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European Biotech CEOs Navigate Towards a “New Normal” Pt 1

Highlights from the third round of digital gatherings with European Biotech CEOs, hosted by Egon Zehnder

  • June 2020

Biotech leaders are managing the return to onsite work post lockdown, while increasing the spotlight on leadership communication, and meeting expectations of how biotechs should operate in the aftermath of the COVID-19 pandemic, they revealed to Egon Zehnder in digital gatherings in May.

Returning to on-site work requires changes in both the physical setup and leadership approach. Increases in flexibility for staff are here to stay

  • Leaders are working out the most appropriate way to return to offices, labs and manufacturing sites. Differences in employees’ personal situation, the physical properties of the working space, and variability in different countries’ government approach, means there is no one-size-fits-all approach.

  • Staff welfare remains a paramount concern. Leaders feel that many staff are eager to return to in person work where possible, but others are grateful for the ability to work remotely, and apprehensive or indeed unable to commute due to current guidance.

  • With less face-to-face time with staff, leaders have to actively understand various staff concerns. One leader is running a survey to understand how staff feel about returning to their London office, with CEOs calling over 20 staff every day just to check in, reflecting that returning to the office is an area where they preferred to follow, rather than lead.

  • Negative beliefs about homeworking lowering productivity have been quashed in recent weeks, with most people delivering above expectations. In fact, the issue is more how to stop people overworking now that many of the daily milestones involving travel and office hours are removed. Leaders feel it will accelerate an emphasis on outcomes/output, rather than on when people are busy and how they work.

  • Despite high productivity, a number of leaders also note that finding opportunities for spontaneous interaction, and “random” creativity, among team members is critical, albeit more challenging when working remotely.

  • A number of organisations are successfully continuing lab and manufacturing work by running shift patterns and “team bubbles”, with productivity remaining surprisingly high. This flexibility and a reduction in short-term milestones are beneficial for some lab workers given current circumstances, e.g. their family situation. Leaders expect workers to maintain the positive elements of this way of working.

  • In many cases, extra investment is required to reconfigure labs to maintain social distancing; this is challenging where space is constrained and incurs additional costs.

  • Shifts in working patterns are prompting executives to review what space is required for non-lab based roles. Less space because of more home working? Or more space because of the need for more personal space and less hot desking?

  • Leaders anticipate that many changes will be permanent. While lab work requires workers to be on site, others may continue to work remotely. Leaders worry that this could give rise to a sense of “haves and have nots”, with expectations differing by role. CEOs are thinking about how to navigate this, balancing their time between staff groups, modelling desired behaviours and treating lab-based and non-lab based staff equitably.

Leaders are thinking actively about how they communicate and manage their relationships with both the board and their teams

  • According to some board directors, it’s harder to maintain their connection with all key stakeholders to effectively maintain assets, and they need to rethink how to run board meetings.

  • CEOs are reacting differently to the crisis: some have increased interaction with their boards to almost weekly; others have restricted meetings to one hour, significantly diminishing the oversight the board can realistically provide.

  • Both executives and chairs need to rethink what they require to do their jobs effectively. Given the governance restraints on chairs/boards, the premium on two-way communication is high. Executives need to find the time to have these conversations, despite operational matters.

  • It’s much better to overcommunicate with the board, says one CEO. Non-executives’ insights currently add more value than investors’. At the same time, some board directors can’t provide as much concrete value to executives based on their “lived experience”, given the unprecedented disruption to the current environment.

  • In contrast, all CEOs are increasing their interaction with staff. Communication is key to sustaining performance, say leaders. The challenge is to be sufficiently authentic and in tune with the audience. Done effectively, this could actually provide more “face time” with a senior executive than before the crisis.

  • In a business world where the boundaries between home and work have largely collapsed, it’s important for leaders to initiate activities to encourage employees to invest in themselves. One CEO says she is about to attend an online yoga session provided for staff.

Impact on trials has been dramatic, but highly variable; acceleration in the use of technology and remote approaches is anticipated

  • Late stage trials are particularly affected, with practical limitations on patient enrolment and visits effectively freezing progress. Regulatory reviews and inspections are also being impacted.

  • Some companies with assets at earlier stages can continue their clinical work, with certain markets moving faster than others e.g. one chair notes that Ph1 studies in healthy individuals are progressing in Sweden.

  • Areas that show promise in the treatment of COVID-19 are being rapidly accelerated; indeed regulators are proactively engaging with organisations with relevant technologies.

  • Patients are often currently unable to attend face-to-face meetings, and in future may be unwilling or cautious to do so. Outside of settings where face-to-face enrolment is essential, executives anticipate an increasing use of technology and further acceleration of remote identification, onboarding and monitoring. According to one, the advantage is data generation that is more reflective of patients’ “real world” experience.

  • Complementing a potential shift in patient expectations, the necessity for remote consultations in the current environment (outside of trials), and the increasing comfort of medical professionals with this, is another factor likely to accelerate the adoption of technology, which has otherwise struggled to overcome conservatism in the medical community.

  • More generally, regulatory authorities are finding new ways to respond in light of the crisis, and new levels of flexibility and communication inspire hope of a more collaborative and responsive relationship with authorities going forward. Indeed, one CEO notes that they are currently discussing their pivotal trial design with regulatory authorities.

Continuing fundraising and business development remotely requires adjustment; positive outcomes are achievable, but experiences differ.

  • Trying to secure funding in the current environment is highly dependent on individual companies’ position, their existing relationships, and funders’ positions. One participant notes that funders such as Deerfield have recently closed significant raises and need to put their cash to work, while others may be in more difficult positions, with squeezed LPs giving rise to differing expectations and attitudes to investments.

  • Many funders are reluctant to close deals without meeting face-to-face; however, this mindset is shifting as successful discussions take place and executives appreciate not spending significant time on international travel.

  • One company has just completed a $10 million deal entirely through teleconferences, notes a chair. Circumstances actually make a more global approach easier: social media is a great leveller across different countries.

  • Several participants question how to build long-term, trusting partnerships. Some observe that currently people rely on pre-existing relationships, and these might be harder to forge in an online world.

  • The consensus among CEOs is that online conferences are of low quality and no way to carry out business development. Any nuances of body language, for example, are completely absent over Zoom/WebEx.  

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