So you want to become a biotech CEO
At the Second Annual Biotechnology and Pharmaceutical Conference, Dan Eramian
When I read the agenda for today and saw the emphasis on corporate strategy, it reminded me of a quote by financier Victor Palmieri, who said:
"Strategies are okayed in boardrooms that even a child would say are bound to fail.
"The problem is, there is never a child in the boardroom."
Because many of you are students and most of you will achieve boardroom status, my message to you today is simple:
What's missing in most boardrooms is a communications strategy that builds trust between the organization and its publics.
That goes double, no-triple-if you're interested in biotechnology and becoming a CEO-which I hope you are.
Now, when I mention communications to most CEOs, they say, "PR?
"Yeah, I got one of those people down the hall.
"That PR person does a great job putting out press releases on our sales reports, our annual meeting and when I promote my employees.
"I like the pictures they take, too."
No, I say,
There's more to PR:
What's your strategy for building your business's or organization's reputation?
What will keep your most important audiences-those who will decide the fate of your business by their choices-trusting you?
You see, most businesses look at their communications efforts just like a fire extinguisher.
It sits on the wall until there is a fire-then you use it, and that's almost always too late.
But you cannot promote trust by issuing hundreds of press releases.
You do not build credibility by holding press conferences.
Trust isn't generated by road shows or media tours.
A sense of integrity or trust is an elusive quality that's as much a consequence of how you do things as what you do.
Now, if you have little patience with such squishy issues as trust or credibility,…
….call to mind all the recent headlines about the Wall Street analysts and CEOs who are facing federal prosecutors.
On December 31, The Chicago Tribune ran a story entitled, "Corporate America's Tarnished Image." "From Martha Stewart to Arthur Anderson, probes, charges, arrests and convictions blemish the nation's companies."
I am sure those analysts and CEOs wish they had paid more attention to the squishy stuff.
So I challenge you, as future CEOs, to understand that you will also be the CEOs of your organization's reputation.
I looked through your fine curriculum, almost 140 courses on business strategy, financial analysis, banking, macroeconomic asset pricing, developing new products and pricing strategies.
But I saw only one or two courses that dealt with public policy.
And only one course that was about "consumer behavior."
But what about consumers' beliefs? People's feelings? …What or whom do people trust?…
Now, maybe you are wondering why am I talking about this sissy stuff in the same speech with biotechnology.
Most of it sounds like the fluff you find in corporate mission statements.
No, you say, this is not for pragmatic, hard-headed entrepreneurs of the future.
For starters, you are certain that Andrew Carnegie and Henry Bessemer never got together to discuss the ethical implications of steel.
I'm talking about it because the business of biotechnology is different from many established industries.
So much of what biotech CEOs must accomplish depends on trust.
Trust is essential for marketplace success. It must be managed just like any other corporate assest.
Even though ImClone, for example, may ultimately have a very successful drug, its stock value tanked partly because the CEO seemed untrustworthy.
People in Europe won't touch biotech food because they don't trust its safety.
Some in Congress oppose therapeutic cloning because they believe it will lead to the cloning of human beings.
By any measure, the political, regulatory and public perception issues biotech CEOs face are formidable.
They must ask investors to trust in the ultimate success of their technology, though it may take 10 years to get a drug to market.
They must ask Congress not to over-regulate so that the industry can grow.
And they must convince the public that monsters will not crawl out of their labs.
We ask for a lot of goodwill or, at least, the benefit of the doubt.
Added to your challenge is that fact that 60% of the American people can't tell you what biotech is all about.
Not a strong basis for trust, but its also a great opportunity, adventure if you will if you are willing to look beyond just the bottom line and see the communication potential here.
The first step toward building trust is to stop, look and listen-and biotechnology has become a very public issue.
Let me put this in perspective for you.
Before February 1997, biotechnology was a sleepy little industry covered in the media by a handful of science and business reporters.
I could actually go for a walk after lunch for an hour and smoke a cigar.
That all changed in February of 1997 with the announcement of a cloned sheep named Dolly.
The media announced that we had officially entered the Age of Biology.
For many editors and reporters, Dolly marked the beginning of the genetic revolution and a target-rich environment for stories good and bad.
Biotech is exactly what the media is interested in: change, conflict and controversy.
We now speak to the press 24/7.
For some people, this revolution in molecular and cell biology suggests we can re-shuffle living matter like a deck of cards, redefining life, or . . . perhaps . . . the sanctity of life.
With big-picture ethical issues like this, you attract the attention of legislators and religious leaders as well as the media.
Last year, the U.S. Senate debated a bill that would have outlawed all cloning, even what's called therapeutic cloning.
Therapeutic cloning is used only for medical research, and that research has been extremely promising.
It was the first time, as far as I know, that congressional leaders tried to put the brakes on biomedical research.
I doubt it will be the last.
Perhaps the first group in our society to raise red flags about biotechnology (or wanted to be heard if you will) were people who professed faith- religious Americans.
To some in the religious community, scientific advances can be outrageous hubris that far exceeds mankind's moral boundaries.
News paper and magazine stories entitled "Now We Have Nature's Instructions for Life" or "We Have Found the Fountain of Youth" or "Our Scientific Breakthrough Can Change Man's Destiny" cause religious and ethical leaders great discomfort.
The one consistent criticism that has been leveled at biotech researchers from some religious leaders is that we are attempting to "play God."
Now, with all the publicity about animals being cloned, we are also accused of playing "Noah."
In 1995 our industry was hit with a petition from over 200 religious leaders to the U.S. government asking for a ban on gene patents.
This growth challenged our intellectual property rights in newly developed genetic processes and materials.
There were a series of nasty exchanges in the press.
But we made an important decision. We decided stop, look and listen.
We met face to face with a dozen members of these petitioners to discuss our mutual positions-and mutual misunderstandings.
I won't say we changed each other's minds, but I, at least, came away with a clearer idea of how deeply they objected to the news headlines that our industry and scientific breakthroughs have generated.
They learned from us, however, that biotech researchers do not take a pair of tweezers, pull out people's actual genes and run down to the local patent office.
This year, BIO initiated a new series of dialogues with religious leaders from a wide cross section of faiths to discuss stem cell research.
We invited Catholics who adamantly opposed even using therapeutic cloning research, and Jewish leaders who supported it.
We brought to the table a Muslim leader, a Greek Orthodox bishop, Baptist and Methodist ministers, a Hindu scientist and others.
We discovered the powerful ethical ideas and concepts we shared in common, a desire to help mankind be better.
Scientists and businessmen need to listen to people's individual and collective ethical concerns and respect religious feelings, no matter how much they may doubt the factual bases of those beliefs.
Edmond O. Wilson in his book Consilience wrote, "Science faces-in ethics and religion-its most interesting and possibly humbling challenge . . . while religion must somehow incorporate the discoveries of science to retain credibility."
Wilson suggests that the way to ease the tension between science and religion "demands open discussion and unwavering intellectual vigor in an atmosphere of mutual respect."
BIO has made a commitment that our dialogue with religious leaders will be an ongoing program.
While many of the theologians we met with expressed support for the industry's medical research, they raised social justice questions.
These leaders noted that many people throughout the world, especially in developing nations, do not have access to biotech products or their potential therapies for diseases, which have been ignored.
They challenged BIO to work toward solutions to ensure equitable distribution of the industry's benefits.
Again, we listened-and we acted.
We established a business development meeting in Washington last month called Partnering for Global Health.
We brought together small biotech companies that had some promising research into combating developing world diseases, but not much capital, to meet with foundations that do have capital and are interested in fighting these terrible afflictions.
The meeting-co-sponsored by BIO and the Bill & Melinda Gates Foundation-was a success, both for what it achieved and for what it communicated.
The conference sought was a first step on bringing therapies, diagnostic tools and treatments to those who need them most.
To our most important target audiences-the decision makers in government, the people in biotechnology and the ultimate users of this science-this forum demonstrated that biotech scientists and those on the business end share the same goals with ethical and religious leaders and: We want the world to be better.
Today, BIO represents mostly hundreds of small businesses, each working hard to change the world and make it better.
But because we toil in the mysterious caverns of science, our daily task is to offer light and familiarity so that those who will decide the future of our enterprises will trust us.
We do that by communicating-in every way possible, and to every audience possible-to educate and inform.
That, young masters of business administration, will be a critical component of the success of your enterprises as well.
Please remember that the social and ethical implications of scientific breakthroughs cannot be ignored or separated from boardroom policies.
Biotechnology is a powerful technology that will force us to make vital decisions.
It can do much good, but it must be handled well.
Some of you, like myself, remember how nuclear technology was rushed into existence, ended a war and then proceeded to feared and almost shunned regardless of its benefits.
But if you are smart enough. . . and bold enough . . . and fearless enough to choose the industry of biotechnology to make your fortune-and to make the world better-prepare to communicate more frequently and more comprehensively than ever.
PR it may be-but its product is trust, and trust . . . builds . . . empires.
As Walter Bagehot put it, "The world is given to those whom the world can trust."