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Like no other business sector, biotechnology demands exceptional leaders. That is why investment in accurate, early career identification of leadership talent should be at the top of every biotech CEO’s and CHRO’s agenda. Let’s look at the unique set of factors that make this the most compelling talent issue for the biotech industry today, the challenges and benefits of identifying high potentials in your ranks, and one solution that meets both the strategic needs of the organization and the motivational needs of today’s biotech workforce.
The biotech sector is in explosive growth mode. In 2016, the global biotech industry was estimated to be worth $369 billion. By 2025, total worth is expected to grow to $727 billion. Close to my own home, the Boston biotech ecosystem is a strong case in point. The Boston-Cambridge area, with its 13 leading research centers, cutting-edge hospitals, and the influx of billions in venture capital, has created a thriving biotech incubator. Not only the larger players, but an increasing number of fast-growing small and mid-sized companies are finding themselves in harsh competition for talent—this despite the high number of world-class educational institutions nearby churning out over 15,000 STEM graduates a year.
In the past year the number of newly employed biotech workers in Massachusetts has increased by 6.4%, its largest year-over-year increase in a decade. Biotech employment in the state has swelled by 35% over those ten years. As Robert K. Coughlin, President and CEO, MassBio has noted, the industry “continues to grow and innovate at an incredible rate, creating both challenges and opportunities for companies who must fill their pipeline of talent to meet the increasing demands on their services.” Clearly, talent remains a potentially serious limiting factor to sustaining current levels of growth, not only in Massachusetts, but throughout the industry.
The biotech industry in this fourth industrial revolution is on the cusp of changing our lives in radical ways, as rapid advances in areas like therapeutics, genomics, agriculture, healthcare, nutrition, biofuels, and more are providing novel solutions to complex problems and increasing sustainability across all aspects of human life. It requires higher-level human capabilities to operate in this complex space as we accelerate toward breakthroughs enabled by sophisticated new technologies. As Deanna Petersen, CBO, AVROBIO, has written,
“Biotech is an industry that … requires people who are willing to take risks, conquer new science, and have endurance for the many years it takes to develop a new medicine. In addition, professionals who thrive in biotech have the know-how, confidence and guts to tackle business goals that are covered in uncertainty and complexity. These are ‘hard core’ leadership traits, and they are highly valued in biotech companies at all levels of job responsibilities.”
Making the most of explosive growth opportunities in this rapidly developing field will require new ways of leading. Those new ways are being discovered and developed most effectively today at lower levels of the organization. Emerging biotech leaders must exercise these skills with greater speed and flexibility, learn and relearn their disciplines as they increasingly combine science and technology, and effectively collaborate across a widening number of disciplinary fields and industry ecosystems. And they must help their teams develop and apply these skills as well. No wonder four out of 10 tech leaders are failing—the highest leadership failure rate of any industry. Clearly, the industry needs to put greater effort into accurately identifying and developing tomorrow’s leaders.
Given the fierce competition for critical skills and the complex requirements of leading effectively in biotech, the costs of losing talent are high. Developing and retaining in-house talent is the smartest investment an organization can make in these circumstances. While many organizations focus high-potential talent development solely at senior levels, those that extend development of high potentials below senior levels are 4.2 times more likely to financially outperform those that don’t. In addition, research demonstrates that the benefits of developing and promoting from within versus hiring from the outside are many, including significantly decreased costs and significantly increased productivity. Put succinctly, a wisely promoted insider will typically outperform an outside hire for at least three years, and at a substantially lesser cost (see Wharton professor Matthew Bidwell’s Paying More to Get Less: The Effects of External Hiring Versus Internal Mobility; why this study has been overlooked in my field, I’ll never know, but it presents one of the most powerful research-backed arguments for promoting internally versus hiring externally).
Most organizations lack a clear understanding or measure of leadership potential. The distinction between high performance and high potential is critical. Several studies estimate that only two or three out of ten high performers are also high potentials in terms of their readiness and ability to effectively assume a greater scope of leadership responsibilities. In addition, as recent neuroscience studies have demonstrated, managers are notoriously bad at identifying leadership potential in the ranks since their judgment is marred by a variety of hardwired evaluative biases.
While these are problems in every industry, the biotech sector adds additional layers of complexity, uncertainty, and challenge. The introduction of new technologies, agile methods, and experimental work arrangements in biotech are accelerating changes in the nature of work arguably more than in any other industry. That means that predicting the leadership skillset for future success is even more problematic. Given all these factors, it’s no wonder many biotech organizations report that they:
Accurate identification of leadership potential is difficult, but not impossible. In response to our clients’ needs, my colleagues at MDA Leadership created a validated assessment and development experience called Bench Strength. The Bench Strength Experience™ was created to help organizations identify and accelerate the development of talent for roles at the Leading Others (front-line supervisor) and Leading Leaders (manager) levels. The talent analytics allow organizations to gain critical insights into the breadth and depth of future leadership talent among individual contributors and early-career supervisors already in the organization. Insights guide differential investments in leadership talent. At the individual level, emerging leaders obtain detailed insights and feedback regarding their leadership potential and an immersive development experience to strengthen and accelerate their readiness to lead at the Leading Others and Leading Leaders levels.
The Bench Strength Experience™ is based on the results of several scientifically-validated inventories. Taken together, these tools measure an individual’s unique combination of motivators, personality characteristics, watch-out factors, and problem-solving capabilities. The assessment looks at the individual’s capabilities in three broad dimensions—practical intelligence, personal effectiveness, and aligned motives and values. It includes a measure of critical thinking, and it also targets curiosity, tolerance for ambiguity and complexity, and openness to new learning experiences—essential capabilities in the biotech sector where new digital technologies and data analytics are rapidly changing the nature and scope of work not only in the laboratory, but throughout the business.
Job satisfaction is strongly correlated with work productivity. Research studies also conclude that job satisfaction is enhanced when organizations demonstrate structural commitments to employee development and career advancement. As the editorial staff of BioSpace recently summarized it, in their review of work culture factors most attractive to top talent, “[J]ob satisfaction is closely tied to opportunities employees have for growth, advancement, learning, promotion, and expanding their skill set. Organizations with strong infrastructures that support employee growth—both in philosophy and also literally with actual resources and budgets—validate their commitment to each employee’s professional development and foster a strong sense of culture and community.”
Demonstrating this commitment is an essential component of a company’s employer value proposition (EVP) and a key both to attraction and higher retention rates. With competition for top talent intense, biotech companies must do a better job of showcasing their workforce development, career path opportunities, and high internal promotion rates. Since the desire for career advancement remains at the top of the list of reasons that employees cite for changing companies, efforts to identify and promote the right talent pay off in long-term employee commitment to the organization. Identifying and developing emerging leadership talent is an especially prudent and strategic investment, since several studies show a dip in employee satisfaction in the one-to-three-year tenure range.
Like no other business sector, biotech demands exceptional leaders. Investment in accurate, early career identification of leadership talent should be at the top of every CEO’s and CHRO’s agenda. What are you and your organization doing to strengthen your leadership bench and ensure strong future growth? I welcome hearing from you as we expand the solution set for effective talent management in the biotech industry.
Jim Laughlin serves as Vice President of Consulting, Northeast Region for MDA Leadership and is based in the Boston area. For more than 20 years, Jim has designed and implemented learning and leadership development systems for companies worldwide. He is also a sought-after executive coach with expertise in organizational communications, change, and transitions. email@example.com or LinkedIn.