HR issues in biotech industry

HR issues in biotech industry

It has been said that 21st century belongs to biotechnology as it made profound impact in the field of health, food, agriculture and environmental protection. But there is lot more to the biotech industry than money, there is the HR factor. Anil Kumar Mishra takes us through some HR issues in the biotech industry

India’s biotechnology industry is poised to record substantial growth, perhaps even overtake the robust IT industry. After IT, biotechnology may be the next sector that the global market will identify India with. India’s biotechnology industry currently comprises 110 units in the healthcare products sector, 140 units in agriculture and about 300 units in industrial and other biotech products sector. According to Ernst & Young’s Global Biotechnology Report 2004, India is among the top 12 global biotechnology powers.

HR issues in biotechnology

Whatever the changing fortunes of the biotechnology industry are, successful management of human resources is essential. Perhaps the most valuable, but often least recognised, source of a company’s intellectual property is the staff. However, keeping those hearts and minds loyal to the cause is no easy feat.

Human resources constitute an increasingly critical function in any biotechnology company, particularly in an industry that’s in an increasing state of flux. The efforts to achieve excellence through a focus on learning, quality, teamwork, and re-engineering are driven by the way organisations treat people. It is the job of HR to achieve organisational excellence.

The manager of a biotechnology start-up faces the challenge of fostering a transition within the founding team from science-oriented to commerce-oriented thinking and action. An academic scientist’s focus is on scientific publications, intellectual brilliance, research involving tightly circumscribed projects, and science for science’s sake. A biotechnology company, however, must translate research results into revenue.

Biotech managers should be strong and sensitive at the same time. Only managers with excellent interpersonal skills will be able to handle delicate tasks like helping the company founders think commercially, training them in what to say where and when. Yet, they should be strong enough in aiding decisions, like cancelling a pet project, bringing in and integrating new employees better paid than founding staff, and introducing formal management tools such as reporting and budgeting without damaging employee relations.

Managers should combine strategic thinking with a ‘can-do’ mentality. While a company is in its early stages with few employees, a manager must assume many roles. He must act as a visionary and developing innovative business plans and ‘big-picture’ strategies. Managers are still very operational and must have a hands-on attitude.

They must be highly motivated and aware of the challenges ahead. A successful biotechnology manager must know what to expect during the early stages of a start-up and be eager to fight to overcome obstacles.

Science and managing?

In biotechnology companies around the world, scientists are often given the responsibility for people and projects without a second thought or additional training. Failures in the transition from scientists to management occur because scientists believe that adding supervision skills is simply a learn-as-you-go experience. Stan Sewitch, Founder of HRG Inc says, “Management is an entirely different career from that of the individual contributor in science.”

It is very tempting to tell scientists that there will be a mix of both science and supervision in the job. Once a supervisor has four to six reporting employees, performing laboratory functions becomes very difficult. Many supervisors find serious career discontent when their workday fills exclusively with management issues.

Jim Lewis, who teaches the course The Engineer as Manager at the Lewis Institute (Vinton, VA, USA), breaks down the required skills for technical manager into four categories: technical, organisational, conceptual and human relations. The supervisor needs to constantly stay updated, because technical obsolescence can set in quickly. After a year or two of management responsibility, a supervisor needs to spend some time getting recharged in the area of expertise.

Strong planning and organisational ability is a must for a manager. Analysing this quality is one of the best ways to determine whether a person can move from science to management. A new supervisor must become an expert in the performance planning process that requires all reporting staff to have the tools they need to do the job. If an employee is given the role of a supervisor, formal training on project management must be provided.

Today’s biopharmaceutical projects have a high degree of complexity. In order to properly utilise staff and other resources like suppliers and internal groups, a manager must be able to clearly visualise the desired goal. He or she then has to communicate this concept to others. ‘People skills’ are often communication related. The problem is that many managers think it is their employees’ responsibility to be flexible in their communication style.

As psychiatrist Ross Ashby says, “In any system of men or machines, the element in the system with the greatest flexibility in its behaviour will control the system.” Biotechnology is a high-risk, fast-moving arena that requires quite a different breed of managers for success, opines Jianming Li and William E Halal. Biotech- nology industry needs a completely different organisational structure and management philosophy in biotechnology companies.

Jianming Li and William E Halal’s model

Biotechnology is a risky business in which few companies can achieve major product breakthroughs. Indeed, the top three percent of all biotechnology companies produce 79 percent of the entire industry’s profit. The odds are against new bio-technology ventures ever becoming profitable. Thus companies must build an organisation that nurtures a large number of diverse, highly entrepreneurial efforts under one ‘roof’ to improve their chances of success.

An ideal biotech company should be constructed from several small, independent teams or research ventures, that form spontaneously around promising concepts

An ideal biotech company should be constructed from several small, independent teams, or research ventures, that form spontaneously around promising concepts. This allows the company to pursue a variety of research avenues so that the total risk is reduced and the chance of at least a few ventures succeeding is increased.

Teams should be allowed almost complete freedom to choose their goals, supporting technology, personnel, working hours, resources, and almost all other aspects of their projects, exactly the same conditions in which entrepreneurs thrive. However, because no business can indulge researchers in unproductive, drawn-out projects, teams must be held accountable for either completing specific pieces of research or developing products that are profitable.

This decentralised, dispersed system, however, must be carefully integrated into a collaborative whole if it is to be effective. Without a strong network of productive working relations, there would be little justification for keeping these individual ventures together in a single organisation.

The new biotech manager

The profile of the ideal biotechnology business model helps to define the newly emerging roles of managers. Modern managers may not make all the major decisions nor hold all control within their organisation, as managers did in the past, but their role is no less vital. Indeed, the modern manager must play several roles in the new model of a biotechnology corporation—leader, facilitator and statesperson.

As a leader, a biotechnology manager must provide the vision needed to energise the business and drive it to success. As a facilitator, the manager must co-ordinate the activities of various teams, cultivating an environment that encourages excellence. Finally, as a statesperson, he must skilfully organise the give and take of alliances that engage stakeholders for the benefit of the entire corporate community. Biotechnology straddles the worlds of science and commerce, and so biotechnology executives must reconcile the demands of these two masters by assuring the primacy of research within the context of profitability.

Many companies suffer from a serious lack of understanding on these points. Many biotechnology companies fail not because of bad science, but because their management personnel did not have the knowledge or skill to design and guide a complex research organisation effectively. First, strategic HR must partner with senior executives and managers, helping to move planning from the boardroom to the organisation. It must guide serious discussion of how the company should be organised to carry out its strategy

Secondly, strategic HR must be an employee champion, ensuring that employees feel committed to the company and are able to fully contribute, and take responsibility for training line management about the importance of high employee morale and how to achieve it. Strategic HR must also be the employees’ voice in management discussions, offer employees, opportunities for personal and professional growth and provide resources that help employees meet the demands put on them. Third, HR must be an expert in the way work is organised and executed, delivering administrative efficiency to ensure that costs are reduced while quality is maintained.

Within the HR function there are dozens of processes that can be done better, faster and cheaper. Finding and fixing those processes is part of the work, and measuring the impact of HR programs and initiatives to the bottom line is crucial.

HR must be an agent of continuous transformation, shaping a culture that improves an organisation’s capacity

Finally, strategic HR must be an agent of continuous transformation, shaping a culture that improves an organisation’s capacity for change. Change has a way of scaring people into inaction. HR’s role as a change agent is to replace resistance with resolve, planning with results and fear of change with excitement about its possibilities.

The efforts to achieve excellence through a focus on learning, quality, teamwork, and reengineering are driven by the way organisations get things done and how they treat people. These are fundamental HR issues. Therefore, achieving organisational excellence must be the work of HR.

To sum up, the roles of the Chief Executive Officer and top management team are particularly crucial for a biotechnology company.

Biotechnology companies require managers with unique qualities. The lack of solid managerial training and the associated risk of failure often have long-term consequences for the careers of research professionals.

(The author is the Head HR, Alkem Laboratories)