Hiring Women Execs in Biotech, VC Firms Is a Moneyball Play (Part 2)  

In Part 1 of our series, Hiring Women Execs in Biotech, VC Firms is a Moneyball Play, we shared a range of statistics showing that companies with women in senior executive and board positions achieved superior financial returns. In Part 2, we’re going to look at why more biotech companies and VC firms aren’t making the Moneyball play, and what some organizations are trying to do about it.

To begin with, let’s look at the challenges.

The Hurdles

Leora Schiff: Luke Timmerman and Meg Tirrell were able to show that outright sexism still does exist in the biotech industry (Their podcast, Sexism in biotech, from scantily clad models to how gender affects this podcast is worth checking out). However, it appears that most hurdles to gender parity are not intentional. There are many systemic issues that perpetuate a system that results in men consistently being tapped for leadership positions while their female counterparts are being overlooked.

Leora Schiff, principal, Altius Strategy Consulting

Leora Schiff, principal, Altius Strategy Consulting

Liftstream recently published an extensive study on gender diversity in the biotech industry which they described “a complex web of influences and conditions that skew the leadership pipeline and create a system that is, in essence, anti-meritocratic.” Among these skewing factors, the report found that unconscious bias constitutes a major hurdle for women attaining positions of executive leadership. Unconscious bias against women based on preconceptions exists in both men AND women. However, most biotech companies have no training for their employees to understand and prevent unconscious bias from influencing decisions about candidate selection, promotions, and other decisions that would determine the position of women within their organizations.

As a result, companies are making sub-optimal decisions regarding their human capital in general and the filling of leadership positions in particular. Fortunately, unconscious bias can be countered (see The Solutions below), letting companies make more rational decisions about investing in the best talent to grow their organizations and generate the best returns.

Kyle Serikawa

Kyle Serikawa

Kyle Serikawa: It’s a very timely point. There’s an argument being made that unconscious bias contributed to the recent Presidential Election outcome. This FiveThirtyEight article about measuring and assessing the effect of unconscious or implicit bias on voting patterns is fascinating. One tough hurdle for biopharma is that, by definition, unconscious bias isn’t part of a person’s active, surface thought processes. Measuring it takes studies that test things like how quickly people associate different words with pictures of, for example, men and women.

That article has another chunk of meat to chew on: implicit bias based on gender is, on average, greater the older a person is. This is a snapshot, not a longitudinal study, so shouldn’t be taken to mean aging leads to an increase in bias. Rather, it says right now, with our current population, bias is more likely in older people. Like older men, who current hold the majority of decision-making positions in biopharma and the VC world. I am not saying any individual person in a position of influence in biopharma is or has to be biased. I am saying it’s possible and well worth studying, as you suggest.

Leora: Probably, one of the hardest hurdles to overcome is the rolodex of ‘safe bets’ – the people you know who you’ve worked with in the past or who have worked with people you trust, or people who have a phenotype that you associate with success. Given the high level of risk associated with biotech endeavors, VCs and companies tend to pick leadership from among ‘known quantities’ from their rolodexes, giving them some reassurance that they are eliminating some of the risk associated with key hires. Unfortunately, by using this strategy you also eliminate the potential upside of people who could be superior performers who simply aren’t within your universe of choices.

This problem applies not just to women – many men also find it difficult to become part of the club of go-to people for these senior roles due to a lack of the right connections. However, given how few women have broken this particular glass ceiling, this phenomenon constitutes a structural problem that perpetuates the exclusion of women from consideration for leadership positions.

Kyle: I’m reminded of Malcolm Gladwell’s book, Outliers. One of his suggestions for why some people succeed and other don’t is because of small initial, random events that become greatly magnified over time. A butterfly effect of achievement. He described the effect in Canadian Junior Hockey, in which the cutoff date for age at tryouts to elite hockey leagues has been January 1st. Because of this, for any given cohort a kid born in January will be bigger, older, and stronger on average than many of the kids born in the later part of the year. Those early-born kids will be more likely to get accepted and, therefore, more likely to benefit from the intensive training of these elite hockey programs. This effect, called the “relative age effect” among other names, is a structural issue that can affect success at various levels of athletics.

It’s not hard to frame the selection phenomenon you describe in similar terms. As VCs and companies select candidates for advancement and hiring using a variety of criteria, if there are small tendencies to pick men over women, even a small initial disparity can lead to pronounced effects at the end. Those individuals selected will have exposure to a different level of strategic thinking, training, skills and connections that cement their role and future advancement path, leaving similarly talented individuals behind. If you’re a female scientist who’s overlooked for advancement toward a more managerial role by your mid-career, it’s hard to catch up when you get limited or no practice at managerial and higher-level thinking.

The Solutions

Leora: As always, the best starting point for finding a solution is to be aware of the existence of a problem. Companies need to look critically at their organizations to see how they measure on the scale of gender diversity and their ability to recruit, retain and promote the best talent, regardless of gender (or other diversity measures by that matter). Similarly, VCs need to evaluate how they choose their partners as well as the leadership team for their portfolio companies and whether or not they are optimizing the composition of their leadership.

The Liftstream report had a number of recommendations to increase women’s participation in biotech leadership positions. Top of the list was for companies to establish practices and training programs that would combat unconscious bias in recruiting and promotion. (I hesitate to say elimination – no one’s perfect; one can only hope for companies to strive for perfection.)

The report also provided a number of organizational approaches to helping women develop the skills, the reputation and the contacts needed to become part of the go-to crowd for leadership positions:

  • Proactively develop women for leadership roles through formal mentorship programs
  • Provide more opportunities for women to be speakers and have industry exposure at conferences and public forums
  • Actively facilitate senior women becoming members of external boards

Kyle: To those great ideas I’d also add some more fundamental work on introducing the concept of unconscious bias itself. This won’t be easy. By training, scientists are skeptics, but by birth, scientists are human. We know that humans often show a tendency toward motivated reasoning, in which emotional factors and beliefs influence the facts and arguments we choose to accept, highlight and use. Ideas that don’t fit into our worldview (such as: I have unconscious bias against women in the life sciences) may be dismissed or argued against.

The solution, at least for scientists, will involve facts and data. Reaching out to Project Implicit, which was a source of some of the data in the fivethirtyeight piece, could provide information on the distribution of attitudes toward gender in the biomedical industry. A forward thinking group could commission this kind of research.

Your point about women and conferences also reminds me of other efforts to highlight the high degree of gender imbalance at symposia and other scientific meetings. It’s interesting that when conference organizers are asked why there aren’t more (or any) women on their speaker and panel lists, the response is sometimes, “we didn’t think of any women when we were making up the list.” Unconscious bias? Historical networks? Difficulty of women to obtain and advance into leadership positions? A little bit of everything? Seems like a great career development tool for industry to proactively get female scientists and directors roles at conferences looking for more diversity.

There are some process-oriented things that companies can do to help women as well. Having HR reformat resumes to remove gender cues is one. Simple things like gender specific names can have an impact on assessment of candidates. Once women are hired, there are tools in meetings and other organizational functions that can reduce systemic hurdles toward women. For example, women may express reduced career ambitions relative to men. That NPR piece suggested single women often express lower ambition than men or married women in terms of career goals. A savvy organization would work to promote and model appropriate goals to single women. Another simple trick would be having people submit ideas ahead of time for brainstorming sessions and other meetings. By introducing all ideas equally at the start, this reduces the chances of having aggressive individuals (*cough*men*cough*) dominating the conversation. Having ideas expressed ahead of time and presented without attribution (at first) also reduces the effect of unconscious bias.

Leora: Companies should recognize that getting on board with gender diversity initiatives can actually confer a competitive advantage. Women will be attracted to companies that have a reputation for providing the greatest opportunities for career advancement, giving these companies the opportunity to draw from the greatest pool of talent. Women of experience looking for senior positions will be scrutinizing the composition of company leadership teams and boards to gauge just how supportive the environment would be for them to get ahead. In a highly competitive industry, companies capable of out-competing their competition in recruiting and retaining women of excellence will definitely have an edge on their competitors.

Kyle: This gets back to the point of our previous piece on viewing hiring of women as a MoneyBall play. Building off the sports analogy, there are a number of factors that play into an free agent’s decision to sign with a given team beyond dollars. Would Kevin Durant have chosen the Golden State Warriors if they didn’t already have a great core in place?

What kinds of things would make a biopharma or VC organization attractive to women? To riff off a surprisingly good Mel Gibson movie, management has to understand what women want. How about paid parental leave that doesn’t require burning vacation and family support policies including flexible hours? I also agree with your thoughts about board composition and real examples of putting money and time into gender support programs. Websites and slogans are well and good, but measurable actions speak far louder.

Leora: The Massachusetts Biotechnology Council has been taking the lead in efforts to correct the balance and ensure that women are equally represented at all levels within the biotechnology industry. Last year, MassBio launched its Gender Diversity Initiative with the goals of “growing women’s participation on corporate boards, expanding the number of women in the C-Suite and building the pipeline of diverse candidates throughout the industry.”

It would be great if other industry organizations like PhRMA and BIO, as well as all the state biotech organizations also got involved in supporting improving gender diversity. While the Women’s March on Washington was about political issues, one thing is certain – women are willing to take action and they want a seat at the table.

MassBio recently published an Open Letter to the BioPharma Community in which they outline ten best practices to achieve gender diversity:

Top Ten Best Practices for Increasing Gender Diversity in the BioPharma Industry:

  1. We as executives and board members declare gender diversity as a priority, as a key value and ethos.  We commit to living it visibly at all of our companies and organizations.
  2. We will create opportunities for open dialogue on enhancing gender diversity and ensuring an inclusive environment, both within our organizations and across the industry.
  3. We recognize the importance of formal sponsorship programs to ensure diversity in our executive leadership pipeline and commit to building these programs in our companies.
  4. We also recognize that it is important to provide formal mentorship programs to encourage women to engage with executives, both inside and outside of our organization. We commit to building these programs in our companies.
  5. We will ask our board members to be active sponsors of women who are “board ready” to pursue board appointments. We will endorse and sponsor our high potential female talent to take part in training programs to become “boardroom ready”.
  6. We will measure and track promotion of female talent to senior management positions.
  7. We will seek out and celebrate positive role models within our organizations.
  8. We will review our hiring processes and train our hiring managers on diversity and inclusion as a priority.
  9. We agree with the importance of setting concrete hiring goals to achieve gender parity and inclusion at each level of our organizations and to measure and report regularly on our progress towards goals.
  10. We will support the work of our trade organizations, like MassBio, on industry-wide efforts to improve gender diversity at the macro level.

“Not only is this the right thing to do, it is absolutely critical in order for the industry to sustain its growth,” said MassBio president Robert Coughlin, in a statement.

The open letter has already been signed by over 200 members of the life science industry, including the Timmerman Report team. We encourage you to sign this letter and more importantly, to take action to help improve gender diversity in the biopharm industry. After all, it just makes business sense.

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