Posted by Nikos Kontos on March 3rd, 2020.
When a non-EU-based biopharmaceutical company decides to establish a presence in Europe, there are seemingly countless items that need to be managed, ranging from the highly strategic to the mundane. One of the most important items is building the European team. In the previous article, we outlined five ways in which hiring and recruiting differ in Europe vs the United States. In this installment, we provide some guidelines regarding who to hire and when to hire them.
When initially building a team in Europe, there are two key points to keep in mind (aside from the ones we mentioned in the previous article):
- The European General Manager (GM) role is an absolutely critical one
- The sequencing of hiring is important
Bringing the right GM on board, then building a cohesive team under him or her in the right way, are absolutely vital to success.
Importance of the General Manager Role
The GM must be a strong leader with a proven track record and significant experience in the relevant European market(s), including the five largest. Most likely, it will be critical that the GM have experience launching biopharma products in Europe, in particular, in key European markets including Germany, France, Italy, Spain and the UK.
Ideally, the GM should be the first person selected for the European team. He or she should become essential in helping to identify, vet, select, and on-board subsequent team members. Beyond that, the best GMs have strong, positive personalities and are “magnets” for other outstanding candidates who are motivated to work for them.
There have been instances when the GM was not the first person hired. When a company hires multiple functional roles before hiring a GM, it runs the risk of setting up personality clashes when the GM is finally brought on board. Often, the result is that the functional leaders end up leaving the organization and replacements are hired, which is time-consuming and costs a lot of money. It’s best to start with the top, then let the GM be involved in building the larger team (or at least interview the final candidates before offers are made).
Once the GM is hired, the company should bring him or her to the US (or to wherever the company’s home country is). It’s important that he/she can spend time with those in the corporate headquarters and build strong relationships, especially with corporate leaders and other key stakeholders.
This time in the corporate headquarters office is valuable for a couple of other reasons, too. For one, it gives the GM an opportunity to learn about and absorb the company’s culture, values, and operational styles. This is important because the GM will play the key role in sharing these with subsequent team members and “setting the tone” in Europe. The GM will also be a brand ambassador for the company in Europe, so it’s important that s/he spend some time in the home office grasping the culture.
Just as important, this time in the corporate headquarters offers many opportunities for the GM and corporate leaders to discuss, develop, and refine the business strategies for Europe. Such face-to-face interaction helps to build better strategies while more effectively securing buy-in from the GM. Like the culture, that buy-in is contagious. The GM will be key in ensuring that subsequent hires also understand and buy in to the plans for Europe.
As stated earlier, the GM should play a pivotal role in recruiting the rest of the European team. During the GM’s time at the corporate headquarters, he or she should make sure that all key stakeholders are aligned regarding the hiring criteria for subsequent EU team members, as well as salary guidelines, potential equity awards, relocation policies, etc. It’s best to air these questions and settle them before in-depth recruiting begins. Trying to do it during the actual recruitment process can cause delays, give candidates the impression that the company is not prepared, and possibly cause them to lose interest.
There is one last point to make regarding the GM role: Companies should consider hiring in the context of their strategy and commercial model. For example, companies looking to bring significant innovation or “disruption” to a market (e.g. gene therapy) may opt to select a GM with a little less experience but who brings a highly innovative mindset. It’s all about what the company wants to accomplish and getting a person with the right combination of qualities for the role.
Hiring in the Right Sequence
The sequence of hiring is important. Hiring the wrong people—or the right people in the wrong sequence—can be a lot more costly than in the US, given the stricter labor laws and longer timelines. Companies should consider hiring their European teams in two waves, which start after the GM is identified and can play a role in the process.
Hiring Wave 1
During the first wave of hiring, the company should bring in several key leaders who will be instrumental in getting an asset through clinical development and in laying the early groundwork for commercial success in Europe. These leaders must be in place before securing positive late-stage clinical trial results.
The company can recruit for these roles via the corporate headquarters recruiting team or by using a Europe-based recruitment consultant. Below, these roles are listed along with their on-boarding timing, relative to the anticipated launch.
- GM and an office manager (24-30 months before launch): As stated earlier, the GM is the most important hire and should be first hire, so that the rest of the team can be built around him/her. The GM should be a great leader with solid EU experience who the rest of the team can look up to. One office manager should be hired to help GM with all the initial administrative work. The office manager role can, on average, support up to six executives, so this person will also support some of the subsequent hires.
- Regulatory Leader (15-20 months before launch): This role will typically report functionally to the corporate headquarters, with a dotted-line to the GM. The Regulatory Head / Vice President will be instrumental in engaging with the European Medicines Agency (EMA) and related stakeholders to help ensure a successful filing.
- Market Access Leader (15-20 months before launch): Typically, this role will report functionally to the corporate headquarters, with a dotted-line to the GM. Early engagement with payers is crucial. Payer input can help ensure that pivotal trials are structured to generate data that will be relevant to them. During this early phase, laying the right groundwork with payers is one of the most important methods for optimizing an asset’s future commercial potential. This person will also be instrumental in choosing country-level market access leads. Securing proper access and reimbursement is a very country-specific process. A strong background in EU market access is a must for this role, and a strong leader at the EU level will ultimately help ensure pricing and market access success at the country level, too.
- Medical Affairs Leader (15-20 months before launch): Like the other roles, this one will usually report to the corporate headquarters, with a dotted-line to the GM. This person will lead efforts to set up early access programs (in collaboration with Market Access) as well as manage MSLs and early KOL engagement. The Medical Affairs leader would also contribute to clinical program development.
- Clinical Operations Leader (15-20 months before launch): The Head / Vice President of Clinical Operations may report to Global Head of R&D. This role will be critical in shepherding the asset(s) through their European clinical programs.
- Head of Legal and Compliance (15-20 months before launch): The Head of Legal and Compliance will usually report to the GM via a dotted line, with a straight line to the General Counsel / Chief Compliance Officer. This is an important role, as legislation and employment laws differ across Europe.
Hiring Wave 2
The second wave of hiring focuses more on key support functions. These personnel can come on-line after positive phase II/III clinical trial results and when the launch is deemed to be highly likely. Hiring them too early can waste resources, as they may not have much to do until the launch is confirmed. Plus, if they’re hired before the launch is confirmed, there’s always the risk that they’ll never be needed. If that happens, then the company would likely need to let them go, which could be costly. One strategy a company can use is to put such roles on a temporary contract for a period of time until launch is confirmed, thus reducing the risk.
- Head of Sales & Marketing (12-15 months before launch): This role will engage with corporate headquarters counterparts to co-develop the EU launch plan and strategy. He or she will also set up the sales & marketing infrastructure in Europe.
- Head of Finance, Head of Supply Chain (12 months before launch): Typically, these roles will report functionally to the corporate headquarters with a dotted-line to the GM. They will be needed to set up critical infrastructure (e.g. tax strategy, accounts payable, payroll, information technology, etc.). Prior to bringing these roles on board, a lot can be outsourced, so cost-wise it makes sense to bring them on only at this point.
- Germany GM (12 months before launch): Usually, Germany is the most important early EU market for a company, as launch is possible immediately after EMA approval, and with a higher price.
- Head of Human Resources (HR) (9-12 months before launch): A lot of the HR work can be done initially via the corporate headquarters or through a local consultant. It’s best to do that until 9-12 months before launch, when the work volume is more likely to justify a full-time resource.
When hiring for any role, whether it’s the GM, some other key leadership position, or other roles within the broader team, there are a couple of things to keep in mind. First is to adopt a professional and systematic approach to recruiting. Very few companies (in our experience) have a complete competency-based recruitment process in which each candidate comes through it absolutely motivated by the people he/she has met and the thoroughness of the interviews. It’s definitely better to task each member of the interview team with evaluating specific, well-defined competencies for a candidate, rather than making the candidate sit through multiple interviews that all seem to cover the same ground.
Second, a company should communicate in a timely manner with all candidates. It’s bad form to make a candidate attend interviews (by video and by travel, etc.) and then “leave them hanging” regarding the outcome. The talent pool for roles like these is quite small, and news of bad recruiting practices can spread quickly.
Once the company has determined where to locate its European headquarters, it should begin work on its hiring plan. Getting a strong GM in place and building a great team under him or her is an important priority. To create the European leadership team, it’s best to hire in two waves. That way, a company can get the right people on board at the right times, while minimizing the risk of wasting resources. Of course, the roles mentioned above aren’t the only ones that will typically be needed for a European team. However, they represent much of the key leadership. Subsequent hiring—which could be considered wave 3—would build out the local teams underneath these leaders.
Blue Matter Expert Contributors:
- George Schmidt
- Theofanis Manolikas
Partner Expert Contributors:
- Michael Bentley, Experienced Human Resources executive
- Oliver Schlitz, LLM, Managing Partner, Switzerland & Partner, Global Healthcare & Life Sciences Practice, Heidrick & Struggles