NEW YORK, Nov. 13 /PRNewswire/ -- A new study released today finds a significant number of biotechnology firms receive failing grades when it comes to the challenges of growth and change facing the industry today. The study, Biotech Management Practices 2003, from Mardis, Aibel & Associates, a biotechnology management consulting firm, provides the first comprehensive assessment of management practices in the biotech industry based on a detailed review of the organization and operations of various-sized firms. The pioneering study surveyed 175 executives in almost 60 companies, supplementing their responses with in-depth interviews with a variety of outside experts.
The study confirms that almost two-thirds of North American biotech companies are moving into a managerially and operationally turbulent phase, as they transition from start-ups largely driven by science to companies facing the challenges of clinical research and commercialization. Yet Mardis, Aibel concludes that only about 15% of these firms have the operational “excellence” to effectively manage this transitional period. How does that happen? The survey found that while CEOs report that managing transitions is one of their top four priorities, these same CEOs rank their performance in actually accomplishing successful transitions “dead last” on a list of 10 key activities.
“Many executives we surveyed do not recognize these issues, and even when they do, they don’t see the problems within their own companies, resulting in the emerging ‘crisis of management’ now facing the industry,” said Walter Mardis, a leading industry management consultant who co-founded Mardis, Aibel & Associates. “Executives tend to give their companies high marks on many aspects of management while investors and other outside observers often find them lacking.”
The low priority accorded to management issues is illustrated by the fact that only a small percentage of biotech executives in the study view “management excellence” as a critical success factor for the firm, with just 20% of surveyed CEOs ranking “creating and managing world class business processes” as a top strategic imperative. Consistent with these priorities, only 10% of CEOs rate their performance in building these processes and functions as “very successful.”
“Simple, informal management models that serve companies well early-on need to become more structured and disciplined as firms become larger and more complex,” said Jeffrey Abel, managing director of Mardis, Aibel & Associates. “The encouraging news is that the study finds that biotech companies pass through four discrete and identifiable stages in a common lifecycle with predictable ‘inflection points.’ Since there are effective organizational and management practices that tend to work best at each of these stages, successful companies can take action to alter the way they organize and manage their business as they progress from start-up into the clinic, and again as they commercialize their products.”
But many companies have not yet taken these actions. The study finds management practices of later stage companies often have not evolved as they grew. And within companies there is little consistency in management practice, with some key functions well-organized while others are “ad hoc, poorly defined, or seldom followed.”
“If biotechnology companies do not build an organization that can execute against all of the critical accountabilities of a multi-functional business, they will not survive,” said, Richard Pops, CEO of Alkermes, Inc. and current chairman of BIO. In an introduction to the study he adds, “We are now realizing that it takes strong, focused, well-capitalized companies that are driven to execute all of the steps needed to identify and qualify a product candidate, take it through the innumerable twists involved with clinical trials, production and then sales -- and it takes an even more focused company to do it a second and a third time.”
The study authors note that the accelerating trend for biotechnology firms to focus on rapid product development and commercialization heightens the relevance of these findings. The new model demands high performance from young companies in executing a large number of complex strategies, capabilities that according to the study few companies possess.
As Dennis Purcell, long-time biotech industry expert and managing director, Perseus Soros Biopharmaceutical Fund concludes, “This study should serve as an ongoing reference for top executives in biotech, providing insights and best practices that they can use to improve their operational effectiveness and efficiency. They will be able to see that they are not alone in facing serious management challenges as they grow and, more importantly, that other companies have found solutions to these challenges that really work.”
The study covers the following topics: * Financial Planning and Management Practices * Organizing and Managing Research and Discovery * Organizing and Managing Clinical Development * Making Transitions Work * Managing Human Resources * Organizational Design and Staffing Practices * Managing Information Technology * Outsourcing * Communication and Public Relations Practices * Effectively Managing Risk
The study, “Biotech Management Practices 2003,” is available through http://www.mardisaibel.com/ or from Windhover Publications, co-sponsor of the study.
About Mardis, Aibel & Associates
Mardis, Aibel & Associates, LLC is a consulting firm focused exclusively on helping biotechnology companies address the organizational, operational, and/or managerial challenges associated with growth, using pragmatic approaches to help senior management execute corporate strategies and meet or exceed corporate goals and objectives. Mardis, Aibel’s principals have years of experience in helping growing companies succeed. The firm’s areas of practice include organization analysis and design; business process engineering / reengineering; cost reduction and resource rationalization; and leadership coaching, including assistance for such major transition events as product commercialization, merger and acquisition integration, enterprise globalization, and completing an IPO. Mardis, Aibel & Associates maintains its headquarters in New York City and has associates in major biopharmaceutical locations around the world.
Contacts: Walter Mardis Media: Stephen Gendel Mardis, Aibel & Associates GendeLLindheim BioCom Partners 212 901-6959 212 918-4650
Mardis, Aibel & Associates, LLC
CONTACT: Walter Mardis, Mardis, Aibel & Associates, LLC,+1-212-901-6959, or Stephen Gendel of GendeLLindheim BioCom Partners,+1-212-918-4650
Web site: http://www.mardisaibel.com/