Is there a formula for the perfect biotech or pharmaceutical executive? As a candidate to be the next CEO of Pfizer or Amgen,
it is better to have a PhD in microbiology or an MBA combined with a medical degree? Does a lifetime in the lab beat out a
decade of sales and marketing experience?
To answer these questions, Harvard Business School analyzed 20 senior executives, two from each of the top five US pharma
companies and the top five US biotechs. In most cases, those surveyed were CEOs or vice-presidents of commercial operations.
(See "Best of the Best.") To ensure a homogeneous sample with enduring industry success, the researchers chose companies that
ranked as the top five in market capitalization in either pharma or biotech from 1998 to 2003 and earned more than 50 percent
of their sales from prescription drugs. (See "Who's Who in Companies.")
In short, the analysis says Ivy League degrees aren't necessary, but international experience and at least one graduate degree
seem to help.
The Survey To best compare data, an identical questionnaire was used to interview all executives. It included the following seven questions:
- What experiences were pivotal to reaching your position in the industry?
- What experiences are most critical for other successful CEOs and senior managers in the industry?
- What experiences were most influential to your professional development?
- What are the most important characteristics a senior manager must possess in the biotech or pharma industries?
- Why do you believe you were initially selected for your position?
- How important is a scientific or technical background for senior managers and CEOs?
- What are the most successful characteristics of a CEO?
In addition, the survey's authors analyzed executives' biographies for comparisons of education, specialization, and career
path, and supplemented interview responses with excerpts from lectures the executives had given and from statements made in
the media and at Harvard Business School. To provide an external perspective, the researchers also interviewed academicians,
consultants, and investment bankers who focus on the industry.
Who's Who in Companies
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The study does have limitations. It suffers from subject bias (some subjects offered much longer interviews than others),
reporting bias (it presents selective executives' opinions rather than a synthesis of objective views), and scope limitations
(only 20 executives were targeted). And the researchers were unable to get an interview with each executive—Art Levinson,
CEO of Genentech, for instance, does not give interviews as a matter of policy. But by incorporating information from various
sources, they were able to ascertain answers to nearly every question for every executive. Despite the limitations, the results
yielded a fairly consistent picture of management trends in the biotech and pharma industries.
Comparing Resumes To find out what top leaders are made of, the survey looked at various aspects of executives' backgrounds: education, areas
of specialization, career progression, and international experience.
Education. The executives in the survey tended to be highly educated: 18 of the 20 executives held at least one graduate degree, and,
the group held an average 1.2 graduate degrees per executive. The level of education was almost identical for pharma and biotech
executives.
But the types of degrees differed between the two industry sectors. Eight of 10 pharma executives held MBAs, while only six
biotech executives had such a degree. Additionally, four of the pharma executives attended Ivy League universities, and only
two of the biotech executives did.
Biotech leaders are sometimes stereotyped as being more science focused than pharma managers, and this study substantiated
that thesis: six of the biotech executives completed undergraduate degrees, and five completed graduate degrees, in a scientific
or engineering discipline. Half of the pharma execs held undergraduate science or engineering degrees, and only three earned
graduate degrees in either of these study areas. (See "Does Science Matter?")
Areas of Specialization. Early career focus for the executives fell into four general categories: sales and/or marketing, research (or scientific),
engineering and/or consulting, and finance. The large majority in both pharma and biotech had a sales/marketing background,
and the biotech leaders were more specialized in technical areas. (See "Functional Expertise.")
Best of the Best
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Even some of the biotech executives categorized as sales and marketing were educated or trained in a scientific discipline.
For example, Kevin Sharer, CEO of Amgen, received a Bachelor in Engineering from the US Naval Academy. He was grouped as a
sales and marketing specialist, however, because his early civilian careers and managerial specialty were more commercial
than technical.
In the pharma industry, only Henry McKinnell, chairman and CEO of Pfizer, Raymond Gilmartin, chairman and CEO of Merck, and
Bradley Shears, president of US Human Health at Merck, were not classified as sales and marketing specialists. McKinnell and
Shears both hold doctoral degrees and spent time in R&D, but they soon transferred to sales or marketing roles.
The importance of a technical background to managerial success was the most hotly debated issue among executives. (See "Another
Point of View.") Those who earned graduate degrees in a scientific discipline tended to feel that their scientific training
was their most, or one of their most, pivotal experiences. For example, Dennis Fenton, an executive vice-president (EVP) at
Amgen, commented that his bench science and scientific training allowed him to think critically about key issues.
But even those who did not receive graduate training in science all clearly stated that they sought indoctrination to the
technical aspects and relied heavily on others in their companies. For example, Sharer said he took a year-and-a-half sabbatical
inside the company, read graduate level textbooks, and worked with all of the heads of R&D to get up to speed. This training
was critical he says, because "I couldn't have just walked in and been credible. But being in the company and on the board
for seven years, I picked up a number of things and became credible."
Does Science Matter?
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Pharma executives shared this sentiment. According to Donald J. Hayden, Jr., EVP and president of the Americas for Bristol-Myers
Squibb, senior executives are actually business people who have "scientific savvy with the desire to expand their scientific
knowledge base." Hayden, a government major during his undergraduate days at Harvard, added: "Pharmaceutical executives must
build a strong scientific foundation and continuously focus on translating the science into what it means in terms of our
customers' needs." Hayden's counterpart at Lilly, Gerhard Mayr, EVP of pharmaceutical operations, echoed this sentiment, while
noting that a formal degree in science was not critical for the executive track.
Jim Mullen, Biogen-Idec's CEO, articulated the concept somewhat differently. Although Mullen has a technical background, he
says, "The aptitude and the curiosity to reach in and learn new spaces is far more valuable than a formal training." He believes
that executives must be able to "lead people in areas that you are not the technical expert and do not necessarily have a
technical aptitude." He concluded, "Successful executives must be people who can integrate and be comfortable with all of
the different business and technical issues. Because hallmarks of the biopharmaceutical industry are a lack of definition
and lack of data, executives must be able to process a lot of information from a lot of different sources, including financial
as well as technical data, and create meaning."
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