The biotech industry is suffering from a serious talent shortage, with start-ups in particular having an increasingly hard time filling C-level positions. Yet despite this difficulty, many job searches are failing to look beyond the industry’s stereotypical candidate, throwing their hands up in despair when the typical white middle-aged man can’t be found to fill the role. In broadening the search to include more diverse candidates – including women and people with different ethnic backgrounds – we will not only help to address the talent shortage but also strengthen the start-ups themselves. So how can a company build and maintain a more diverse management team?
Early-stage Venture Capital investors such a V-Bio Ventures work hard to identify academic innovations and transform them into successful companies, to generate a return on investment but also to create products that can deliver value to society. In the process, investors like us are spend a substantial amount of time engaging with the dedicated management teams that are essential to the success of these start-ups.
At recent networking events we’ve attended, many of the event sessions have been dedicated to the questions: how do we find new management teams, and how do we accelerate the transition of talent out of academia? Currently, there are simply not enough serial entrepreneurs to fill the C-level suites of all the new start-up companies. This issue is however exacerbated by the tendency to restrict searches (consciously or not) to the typical ‘middle-aged white man with previous CEO experience’.
“Not only do we need to broaden the search for talent, but we also have to ensure that these diverse leaders are retained in the industry.” – Christina Takke
We argue that this approach is insufficient as it excludes many great candidates from the talent pool, both by insisting on previous management experience and by limiting the diversity of the next generation of management teams. Not only do we need to broaden the search for talent, but we also have to ensure that these diverse leaders are retained in the industry.
Awareness of the issue
Awareness of the gender gap is now widespread in the biotech industry. To address the issue, some companies are completing placement programs to actively recruit women to boards. Mentoring programs have also been established, and efforts have been launched to track female progression within companies. But to compose the best possible management teams, diversity needs to go beyond gender balance – we need to accelerate the inclusion of all forms of diversity in the biotech industry, for example improving the inclusion of ethnic and LGBTQ+ representation.
We’ve made a good start: on the 6th of August 2021, the Nasdaq Stock Market’s ‘Board Diversity Rule’ was approved by the U.S. Securities and Exchange Commission (SEC). The rule requires companies to have at least two diverse directors on their Board – including a self-identified woman and someone who self-identifies as an underrepresented minority or as LGBTQ+ – or explain why they do not have such representation. Nasdaq’s initiative is bold, was long overdue, and will hopefully serve as inspiration for Boardrooms and companies in both the U.S. and abroad.
“To compose the best possible management teams, diversity needs to go beyond gender balance – we need to accelerate the inclusion of all forms of diversity in the biotech industry.” – Christina Takke
How to tackle the challenge?
Policies like the Nasdaq rule create awareness but change also needs to be implemented. So how do we broaden the talent pool beyond the limitations of the current, rather non-diverse, biotech industry network?
Ask the right people!
There is a relatively simple way to tackle this problem: by asking around. We often hear people lamenting how they “couldn’t find the right person for the job”. But did they consult the right sources? If we’re looking for women to join our teams, then we should be asking other women for their networks. If we are looking for ethnic diversity, we need ask the people in our industry from various cultures and backgrounds for their recommendations. By tapping into the diversity that does already exist, we can help to broaden it.
Make sure they want to stay!
Once an individual is found and recruited, the next challenge arises: retention. If a person isn’t made to feel like they’re an intrinsic and welcome part of the team, their enthusiasm for the job will quickly evaporate. To form a connection (and to benefit from a person’s unique perspective), it’s essential that the other team members display a genuine interest in them and make time for quality conversation. In this context, it’s not a prerequisite to already have similarities such as common interests or shared histories. What matters is the willingness to engage in a dialogue with the new team member – unbiased interest and the ability to listen will make all the difference.
Why inclusivity is key
Feeling included in a group is an immensely important factor for wellbeing and performance. To understand why, we can turn to the writings of Eveline Crone, Professor for neurocognitive psychology at the Universities of Leiden and Amsterdam. Her research group is studying brain development during adolescence, comparing their findings with the adult brain.
An interesting chapter of Crone’s book ‘The Adolescent Brain’ is dedicated to the brain’s response to social exclusion. In it, she references the research of psychologist Kipling Williams, Professor of Psychology in the Department of Psychological Sciences at Purdue University, who created a computer game called ‘Cyberball’ to study the psychological consequences of ostracism. By measuring the brain functions of individuals playing games that mimic social exclusion scenarios, it was revealed that the brain areas reacting to rejection stimuli are the same as those detecting physical pain (the anterior insular and anterior cingulate cortex). In other words: the brain responds to social exclusion in a similar way to physical pain.
“It is essential – not only for the wellbeing of the individual but also for the company – that every team member is made to feel included, with both their similarities and their differences celebrated.” – Christina Takke
In the adult brain, this sensation of pain can be dampened by the rational prefrontal cortex, a region of the brain that is still under development in adolescents. This means that, generally speaking, adults are better able to cope with social exclusion than adolescents. But even in adults, the pain of rejection cannot be neglected altogether. If not dealt with it properly, this sensation can lead to burnouts, depression, and low self-esteem, resulting in underperformance or even resignation of the excluded team member. Therefore it is essential – not only for the wellbeing of the individual but also for the company – that every team member is made to feel included, with both their similarities and their differences celebrated.
Good sense for both people and business
To establish and maintain a diverse workforce in biotech, we not only need to find diverse and new talent by searching differently, but we also need to make a serious effort to create an inclusive environment in order to retain them. If we don’t achieve this, many brilliant new ideas will lack the management and guidance needed to drive these inventions to success. What’s more: evidence is mounting that diversity in management teams, boards, and investment funds is not only morally superior – it also results in improved company success!
While more work needs to be done, many of our companies are already actively trying to tackle this challenge. We at V-Bio Ventures will continue to push for increased diversity in management teams, because we know that it not only ‘levels the playing field’: it also makes good business sense and helps organizations grow and prosper.
