What Press Releases Telegraph About Your Leadership

There are two extremes in public life science companies: the ones with too many press releases and those with too few. In both cases, they telegraph a focus on the short-term stock price. Value investors want communication they can trust; they are the people you want to invest in your biotech company.

In a public company, you likely have investor relations people crafting your messages and possibly PR people guiding you on what to say and how to say it, as well as compliance people to advise you on what you need to disclose regarding material events. Even with all that help, CEOs and their officers are ultimately responsible for the content. Therefore, we can see how upper management is doing with respect to their leadership in how a company handles the announcement of top management changes, downsizing, or strategic repositioning, for example.

In a previous article, I talked about spin and diversion and how they don't fool anyone knowledgeable about your business. Who wants to be seen as an emperor with no clothes or a mistake-prone company leader? If one keeps a good handle on corporate communications with solid leadership, when the news is good or bad, you are more likely to avoid creating a poor perception regardless of the news. In this issue, I want to expand on how we communicate as the company's leadership to those outside our company.

In the high-risk journey from concept to market, there will be times when the rewards of a corporate partnership don't materialize, a therapy fails to meet its primary endpoint, or that first-in-class approved product you've worked so hard to achieve doesn't meet revenue expectations out of the gate. However, if you have done your best and continue demonstrating a firm knowledge of your niche, fearless but wise decision-making, and evidence of accomplishment elsewhere, you'll be fine; investors will keep the faith.

In a public company, we have a broader responsibility to communicate to investors, many of whom are not the expert VCs that funded the company in its early days. If you have taken the company public, that responsibility extends to an increased expectation of tangible value creation and growth. Often, preclinical-stage biotech companies need help with this as a public company. There will be programs that you should fast-fail, and there will be pressures to expand and contract your pipeline (so it is better to keep a handle on it from the start). A loss extends well beyond your executives and venture capitalists if a therapy fails.

Sure, investors like biotech for its potential big win, but in the end, the company's leadership should be in biotech to grow the company by delivering value in the form of a medically useful, cost-effective product to patients.

Here are some things that telegraph a wise and skillful leadership:

While trust is a critical element of your leadership within the company, it is also a key element for your investors. Build it by always being true to your word and communicating both the good and the bad realistically from a position of strength, which you'll be able to do because of your leadership. Strong leadership allows you to set expectations that you'll fast-fail when it benefits the vision and make wise decisions while staying true to purpose.

Maintain your integrity in every press release, every quote your PR person asks for, and every corporate presentation. When integrity is compromised, it can be lost for good, and the reputation can travel with you even in a new company. The investors willing to discount the need for integrity are not the investors you want to attract.

I was once on a trip with a company investment advisor on our way to meet with potential investors. It was a time of change and growth in the company at the preclinical stage. I was perceived as someone able to convey confidence in our technology with integrity. It was deemed essential to have me represent our public company even though I was a mere Director at the time. Oddly (to me), some investors found it refreshing and told me so! However, the advisor confided to me on our trip that we faced an uphill battle as investor and analysts' dealings with our CEO in the past still left some with a level of mistrust; this was even though the events were years earlier, our CEO sincerely wanted our company to succeed and was now doing his best.

Do be careful. You're creating a legacy with every piece of corporate communication.

Convey a confident knowledge that fosters trust in your abilities to lead the company. Be sure you know your technology well enough. If you're the CEO, this isn't to say you have to be able to get into the weeds yet be able to demonstrate your understanding to the extent that transmits confidence that you have the wherewithal to make crucial decisions regarding the pipeline, a fair deal, and the company's next growth opportunity. Also, it will keep you grounded enough so that the temptation to oversell in press releases is less likely; it is easier to overblow things when you can fall back on an excuse that you were merely going on what your people told you. This goes for the CFO as well. Take time to learn from your CSO. CTO and their staff. In turn, do them a favor and educate them. You'll thank each other for it when you celebrate success and can problem-solve more meaningfully when a challenge arises.

Remember that corporate communication often contains its most important messages between the lines.

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