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.


Join Me at BIO-Europe Spring Mar. 21 in Barcelona To Talk EU Entrepreneurship

I’ve never been to Barcelona, but they say nice things about the place. Frankly, I don’t know much about biotech startup culture there, but I intend to sponge up as much as I can about tech transfer, company creation, and some of the particular hornet nests that European entrepreneurs have to work through to create value in healthcare.

Regular readers of TR know that I pay a lot of attention to the nexus between academia and industry, and the tech transfer challenges that vary among institutions in the U.S. That’s why I’m excited to learn more about how things work in the EU. I’ll be moderating a panel on this subject at BIO-Europe Spring on Mar. 21 in Barcelona.

See the description of the event below:

Stirring the Entrepreneurial Pot in Europe

Europe is home to many of the biggest pharmaceutical companies and the best academic biomedical researchers. But the US has always been the place with thriving hubs of biotech entrepreneurs, the home for people taking big risk and creating much of the value in healthcare. Quite a few countries aspire to create their own dynamic clusters like Boston and San Francisco, but haven’t pulled it off. What is happening today on the ground in various European hotspots, at the intersection of academia and entrepreneurship? Are seeds being planted today that could change the storyline over the next 5-10 years? Join Luke Timmerman, founder of Timmerman Report, for a lively conversation about the future of biotech entrepreneurship in Europe.

Confirmed panelist:

Alex Mayweg, venture partner, Versant Ventures

Alex Mayweg, venture partner, Versant Ventures

Alex Mayweg, venture partner, Versant Ventures

When I get back from my mountain trip the week of Feb. 21, I plan to do a special report on a handful of European institutions that are doing interesting/creative/ new things vis a vis tech transfer and company creation. I’m curious if certain policy changes or management changes have led to any interesting examples of creative ‘win-win’ deals in recent years. If you have any suggestions of good places to look, make a note to ping me at luke@timmermanreport.com on Feb. 21 or later.

If you’re a European subscriber of Timmerman Report and would like to meet over a beer at BIO-Europe Spring on Mar. 20-22, please let me know. I see a lot of interesting opportunities to learn more, write more, and reach more biotech readers across the pond.


Hiring Women Execs in Biotech, VC Firms is a Moneyball Play Part 1: Getting Better Returns

Leora Schiff, principal, Altius Strategy Consulting

Leora Schiff, principal, Altius Strategy Consulting

Leora Schiff: Kyle Serikawa and I were recently talking about the missed opportunities for biotech companies and lifescience VC firms who fail to include women among their senior leadership. Kyle’s the baseball expert, so I’m going to hand off to him to explain about Moneyball.

Kyle Serikawa: The concept of Moneyball, as practiced by the Oakland A’s in the early 21st century and as memorialized in Michael Lewis’ book, essentially boils down to identifying and procuring undervalued assets as a way to get ahead on limited resources. With the A’s, Billy Beane, the A’s General Manager, and his team realized a specific skillset (high on-base-percentage guys who also often struck out a lot but hit lots of home runs) was undervalued by Major League Baseball at the time.

Kyle Serikawa

Kyle Serikawa

By picking up players that fit that mold, and also others who didn’t fit into conventional ideas of what a ballplayer should be, the A’s created a winning team on one of the smaller payrolls in the league. You might want to quibble that they never won or even got to the World Series, but I’m happy to have that bar argument about randomness anytime. And it doesn’t detract from the extremely successful A’s run of the early 2000’s when they won the American League West division three times and came in second twice between 2002 and 2006.

You know, Leora, it’s interesting that even in the industry where the Moneyball concept originated, this missed opportunity you’re talking about still exists!

I was following a chat on Fangraphs recently, and saw the following exchange:


Farhan Zaidi is the General Manager of the Los Angeles Dodgers and the only Muslim-American GM in the major leagues. As for women? Forget it. The only female candidate for a General Manager position that’s been talked about in the last decade is Kim Ng, and that glass ceiling remains unbroken. A recent report from the University of Central Florida’s Institute for Diversity and Ethics in Sports pointed out that women make up less than 30 percent of the front office personnel. It seems like baseball still has some Moneyball opportunities in hiring.

Leora: I think this is such a great analogy for the potential opportunities for biotech companies and life science VC firms. Let me share some examples that I found on the benefits for companies that include women in their senior ranks:

Studies show greater returns from women-led companies and hedge funds:


  • A simulation model using Quantopian’s crowd-sourced trading algorithm found that Fortune 1000 companies with women CEOs outperformed the S&P by 226%. Quantopian ” is now working with Morningstar to create an algorithm for a fund built on the same premise using real-time data for live trading.” – Women-led companies perform three times better than the S&P 500. “After examining a decade’s worth of data from 300 portfolio companies, First Round Capital learned that startup teams with at least one female founder performed 63 percent better than all-male teams. The data also showed that women are present in the top ranks of their 10 most valuable companies.” –  Startups founded by women are doing way better than ones founded by men, says top firm First Round Capital
  • “Barclays’ Women in Leadership Total Return Index, which consists of American companies with a female CEO or whose proportion of female board members is at least 25 percent, is one of number of new funds that aims to capitalize on the finding that companies with female leaders tend to outperform those where women are relatively absent.” – Hedge Funds Run by Women Outperform Those Run by Men.
  • “A report put out in early 2013 by the accounting firm Rothstein Kass indicated that between January 2012 and September 2012, an index of 67 hedge funds owned or managed by women had a return of 8.95 percent—significantly more than the 2.69 percent return generated by an index “designed to be representative of the overall composition of the hedge fund universe.” (The 67 funds were chosen because they reported their monthly performance to HedgeFund.net or the Hedge Fund Research Database.) The impacts of these outsized gains, however, largely remain to be felt, as there are only about 125 female-run hedge funds in the world, according to Reuters.” – Hedge Funds Run by Women Outperform Those Run by Men.
  • A 2012 study by the Credit Suisse Research Institute found that over the prior six years, large cap companies with at least one woman board member outperformed companies with all male boards with 26 percent higher returns on equity, lower leverage and higher valuations.

So the evidence shows that companies ranging from startups to large cap as well as hedge funds all do better when women are part of the executive teams. This is a golden opportunity for companies to improve their returns – but they are missing the boat. Only 48 percent of US biotech companies have at least one woman on their board. Overall, female board directors comprise only 9.7 percent of all board directors. The statistics are just as bad for venture capital firms. Only 9.6 percent of partners in VC firms are women; for corporate venture capital, the number is slightly better at 18.1 percent.

The sad thing is that despite outperforming their male counterparts in meaningful outcomes, in many instances women STILL are not getting paid as well as their male colleagues:

  • A study by the big-data analytics company Xactly found more women achieved their sales quotas than men (70% vs 67%), but that their average commission rates were lower (4.1% vs. 4.8%). Women Outperform Men In Sales But Still Earn Less.
  • A recent study published in JAMA Internal Medicine found that 30-day mortality rates were significantly lower for patients seeing female physicians than for male physicians. “. . . if male physicians had the same outcomes as female physicians, we’d have 32,000 fewer deaths in the Medicare population.” Yet they are paid less. – Do Women Make Better Doctors Than Men?

The good news according to Liftstream’s 2015 Diversifying the Outlook report is that for women that actually make it to the C-suite as CFOs/CMOs/CSOs in biotech companies, compensation is at parity with their male counterparts. Interestingly, the report did not include compensation comparisons for male and female biotech CEOs.

Kyle: One question that comes to my mind is how having women in management, ownership, and other senior positions in organizations can lead to the kind of performance you describe. What’s the mechanism? Let me throw out a few hypotheses—emotional intelligence and the value of having a diversity of viewpoints.

As the world and, in specific, business grows more team oriented, multicultural and international, there’s a clearer need for soft skills—collaboration, sensing and responding to relationship patterns, adaptability, and leading by consensus building. These are the kinds of skills, as Victor Lipman describes, in which women excel and often outperform men. Research is showing this more and more, especially the really important skills of emotional self-awareness and empathy. Anyone who has watched colleagues go off the rails because they don’t see how they’re spinning out of control knows how crucial it is to keep an eye on the internal emotional thermostat. I just finished Phil Knight’s fascinating memoir, Shoe Dog, and there are several anecdotes showing how the alpha male/competition mentality almost broke Nike more than once. I couldn’t help thinking about what his team, visionary though they were, might have accomplished with more emotional intelligence.

And as far as diversity goes, a key thing that women bring is a different viewpoint. Groupthink is a problem in a lot of organizations, especially hierarchical, top down ones in which the only voices heard are the voices from on high. I’ve been in different kinds of organizations over the years and my anecdotal experience is that the greatest creativity happens when decision-making is distributed and different voices can be heard. Research by Leigh Thompson of the Kellogg School of Management at Northwestern University has shown that allowing diversity of ideas to flourish can lead to both more and more creative ideas in organizations.

Leora: Beyond the soft skills, studies are showing that women also have the hard, “male” skills to get things done.  As reported in the Harvard Business Review, “. . . at all levels, women are rated higher in fully 12 of the 16 competencies that go into outstanding leadership. And two of the traits where women outscored men to the highest degree — taking initiative and driving for results — have long been thought of as particularly male strengths.”

In addition, what I find fascinating is the difference in how men and women deal with risk, which is a critical issue for biotech and VC firms. We all know the successful, big risk-takers and the huge payouts that they’ve achieved. But there have also been cases of risky plays that have gone spectacularly wrong.  It looks like the overall statistics support a more rational approach to risk-taking, something that women tend to do more than men:

Kyle: With all of this data, it is surprising that more women aren’t considered and tapped for senior executive positions. In the MoneyBall days, the A’s were able to succeed with their approach because they listened to people who had crunched data and approached baseball not just with a scout’s eye but a statistician’s filter. I think back on the recent CEO changes we’ve heard about and GSK stands out as the rare large pharma that has chosen a woman, Emma Walmsley, to be the next CEO. This is an exciting development and I’m anxious to see how she does. But GSK is an exception in many ways, and as a company has often followed its own GPS.

And, unfairly to Ms. Walmsley (just as it’s been unfair to Marissa Meyer), too many observers will generalize any failings to all women while ascribing successes to some quality unique to herself.

Let’s face it, sexism is alive and, if not well, lurking in Biopharma and the VC world, just as it is across most (all?) industries. (For some cringe-worthy examples, it’s worth listening to Luke Timmerman and Meg Tirrell’s podcast “Sexism in biotech, from scantily clad models to how gender affects this podcast.”) At times like this I always think back to a line from Neal Stephenson’s Snowcrash in which the protagonist Hiro ruminates on his own flawed behavior toward a female software engineer:

“It was, of course, nothing more than sexism, the especially virulent type espoused by male techies who sincerely believe that they are too smart to be sexists.”

Many males in the industry (myself included) fall too easily into stereotyping and easy judgments, the Type 2, heuristic thinking Daniel Kahneman talks about in Thinking Fast and Slow.

But that’s what makes this a Moneyball play. The companies smart enough, self-aware enough, and confident enough to take the leap and hire more women to more positions of power and influence will find themselves in a great position.


In  Hiring Women Execs in Biotech, VC Firms is a Moneyball Play Part 2, we’re going to take a look at some of the systemic issues that make it difficult for companies to tap women for senior positions and recent initiatives to help companies make the Moneyball play and add women senior execs to their leadership teams.

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