Why are Execs Leaving Big Pharma for Smaller Companies?
By Jordan Warshafsky, Partner, Ashton Tweed
Once executives gain their skills and experience in larger organizations, many choose to transition into leadership roles at small companies and start-ups. Sure, this might simply be a preference, but it’s a recurring theme in our CEO Leadership Series and even an experience I went through myself before joining Ashton Tweed. So, one might ask, why do so many people make this transition within the life sciences community?
Many leaders claim they were looking for a more challenging or exciting opportunity rather than feeling like a cog in the wheel. But what does that entail? Big pharma can be challenging and exciting too… Based on the words of some top executives in our industry, I’ve narrowed down the small company allure to these four aspects:
ENTREPRENEURSHIP
Almost every senior executive we’ve spoken with mentioned embracing his or her entrepreneurial spirit. For example, after 26 years at Merck & Co. Inc., Dr. Graham G. Lumsden left the pharma giant to fill the CEO position at Motif BioSciences Inc. Dr. Lumsden realized that he wanted to be in a more entrepreneurial role and environment. “I’d had enough of ‘big pharma,’ which was becoming overloaded with committees and multiple layers of decision-making, in my opinion,” he says. “That being said, there’s no way I could do what I’m doing today without having completed a diverse 26 years at Merck.”
IMPACT
Working in a large company often makes it difficult to see the big picture impact of your work. This was the case for Renold J. Capocasale, who, after working as a research scientist at J&J for 16 years, founded FlowMetric Inc. The transition to leading a small company has been gratifying for Mr. Capocasale. He claims, “Every day the decisions you make matter. The results of your decisions are easily visible, unlike when you’re working at a huge company.”
Likewise, James Caruso joined a series of small companies after working at big organizations like Bristol Myers Squibb and Novartis. “A tremendous benefit of leading a smaller specialty pharma or biotech company is that you have a much greater influence on organizational direction, the decisions made on a daily basis are meaningful,” he says. “You also have—which was important for me—much greater influence over the culture of the company.”
RESPONSIBILITY
“Having spent so many years in Big Pharma, I really wanted to work in an environment where I would be fully responsible,” says Dr. Francois Martelet, CEO of Netscientific. “In biotech, you don’t have a safety net; the buck stops with you, basically. I like the entrepreneurial spirit and the energy you need to have in biotech, and the opportunity to work on very exciting projects.”
Many other executives mentioned enjoying the increased and diversified responsibility. David Johnson transitioned from a large medical device firm to a small biopharma company. At his larger companies, there were teams that specialized in certain areas to rely on. Now, Johnson finds he has to be more resourceful and innovative. “You have to roll up your sleeves and do a lot more yourself.” He admits, “But for me, this is a big part of the fun of the job. I am enjoying getting my hands dirty and, together with a great group of colleagues, building a company from scratch.”
PATIENTS
And last but not least, leaders cited a closer relationship with patients as a major reason for joining smaller companies. When the opportunity came along to join a tiny medical technology startup in New Jersey, Betsy Hanna jumped at it. “I was ready for a new challenge. In the larger organizations, I found myself spending less and less time with patients or working on new products and ideas, and more time trying to manage budgets and internal politics. My passion is creating new businesses, creating new opportunities, working with my teams, and doing something that has an impact on patients’ lives. I felt like the more successful I was in the big healthcare companies, the farther away I got from that.”
As you can see, there are many attractive qualities about smaller companies, but the transition isn’t necessarily for everyone. Large companies have many advantages and securities that smaller ones don’t have. It’s also important to remember that most executives wouldn’t have been prepared for the tough entrepreneurial climate had they not spent so much time in Big Pharma. If anyone else has made this transition, I’d love to hear your thoughts and experiences in the comments below. And here’s a fun fact: What was the most common leadership challenge mentioned by executives making this change? Fundraising!
Considering making this transition yourself? See my previous article, 6 Tips on Making the Move From a Large Company to a Small One.
Looking for executive leadership for your small to mid-sized company? Contact Ashton Tweed today.
Share your insights! Contact jamesrudman@ashtontweed.com to contribute your life sciences article as a guest writer.
