Archives for September 2020

The Life Sciences & Healthcare industry is at a fantastic period with unprecedented improvement of health thanks to innovation.

Products are developed under market forces. But as the Covid-19 pandemic demonstrates, when there is an urgent, public health need authorities have to intervene to ensure sufficient financing and reduce commercial risk to the companies.

Covid-19 has accelerated cooperation between the authorities and the industry at a level not seen before. A major facilitator is the Pharmaceutical Research & Manufacturer’s of America (PhRMA) which represents innovative biopharmaceutical research and discovery companies and is based in Washington.

Brian Toohey, Senior Vice President for International Advocacy of PhRMA, was the guest speaker at a recent Cornerstone International Group webinar.

“We are seeing a wonderful transformation in science,“ said Toohey. ”The industry is moving from treatments to cures with great breakthroughs in oncology and many other fields.”

PhRMA is devoted to advancing public policies in the U.S. and around the world that support innovative medical research, yield progress for patients today and provide hope for the treatments and cures of tomorrow.

Toohey identified three pillars on which innovation in Life Sciences and Healthcare depends:

1. Market access
2. Intellectual Property (IP) – the battleground for continued investment in biopharmaceutical research, and
3. Global trade

With costs of $2.8 billion to get a new medicine to market all three pillars are essential for continuing innovation, says Toohey. Also essential is the support and vision of regulatory authorities and governments as displayed in the current pandemic. Authorities have initiated policies to mitigate the risk borne by the discovery companies under the pressure to create a vaccine.

Addressing the challenge of the strong development of Market Access as a job across the whole industry, Toohey advocates first building a strong academic foundation in top universities. Pricing and assessing medicines are a science, he says, and education should be thorough. Then candidates should join companies and probably enter product development groups, in order to get the business discipline.

For more information on Cornerstone’s Life Sciences and Healthcare group, contact eric-bouteiller@cornerstone-group.com

Second in a series by Steve Manning – Head of Financial Services / PE and Family Office Search Practice – Asia, Cornerstone Singapore

You’re not happy with your current CxO level management team. You are finding out your investment is a tangled web of interrelated human wheels and cogs. Managing people is complex and hiring Private Equity leaders entails heavy lifting from a soft skill standpoint.

Adding a new CxO will potentially create instability in a firm that has relied on perhaps generations of insiders or, in the case of a newer start up, a mercurial leader to harness the company. Perhaps your confidence in management rejuvenation is even waning after all the politics, personalities, and history rear their ugly heads.

Having determined that new talent is essential there are significant calls to make in your endeavour to locate and secure them.

1. Confidence to Compromise on Ideals.

First and foremost do you have core characteristics of the ideal profile nailed down?  It is complex to transpose ideals onto a bullet list. It is not sufficient to transcribe that the CEO ‘must be a leader’.

While drawing up a no-compromise competence check list, take a look at the basics for your private equity sector.  Focus on a handful of core demands specific to portfolio companies and aligned to soft skill talents.

2. Soft Skills

Having dispensed with hygienic hard skill credentials in part one, arguably the most critical focus area is soft skills.  Jeffrey Cohn and J.P Flaum surveyed and interviewed the managing partners of 32 private equity firms (including Blackstone, Carlyle, KKR, and Silver Lake) about their CEO search process and how it has changed over time.

“Among the surprises: executives said they’ve learned to pay less attention to attributes such as track record and experience, the criteria typically most prized by recruiters, and to give more weight to softer skills”. HBR June 2016

There are essential soft skill sets more pertinent to managing a portfolio company.  A number may only surface through deep-dive personality assessments which will require intuition and evaluations supported by your search partner.

 

Leadership Presence
The prospective CxO will have leadership presence, which is admittedly hard to quantify, but immediately apparent.  For example, when you talk with a candidate, do they have that special sparkle and intensity that sets them apart in charisma and thought leadership?   You may even find it difficult keep up with their conversation, they’re so quick and lucid. The profile does not require a confident extrovert, but it is a trait required to harness a portfolio organisation and inspire confidence.

‘Presence’ in the leader will encourage and support other talents to transform an existing workforce.  Finding this is a style and culture assessment where your search consultant’s instinct and evaluation processes will help greatly.

Manage active investors
Effective executives will be able to work with an active owner. You want candidates to show an aptitude to working with an investor lead, and quite possibly a multitude of overseers.  Investors are tremendously experienced in their respective business sector with strong customer and business contacts and financial expertise on getting the best out of the company.   Having led a multibillion dollar division in a large structured conglomerate may not provide the best experience for a candidate who will work with a highly active and knowledgeable, ‘in your face’ owner.

Equally, prospective chemistry between the CxO and a deal owner requires exploration.  Both  are out in the top right corner and likely to be opinionated and not lacking in ego,.  This takes some probing on respect, communications style, vocabulary, language and shared values.  It also relies heavily on your search consultant’s instinct to mitigate bias in the assessment of compatibility.  To do this the search partner will also require a careful assessment of the deal owner’s own personality.

People Assessment
People assessment sits near the top of required skill set priorities for a new executive.  Senior leaders have very likely experienced a number of regular global re-organisations within a multinational.  But did they tackle change in a small- or medium-sized enterprise, possibly where staff have 20 or 30 years tenure, and one or two key individuals carry the weight of the company?

Assessment skills are required in abundance while moving a company through transformation and growth.  Imagine a private equity company investor commenting “are you sure Joe is up to the task, he seems to me to be very quiet”?   Confidence and surety in evaluation is a must.

Complex decision making
A mental aptitude to multi-task, competing priorities and the ability to make decisions rapidly are essential.  The 80:20 leader will thrive rather than a big business planner.  Similarly, the candidate must possess clarity in the face of multiple demands and toughness to recover from inevitable setbacks.

What happened when the candidate was up to his or her neck in a swamp? How have they behaved in the past while extricating their business from downturns? Ultimately, the candidate will be a decision maker, and have proven most decisions were correct.

Co-existing chemistry
With a tightly supervised portfolio firm, the CxO will have a capacity to provide and be comfortable with a more open-book approach with the board as well as having confidence in being able to share the bad news, as well as the good.   This will include a temperament to field calls frequently, and not take criticism or negativity personally.

The CxO who feels tasks are his or her their own responsibility and is prepared to say “let me get on with my job”, will have demonstrated the equanimity to handle investor involvement.

Contentious issues
In a similar vein, ideal prospects will show a resilience to handle contentious issues, knowing how to achieve balance between taking orders and operating in a vacuum.  All leaders are prepared to be challenged, but private equity company investors are very shrewd and will see though smoke and mirrors.  Bluster and generalities won’t pass muster.

Well-placed questions on soft skills will quickly surface vulnerability pointers.  CEO level managers usually don’t hide their personality, preferring to be clear about their views, and the way they work.  Evaluations take time to unearth compatible candidates, and assessment will likely go beyond typical competency match interviews.

In Part Three we will look at the motivation and interest level of the candidate to lead your portfolio company.

 

Steve Manning is a search director, and is Head of Asia Financial Services / PE and Family Office Practice at Cornerstone International Group based in Singapore. www.linkedin.com/in/jstevenmanning

Many people may not be familiar with the term Intercultural Intelligence, but in a world of global business where crossing boundaries is routine, it has become a vitally important aptitude and skill.

Cultural intelligence allows a person of one background, or culture (say, a Swede) to interpret the unfamiliar mannerisms of someone from another culture (say, an Italian) in the way fellow Italians would. A high ICQ (Intercultural Quotient) is essential for any business professional working in an international or cross-cultural setting.

But Intercultural Intelligences goes beyond purely geographical criteria. Companies have cultures which are often very distinctive; a person joining a new company spends the first few weeks deciphering its cultural code. Within any large company there are sparring subcultures as well; for “trivial” and well-known examples: the sales force versus the engineers or researchers, and the marketing managers versus regulatory people.

Covid Contribution

The current Covid crisis gives us new examples, upsetting classic communication codes in digital and virtual and altering behavior with masking. At the moment, we are all learning some new intercultural aspects:

• because Covid means accepting new cultures;
• because interculturality means understanding cultural differences.

Intercultural intelligence is related to emotional intelligence, but it picks up where emotional intelligence leaves off.
A person with high emotional intelligence grasps what makes us human and at the same time what makes each of us different from one another. A person with high intercultural intelligence is able to tease out of a person’s or group’s behavior:

• those features that would be true of all people and all groups,
• those peculiar to this person or this group

The vast realm that lies between those two poles is “culture”.

InterCultural Intelligence is Critical

InterCultural Intelligence, then, can be seen to be critical in any organization operating in different cultures or composed of widely differing cultural components. Fortunately, it can be evaluated and, where lacking, can be acquired.

It’s interesting to note that sometimes, people who are somewhat detached from their own culture can more easily adopt the mores and even the body language of an unfamiliar host. They are used to being observers and making a conscious effort to fit in. Why is it that some people act appropriately and effectively in new cultures or among people with unfamiliar backgrounds while others flounder?

Our experience at Peak Lifecycles HR, the member firm of the Cornerstone International Group in Paris, suggests that the answer doesn’t lie in tacit knowledge or in emotional or social intelligence. A person with high ICQ, whether cultivated or innate, can understand and master such situations, persevere, and do the right thing when needed.

The Intercultural Quotient is associated with individual decision making, task performance, global leadership success, job performance, multicultural team performance, and firm-level strategic decisions such as offshore outsourcing, for example.

Essential Attribute

ICQ is, therefore, an essential attribute among business professionals affecting the competitiveness of their businesses, industries, and countries.

Not surprisingly, assessing the ICQ of an executive level candidate has become a highly important component of the recruiting process. “Intercultural Competence” is of paramount importance for success in today’s global business environments.

Assessing the degree of intercultural Intelligence is a necessity for recruitment, development, and retention, resulting in experience, competencies and certifications in suitable tools for measurement. It is a critical measurement in the predictive success of recruiting for any position where candidates will have to deal with their ability to manage such differences.

To learn more about Cornerstone’s assessment services in relation to Intercultural Intelligence, please contact the author. Contact data below.

5 Learnings from 2 Global Leaders on Re-Inventing Your Firm for an Evolving Normal

“2020 has been a fascinating year with what COVID is bringing to the table. We are focusing our efforts in three big buckets. The first and most important one is to keep our associates safe. The second one is to keep our business running.  And our third priority is to accelerate the reinvention of Mars Wrigley”

That’s Blas Maquivar speaking.  He was one of two world leaders to join Cornerstone Chairman Simon Wan recently in a webinar discussing Global Leadership Perspectives in an Evolving Normal.

Blas is president of Global Emerging Markets, one of four geographic leaderships in Mars Wrigley, a family-owned multinational doing $37 billion a year in confectionery and  food products. He’s based in London.

The second speaker, Daniel Gamba, is located in New York. He is the co-head of fundamental equities at BlackRock, the world’s largest investment manager.

Two heavy hitters. And one of the key take-aways from an exceptional exchange  was not just the fact of change, but the Speed and the enormous Breadth of the changes brought in during 2020.

Learning #1 – Engaging employees

“The priority on our associates, or employees, is fundamental,” says Maquivar. “Our number one challenge as leaders is to engage our associates, to keep them energized, to keep them motivated, to build their resilience.  And it’s not just about physical health, but also emotional health.”

With the right associates and the right brands, other priorities fall into place – keeping the business running and accelerating the reinvention of the firm.

Acceleration at BlackRock also has a human focus on talent development, incorporating not only traditional learning but skillsets in technology and data sciences.

“We still recruit in the top Ivy League schools, but we also go to a much broader number,” says BlackRock’s Gamba.  “We hire about 500 people from over 200 schools globally, looking for diversity.

And not just in technology and skillsets but also age. We have to build a bench of talent who can represent the next generation.”

Learning #2 – The Digital Default

Mars Wrigley has over 50 global brands in the marketplace. Being in business over 100 years would indicate a solid understanding of consumer habits.  Today, to remain a leader even two more years calls for prompt understanding of the dramatic change in those habits.

We need to be agile, courageous and take risks. Like everyone else, we have limited resources. We have to get this right.”

The single most disruptive development is the “digital default” — making services so easy to access online that it becomes the natural place for people to go to.  Another macro shift is a back-to-nature and close-to-home preference associated with the environmental awakening.

“We really need to be best in class first on understanding these consumer changes,” says Maquivar, “and they are happening fast.  Something that was going to happen in five years probably will happen in a year and a half.”

Learning #3 – The Circular Economy

BlackRock has a unique world overview, with professionals practically carpeting the planet. According to Gamba, the firm is in contact with between 5,000 and 10,000 clients every week.

As an investment manager for $7.4 trillion of other people’s money, being not just on top but ahead of trends is everything. Today’s focus is on the circular economy and sustainability.

Our CEO made a big statement in January about sustainability and how sustainability and sustainable-driven companies are going to actually outperform the market. We are seeing acceleration of that.”

“We’ve seen tremendous success on sustainable related solutions,” continues Gamba. “Companies that invest in circular economy or are really aligned to the UN sustainable development goals are outperforming companies who haven’t really evolved into the new clean energy world.”

Learning #4 –“There’s no rest at the top”

If you are a Formula One racing fan, you are resigned to seeing Mercedes driver Lewis Hamilton quickly build up a lead from the start, then be able to ease off to stay there.

Not so much in Daniel Gamba’s world.

“Being a leader is actually the task of remaining a leader,” he says.“It’s always easier to be #2 or #3 because you can just watch and copy #1.”

BlackRock stays ahead in several ways, one of the most important being diversity and leadership training.

“We create a lot of internships so our younger colleagues can have several different experiences both in skills and geographies.”

The secret is to view the Covid disruption as an opportunity to re-invent your business.”

Learning #5 – Finding the Balance

Both of the webinar speakers believe implicitly that success is determined by talent. Daniel Gamba interprets his priority in 2020 as “keeping our talent safe, healthy and able to operate despite the pandemic.”

We’ve gone very rapidly from about 35 offices globally to 66,000 “offices” where our people are now working”

Maquivar, too, obsesses about his people.

“The associate angle is in my mind every day. While digital and online are now a part of our DNA, we miss the human connection. There is a lot of creativity and spark achieved through physical human connection. The tricky part in the future is how do we find the right balance, so we don’t go back into the past but still acknowledge the need for human connection.

“I don’t think we have the answer yet. And it’s going to be very, very important that we crack the code and find the right balance on that physical and digital connection amongst us.”

You can view the full discussion on video here. 

Replay this topical exchange in full

In times of great ambiguity, leaders of global organizations require long-term vision, purpose, determination, and adaptability.

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Managing change is one of the new skillsets for the future, say executive leaders on two continents.

Daniel Gamba of New York, Co-Head of Fundamental Equities at BlackRock, and Blas Maquivar, President of Global Emerging Markets with Mars Wrigley in London, addressed how global leadership is adjusting to a new “normal” that is still evolving.

They spoke to business leaders in 45 countries on a Cornerstone webinar moderated by Chairman Simon Wan.

“We won’t be going back to pre-Covid,” says Gamba. “Something else will emerge, and bring new opportunities. We must be ready for it.”
Speaking from London, Maquivar also sees change as inevitable and personal.

“We still need human connection, but the balance has changed,” he says. ”I don’t think we have found that answer yet. But it’s going to be very, very important that we crack the code and find the right balance on that physical and digital connection amongst us.’’

You can view the whole discussion here.