By Ankit Mahadevia, CEO of Spero Therapeutics, as part of the From The Trenches feature of LifeSciVC
2022 has brought unique challenges for growing companies. Capital markets, shifting regulatory winds and other emergent forces are driving tough decisions on programs, personnel, and strategy (see discussion on framing these decisions).
The human side of executing a tough choice is as important as the choice itself. Building consensus for a pivot is necessary, as is care for how it affects your employees and other partners. Moving too slowly wastes precious resources. Moving without consensus and empathy risks damaging your ability to deliver on your mission.
Spero recently had to make some hard choices to ensure a long runway to deliver on our mission. We share a few considerations that we hope are helpful if and when you have your own tough choices to make at the enterprise level.
Planning ahead expands your options and discipline
Getting specific well ahead of time on defining the downside and the plan forward can expand your options if and when the time comes to pivot. Examples include defining what is a win ahead of time for a key study, or the threshold of fundraising proceeds below which a shift in plan is required. This exercise can help refine your capital strategy and shape resource allocation when you still can to ensure that “Plan B” is viable if the time comes. Further, a fully thought-out downside scenario means you can execute faster, bring others along, and fill in the gaps as needed, instead of scrambling to develop a plan and execute from a blank page after the fact (more on downside planning here in my prior post).
One caution here when planning ahead – there’s a risk teams can fixate on the downside and shift from playing to win to playing not to lose. This is just as risky as not having a downside plan. It’s important to keep in mind this very human tendency and consciously pull out of catastrophic thinking if it happens. Further, limiting this planning to a focused group helps keep the broader team focused on the main goal.
After planning ahead, invest in bringing others along
A perfect plan to pivot your strategy isn’t useful if your team hasn’t bought into it. Starting with your Board and your senior team, investing time before you need your plan so that all are aligned helps immensely if you need to execute. Our team’s experience is that bringing others along requires answering 3 key questions.
- Why – what is the business justification for the pivot? Why now?
- Who – Who will be affected by this change?
- How – How does the company plan to execute the change and move forward?
One caveat is that for public companies, there are practical limits to bringing people along ahead of time. Within the company, navigating within these requirements is worth it; a major change in strategy is hard as it is, and having a team behind you is helpful both practically and spiritually. This is also true at the Board level. It’s a common misconception that discussing a downside scenario in the boardroom may convey a lack of confidence in the base plan. In fact, it’s the opposite in my experience both as a CEO and Board member. Downside planning builds confidence that the team has considered the risks of the base plan and generates thoughtful discussion that can help the company move forward. At Spero, we’ve included the “what if we’re wrong” scenario each time we update our strategic plan for the Board to facilitate these discussions and align on our actions if things don’t go as planned.
Keep your head and heart connected
As your team navigates a pivot, there’s a fine balance between the discipline to execute and the empathy to keep the impact on others in mind. We call this at Spero “keeping our head and heart connected.” We’ve all seen the strategic implications when these principles are out of balance – a company makes a necessary choice but does so without respect for affected parties, meaning that employees, investors, partners or all three push back on what the company needs to execute. Alternatively, a company shies away from a tough but necessary choice, but then suffers the consequences of inaction.
The mental agility to toggle between tough rational choices and empathetic ones requires the greatest level of maturity from a management team. In finding this balance, we used two guiding principles – whether the decision at hand has a macro effect on our objectives, and whether, if everything we did was in the newspaper, we would be comfortable with what we read about our actions on behalf of those affected. This means not shying away from the tough choices that make our organization stronger, but also taking opportunities to show empathy for those affected whenever possible.
Act quickly, mourn the change, and move forward
There is a very human tendency on the precipice of a tough decision to find reasons to delay. There are infinite ways to rationalize a delay – trying to mitigate the impact on affected employees, or holding out for one last data analysis for example. Usually, by the time a pivot comes together, it’s already past time to execute. Further, the closer a pivot comes to reality, the more the broader team can sense something’s amiss. Moving quickly means that the team can avoid prolonged uncertainty and begin the work of moving forward.
A concerted effort to look forward is important; as with any transition, incorporating the new plan will require repetition, conversation, and time. Investing time to ensure that you and your team communicate the go-forward plan consistently and clearly helps greatly with moving forward. In the intervening weeks after we made a change in strategy, we’ve accelerated the cadence of getting the team together, and used both our written communications to the team and those meetings to ensure all are clear on our goals.
This is not to say that the day after you execute a change in plan, that a team can put blinders on and leave the past completely behind. Leaving space for your colleagues to go through the stages of acceptance is important. It’s very likely stakeholders have had less time to process the what, why, and how than you have. For example, of their own accord, the Spero team set up a happy hour to check in with Sperobes affected by our pivot – it was a nice chance for the team to process the changes together and provide some closure.
In a turbulent world, adapting our plans to ensure our missions can endure is important. It can be painful, and if executed poorly, detrimental to the mission you’re trying to preserve. If done well, it can set the stage for great things in your organization’s future. Planning ahead, balancing tough, rational decisions with empathy for others, and moving quickly once it’s clear you need to can make all the difference.