When the Grass is Greener (and Smaller): Making the Move to an Earlier-Stage Company

One of the defining characteristics of the biopharma industry is the vast range of enterprises that it contains. “Biopharma company” can mean a global organization with tens of billions of dollars in revenue, a virtual start-up with 10 employees, and everything in between. A decade ago, the larger companies, with their resources and heft, set the direction of the industry. Over the last decade, however, earlier-stage ventures have come to play a much more important role in the innovation of new therapies and the shaping of biopharma’s future. Those smaller companies thus are able to present more compelling career opportunities to top-tier biopharma leaders, leading to a much more fluid exchange of talent across the industry.

The move of a senior executive from a larger organization to a smaller one can be exhilarating for both sides. The executive has the opportunity to work with cutting-edge therapeutics while the company receives a valuable injection of additional experience and credibility. But there are risks to both sides as well, primarily around the issue of cultural fit. Common wisdom holds that the fewer resources and faster pace of smaller organizations is the frequent culprit, but in fact the challenge is deeper than that. Earlier-stage companies are shrouded in more uncertainty in everything from financial viability to reporting relationships, and none of that uncertainty can be mitigated by working faster, harder or smarter. The candidate actually has to like being in those conditions and excel in the process.

When we talk with candidates considering such a move, we suggest they keep four things in mind:

Make manageable jumps. Moving from a global pharma giant to a commercial-stage biopharma with three products on the market is very different than leaving from the same pharma giant for a preclinical firm with a lead product in Phase I. Segment the industry by life cycle point and understand that the challenge of the move is proportional to the size of the jump.

Aircraft carrier or speedboat? Working at a large-cap company can provide the opportunity to bring multiple therapies to market, potentially representing billions of dollars in revenue. A leadership position at a small firm means your impact is centered on a handful of therapies—perhaps only one or two—but you are also likely to be shaping the strategic direction and culture of an organization. One experience has reach and leverage; the other is intimate and focused. Know which is more meaningful to you.

Are you ready for a fishbowl? If a position at a smaller company means having more impact on the organization, it also means more visibility and transparency—during both good times and bad. Make sure you won’t miss the protective buffer inherent in working at many large organizations.

Know your capacity for risk. This is not the same as appetite for risk, which is based on your personal inclinations. Rather, it’s imagining the worst—spending a couple of years at a firm that tanks when its lead therapy fails Phase II—and then thinking about what that will mean for your CV, your business reputation and your financial security. The consequences of failure are real; know how well you can absorb them if you need to.

Companies have their own set of concerns:

Scrutinize the entrepreneurial track record. Companies considering hiring an executive from a larger enterprise need to examine his or her entrepreneurial capacity with the same rigor applied to leadership ability and technical acumen. Notable success leading self-contained special projects or launching products in emerging markets is a start but shouldn’t be taken at face value; conversations with references should probe how challenging the conditions actually were, as well as emotional factors including how the candidate handles stress and uncertainty and the conditions under which his or her performance tends to suffer.

Have a trajectory in mind. Unless the candidate is being hired for the CEO role, it is particularly important to have a sense of where he or she will be in five years. Larger companies tend to have more clearly defined career paths than do smaller enterprises, and someone coming from a large-firm environment is used to having a clear sense of career possibilities. Failing to address this in advance will leave the company more vulnerable in the future, when the successful candidate is wooed (as he or she will be) by rival firms.

More extensive management of the transitioning process. Don’t assume that an executive from a larger company needs less guidance in transitioning to a new role because of his or her level of experience. Indeed, the opposite may be true. Large, long-established organizations often define themselves by how they do things and thus can leave a substantial cultural imprint on those who pass through. Countering this will take more than the usual orientation session; companies should consider proactive counseling and mentoring by the CEO or a board member.

In the biopharma ecology, large companies serve as an important source of talent and experience that can accelerate the progress of smaller firms. But movement from one to the other must be made with care. Even more than usual, technical qualifications are moot without a solid culture fit.

Evan Fishel

Evan Fishel is based in the Bay Area. Evan joined Catalyst Advisors after nearly 20 years at a boutique healthcare executive search firm, where he served as vice president and manager of its San Francisco office. There, he handled board, management and scientific leadership assignments for venture-backed, private and public companies across the healthcare spectrum, including biotechnology, devices, diagnostics/personalized medicine, instrumentation, genomics, and healthcare IT. Previously, Evan served as that firm’s vice president of research. Evan holds a B.A. in English from the University of Michigan.