How Scientist/Founders Lead Successful

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How Scientist/Founders Lead Successful HOW SCIENTIST/FOUNDERS LEAD SUCCESSFUL BIOPHARMACEUTICAL ORGANIZATIONS: A STUDY OF THREE COMPANIES Lynn Johnson Langer A DISSERTATION Submitted to the Ph.D. in Leadership & Change Program of Antioch University in partial fulfillment of the requirements for the degree of Doctor of Philosophy May, 2008 This is to certify that the dissertation entitled: HOW SCIENTIST/FOUNDERS LEAD SUCCESSFUL BIOPHARMACEUTICAL ORGANIZATIONS: A STUDY OF THREE COMPANIES prepared by Lynn Johnson Langer is approved in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Leadership & Change. Approved by: ______________________________________________________________________ Alan E. Guskin, Ph.D., Chair date ______________________________________________________________________ Jon Wergin, Ph.D., Committee Member date ______________________________________________________________________ Mitch Kusy, Ph.D., Committee Member date ______________________________________________________________________ Alice Sapienza, DBA, External Reader date Copyright 2008 Lynn Johnson Langer All rights reserved Acknowledgements I arrive at this place in my journey to becoming a scholar supported in love and friendship by so many people. I must thank first and foremost my husband, Eric Langer, who has supported me in many ways, but particularly with my education. I thank my daughter, Julia Annemarie, my study partner. We shout across the hall to each other, complaining and laughing about all the work. I thank her for her support and the opportunity to be a role model. She never once complained about the plays and events I missed because I was away at a residency. I thank my son, Adam and his wife, Megan who through their lives, remind me to follow my dreams. I thank my son, Benjamin, who shows me that through hard work, we can accomplish great things. Thank you to my daughter-in-law Laura and my granddaughter Jane Indigo for reminding me of what is important in life. I thank my father, Virgil Johnson, Ph.D., who taught me I can be whatever I want and you are never too old to get a Ph.D. I thank my mother, Frances Johnson, a genius in understanding other’s perspectives. I thank my grandmother, Opal Harper Johnson, for whom education was everything. I hope I make her proud. I thank Al Guskin, Ph.D., my chair, whom I trust completely and with whom it is an honor to work and learn. I thank Jon Wergin, Ph.D., my advisor, who listened to all my ideas and reminded me that I wasn’t off-course, but exploring the road. I thank Kirsty Gharavi, my friend, who listened and offered valuable comments. I truly thank Dr. Patricia Wolf, my editor and friend. She blazed the trail to becoming a scholar and she has held my hand for the entire trip. i Abstract The purpose of this study was to determine how the leadership of scientist/founders of biopharmaceutical companies affects the success of their organization. Over half of all biotechnology firms are founded by scientists, yet for every start-up biotech firm that succeeds, 15-20 fail and eight out of 10 drugs fail in clinical trials (Federal Reserve Bank of Dallas, 2007; Stanford Graduate School of Business, n.d.; Zhang & Patel, 2005). To bring a biopharmaceutical product from the research bench to the consumer costs more than $800 million (Tufts, 2007). This dissertation research explored the leadership practices of three successful scientist/founders and how their practices form the organizational context that leads to success. Based on the results of this study, there are a number of important factors that lead to success. The most important factor is that the leader must be adaptable and able to lead effectively in a highly dynamic environment. The leader needs to consistently articulate his or her vision throughout the organization. The leader needs to be a strategic decision-maker and be flexible enough to allow the strategic vision to adjust to the culture and the environment. The leader needs to be able to communicate effectively and create an organization where communication flows efficiently at all levels. The leader needs to recognize that clear cultural differences exist between functional groups. The leader must not give in to the common temptation among both scientists and business people to downplay the importance of these differences. Finally, organizational leaders need to empower their employees at all levels to make strategic decisions; but at the same time, the leader needs to know which decisions must be retained as his or her sole responsibility. The paradoxical nature of leading biopharmaceutical organizations in the 21st century requires leaders who are able to adapt their style and create learning organizations. The electronic version of this dissertation is at OhioLink ETD Center, www.ohiolink.edu/etd. ii TABLE OF CONTENTS Acknowledgements i Abstract ii TABLE OF CONTENTS iii Chapter I: Introduction 1 Overview 1 The Drug Development Process 3 Preclinical Phase 3 Clinical Studies 4 Phase 1 clinical trials 4 Phase 2 clinical trials 5 Phase 3 clinical trials 5 Economics of the Biopharmaceutical Industry 5 Moving Science Out of the Laboratory 7 Conclusion 9 Chapter II: Literature Review 12 Introduction 12 General Leadership Practices and Strategies 13 Vision and Values 14 Learning Organizations and Adapting to Challenges 16 Communication 19 Positive Systems Culture 20 Follower’s Responsibilities 20 Small Wins 21 Organization Phase 22 Figure 2.1 Greiner’s Stages of Growth and Crisis 24 Leading R&D Scientists 27 Supervisory practice 29 Performance 31 Autonomy, Creativity, and Innovation 32 Mumford’s Propositions 33 Summary 34 Moving Ideas: Research Bench to Consumer 36 Communication, Networking, and the Transfer of Knowledge 38 Elements of Leadership and a Culture of Success 43 Culture of Research versus Practice 45 Summary of Findings 46 Success and Failure in Drug Development 48 Stages of Drug Research and Development 49 Identify target 49 Lead identification 49 Pre-clinical trials 49 Clinical trials 50 USFDA approval, marketing and sales of the drug. 50 iii Examples of Success and Failure 51 Genentech 51 Amgen 52 Genzyme 53 Failure 54 High burn rate 55 Lack of demand 55 Failure in clinical trials 56 Strategies to prevent failure 56 Chapter III: Methodology 59 Purpose of the Study 59 Justification for the Use of the Case Study Method 60 Purposeful Sampling--Leaders and Organizations 61 Data Collection and Procedures 63 Coding and Analysis 65 Suggested Validation of the Accuracy of the Findings 66 Researcher bias 66 Triangulation and member checking 67 Thick description 67 Audit trails 67 Limitations of the Study 67 Ethics 68 Chapter IV: Results 70 Introduction 70 Company A, Growing Pains 71 Introduction 71 Biographies of interviewees 72 Researcher experience 74 Key themes from interviews 77 Decision Making 77 CEO and decision making 77 Decision-making process 79 Decision making and leadership traits for company success 83 Leadership 84 Role of the leader 84 Visible leader 84 Gender issues 84 Leadership traits 85 Conflict 86 Science and business conflict 86 Organization conflict 89 Power 90 Change 91 Success and Failure 94 Greater good 94 How to succeed 95 iv Is company a going to be successful? 96 Reasons for failure 96 Personal failings 97 Failure and strategies 98 Vision 98 Goals 99 Communication 101 Culture 103 Transition to hierarchy 103 Collegial culture 104 Process 105 Need for processes 105 Task versus process 105 Management training process needed 106 Risk 106 Summary of Findings 107 Company B, Sustained Success 107 Introduction 107 Biographies of Interviewees 109 Researcher Experience 110 Key Themes from Interviews 114 How to succeed 115 Entrepreneurial spirit 116 Right team 117 Decision making 117 Culture/networking 118 Contingency plans 119 Interaction 119 Science-business interaction 121 Decision making 121 Leadership 124 Failure 125 Change 127 People don’t change, but education helps 128 Not everyone is cut out to be a manager 129 Industry changing 129 Surviving change 130 Risk 130 No risk when it comes to safety 130 Prudent risk 131 Organizational processes 132 Vision, mission, and goals 132 Transparency 133 Conflict 134 Summary of Findings 134 Company C, Racing For Prevention 135 v Introduction 135 What is a PDP? 135 Biographies of Interviewees 136 Researcher Experience 137 Key Themes from Interviews 140 Leadership 141 Mission orientation at non-profit 145 Science business interaction; speed versus quality 146 Teams 148 Challenges 149 Communication 151 Risk 154 Success 156 Possibility of failure 158 Summary of Findings 159 Consultant Interviews 159 Consultant 1 159 Sustained leadership requires effort 160 What leaders need to learn 161 Transitions and career anchors 161 What makes scientist/founders successful? 162 What advice would you give? 162 Consultant 1 summary 163 Consultant 2 164 What does success mean? 164 Many leaders don’t stay the distance 165 Passion versus control. 166 VC support 168 What VCs look for 168 Examples of success 169 Traits of a successful scientist/founder leader 170 Transitions of leadership 171 Tension between science and business 172 Consultant 2 summary 172 Consultant 3 173 Different definitions of success 174 Transitions 174 Science business interaction 176 Ego and investors 177 Consultant 3 summary 179 Chapter V: Discussion 181 Introduction 181 Summary of Findings 181 Company A 181 Company B 184 Company C 186 vi Consultants 188 Requirements for Achieving Success 189 The Nature of Leadership Styles at Biopharmaceutical Organizations 190 Communication 194 Employee Development 195 Conclusion 196 A Final Thought: Special Challenges Facing Biopharmaceutical Leaders 198 Limitations of Research 201 APPENDIX 202 Appendix A 203 Table 1 Leadership Strategies 203 Appendix B: Interview Template 204 Appendix C: Participant Consent 205 References 207 vii 1 Chapter I: Introduction Overview Biotechnology is a relatively young industry that has evolved rapidly since its commercial beginnings in the early 1970s. Since then, it has developed into a multibillion dollar industry with many successful products that have contributed to society with new biopharmaceuticals, food, and energy products and processes.
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