a diverse set of opinions from internal and external experts in optimizing complex decisions. However, this doesn’t mean we allow this consensus to guide the day. Ultimately, our system nominates an expert (could be the CEO, could be another team member) based on the issue and we abide by their call – for example, for program decisions, our program leaders may have decision authority. The job of the CEO in those settings is to understand the recommendation fully, guide with context and strategic insight, and ultimately be accountable for the outcome.
Learn from history, but don’t be constrained by it: Another ground rule at Spero is that we look deeply at historically similar situations to expand the set of options we consider and our view on their implications. For example, in planning ahead for our growth as a clinical organization, reviewing the scale of similar companies that had a similar intensity of activity in the past helped us develop a sound growth plan. That all said, there’s danger in assuming that all of the factors in the past remain true in the present – as such we actively pressure test our assumptions accordingly. Sometimes evaluating history teaches us to move in a different direction. For example, in assessing our financing needs, past precedents recommended a traditional equity raise, though we decided to pursue a fully backstopped rights offering given the shareholder friendly structure with fewer fees and greater certainty.
Delegate to build our bench: Wherever possible we try to enable the consideration of tough calls more broadly in the organization. Our philosophy is that those closest to the data driving a decision should have the most authority. For example, we’ve written before about the concept of a Strategic Leadership Team (here) where we’ve worked to delegate non time-critical, but important multi-dimensional considerations. Further, we’ve sought to build underneath our C-team with teammates who demonstrate a willingness and aptitude to build the comfort to make complex calls (and our process helps them develop). This is the key for our ability to maintain operational stability and a forward-looking view as we grow.
Addressing the fallout of a black swan event like COVID-19 has highlighted the value of our systematic approach, and the value of being fortunate to have built a system and a team that’s wired for complexity at multiple levels.