The MT of a biotech medical start-up was in a state of deep distrust when we first met early 2024. The company had a dream start with international awards for their groundbreaking cancer research and development of a new cancer treatment. Five founders had raised EU subsidies and investments and also large private investments to fund the 10–15-year roadmap ahead to a treatment that can be scaled to cure 10.000s of patients worldwide.
The later private investments came at a price. Investors required that the five founders hired more experienced managers to steer the company. The newly hired CEO and Chief R&D officer (CTO) were 20+ years older, indeed more experienced managers with a corporate rather than entrepreneurial background. The experienced managers had a general business, technical, and management profile. The founders had a deep biomedical profile with a pure infatuation for curing cancer. Quite some differences to deal with as a starting Management Team.
Distrust had grown in the first year as the CTO & CEO felt the MT was too big (7) for the size of the company (54 people) and the managerial competence of the founders too little to continue. They decided to invest in a full-blown assessment of the whole MT. On the basis of the results, they removed two founders from the MT to focus on biomedical research. This led to controversy, power play and distrust.
We focused on rebuilding trust in our first two facilitated team development sessions a year later, until a new financial reality kicked in. Funds and investments were drying up. Cashflow had dropped to a 5-month runway. The company needed to reorganize and let half of their employees go.
This came as a blessing in disguise in team development process, as discussions were still long and unconclusive. We challenged the MT: “if you cut the company by 50% and you want to keep credibility, you need to cut the MT in half as well.” The team realized they needed to use the opportunity to make a fresh start as an MT as well. Momentum was right there. Pressure was on. They decided that the MT needed to be cut down from 5 to 2 or 3 people. There was no time for external assessments or consultants to make the judgement call.
We planned a session in a week’s time. Preparation for this session were 3 questions:
- How can you see yourself grow as a result of this reorganization?
- Who would you trust to run the MT, if you can NOT nominate yourself and why?
- What role can you see for yourself outside the MT, to help the company recover and grow after the reorganization?
In the meeting, 4 out of 5 MT members agreed on the same MT composition. These four MT members nominated the same three people to lead the company. It was a tough conversation, especially for one founder who had to face the fact that she was not chosen by 4 others. But the message was clear and the process transparent.
Quite some hours were spent to carve out new roles and let the message sink in, but it was less than 10% of the entropy (energy loss) compared to the earlier nontransparent way to let two MT members leave a year earlier. Now two more MT members left the team and one founder left the organization within 6 months.
The company bounced back in November, after they reached a new medical milestone, which set off new investments as well.
Learnings
The journey of this biotech medical start-up underscores the importance of trust, and adaptability within a management team. The courageous conversations and transparent decision-making process during the reorganization phase enabled the team to rebuild trust and ensure the company's survival.
Case study was derived and anonymized from our work practice.
