Never Back Smug: A Lesson for Life Sciences From Newt Gingrich
Newt Gingrich comes across on TV as someone who radiates smugness. It’s that sense that he’s not just confident in his own abilities, but extremely satisfied with his talents and his utter superiority over mere mortals like you and me.
I’m no political pundit, nor a psychologist, so I’ll let others analyze whether Newt is presidential material. But good old Newt got me thinking this past week about this specific character trait, and other unappealing elements of personality, that we often see in leaders of the life sciences industry. Bob More, a veteran venture capitalist with Frazier Healthcare Ventures, inspired me to delve into character this week with one recent comment on Twitter.
“Politics pretty similar to backing CEO’s. Newt may be smart and a good debate guy. But Newt=Smug. Never back smug,” More wrote on his Twitter account (@Bobmorevc).
Given how often people harp about the need to find superb management teams for developing new drugs or devices, I followed up with More to hear his thoughts on character traits to back, and to back away from, in life science entrepreneurs.
The No. 1 character trait to look out for, according to More and his mentor Jim Blair at Domain Associates, is trustworthiness. Dishonesty, to them, is the king of all deal-breakers. For example, More says he once worked for six months scrutinizing every imaginable aspect of a prospective investment for Domain, which he was quite excited about. Then at the last minute, the entrepreneur mentioned a slight change to the term sheet.
“It felt like one of those things where a real estate agent comes in at last minute, and says ‘Oh, it’s just another $6,000 fee for the house,’” More recalls. He left that meeting with doubts about the executive’s credibility in other situations. When he asked Blair for advice, the response was memorable: “Kill the deal. Life is too short to deal with people like that,” More recalls Blair saying at the time. (Blair confirmed the story, and added that it wasn’t the only time he’s stopped an investment because of character concerns.)
This is tricky stuff, because all kinds of dishonesty unfortunately passes for standard procedure in business—ever hear of an executive resigning to “spend more time with family?” But the honesty thing is worth harping on in this specific context, because it strikes me that life sciences has more than its share of spinmeisters, hypesters, smoke-and-mirrors actors, and worse. One of the sure tests of honesty, More says, is to ask whether an executive will be candid and forthright about bad news in private, so that board members or advisors can work together constructively to solve the problem.
“You can deliver good news whenever, but delivery of bad news should be pretty quick. If you’re hiding bad news or hoping it will go away, it’s not a good trait,” More says. “When people are forthright, it builds trust.”
Then there’s smugness, that arrogance or sense of superiority. Developing innovative new drugs or devices requires a strong ego, high IQ, stamina, an inspiring personality that attracts other people, and other things. Often, that combination spills over into smugness or arrogance. More says he watches for a lot of the same cues that his sister, a teacher, watches for at school. “When judging some of these personality traits, it’s pretty universal. You can learn a lot by seeing the way somebody treats a receptionist. I’ve not done deals with people because of the way they interacted with my receptionist,” More says.
Another warning sign to More is what he calls “the silo mentality.” This is when a CEO strictly boxes people in the company into departments, so that he or she is the only person with a complete view of what’s going on. He didn’t say really what character flaw that exposes, although to me it sounds like paranoia or insecurity about one’s power over the minions. Then again, More says this isn’t necessarily a disqualifying characteristic. There are exceptions to the rule, like Steve Jobs, a famous jerk and fan of silos. (While sometimes assholes can be effective CEOs, that’s becoming less true in today’s world, according to a report last week from my colleague Greg Huang).
The best executives have an incredible focus, and deep burning desire in the gut to achieve a goal. They don’t want to be in the 99th percentile of what they’re doing, they want to be the absolute best, More says. For an obvious example of that mentality, watch New England Patriots quarterback Tom Brady in the Super Bowl on Sunday. I’m no Patriots fan (Go Packers!), but I have to admire Brady’s burning intensity to be the best, and his recognition of how to bring out the best in his offensive line, running backs, and receivers. A great CEO also has relentless desire and surrounds himself with great people who can perform critical tasks around them, Blair says.
Beyond that, there’s the ability to inspire. While it may not be a character flaw, weak leadership, or weak ability to inspire is something that Blair says he probes for. “Intellectual leaders are one thing, but do the people working for him think he’ll run through brick walls to get the company where it needs to be?” Blair says. “I can remember one time asking people that, and hearing that if faced with a brick wall, their CEO would first take a long walk to the left of the wall to look and see if there’s a way around it, then take a long walk to the right, and then maybe grab a rope to hang over and try to climb it and take a look. That was not exactly a salute to his leadership.”
Some entrepreneurs, More says, are bound to shoot back, “what about the character flaws of VCs?” There are certainly many of those, and probably enough to fill up several future columns. At least for today, I’d love to hear your stories about what you think are the most deadly character flaws you see in biotech executives. Please post your thoughts in the comment section below, or send me a note at firstname.lastname@example.org (and specify whether you’d like your comment to be public or not.)