- The board of directors of Camelot Biopharmaceuticals must assess the performance and leadership potential of CEO Arthur Morgan. Camelot is transitioning from a research-focused to a development and commercialization-focused company. - Arthur's collaborative leadership style worked well for the smaller, science-focused Camelot but he now struggles with timely decision making and adapting to the changing needs of the growing company. - The board will review 360-degree feedback and assess Arthur's ability to make difficult decisions, prioritize resources, communicate externally, and adapt his leadership as Camelot continues to evolve.

1. Development stage biotechnology company, focuses on the
board of directors' assessment of the CEO
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This case study for Camelot Biopharmaceuticals (name disguised), a
development stage biotechnology company, focuses on the board of
directors' assessment of the
CEO. Using management team interviews from a 360 degree
performance assessment, the Board
must assess the CEO's performance and potential for future growth.
Although Camelot had
advanced products into early stage clinical trials, the organization as a
whole still maintained
a highly scientific and research focus as the company was evolving
towards a focus on product
development and strategic alliances. • Key words: leadership, decision
making, management, scientist founders, leadership style * This case
was prepared as a basis for class discussion rather than to illustrate
either effective or ineffective
handling of an administrative situation.
367 368 THE CASE FOR BUILDING BIOTECHNOLOGY
INTRODUCTION
nFall 2008, Steve Barker, chairman of the board of directors
convened a meeting with Julie
Chan, board member and chair of the nominating & governance
committee at Camelot
Biopharrnaceuticals.' Barker, a venture capitalist whose firm had
invested in the first two rounds
investment, had just met with a prominent health care investment

2. banker, Lance Bryant, about next
steps for the Boston, Massachusetts-based biotechnology company
that was pursuing novel cancer stem
cells therapies. Bryant had taken Arthur Morgan, president &
CEO of Camelot Biopharmaceuticals, on
a two week road show to gauge institutional investor interest to
participate in a SPO (secondary public
offering) to finance future growth. Bryant was candid and frustrated
with the investor visits and reported to Barker: ''Arthur is a an
outstanding scientist, but investor feedback is very muted, particularly
amidst this difficult financial market. Investor feedback indicated he
struggled to articulate the company's future, as well as seemed
uncomfortable in teaming up with the two other Camelot executives
with whom he travelled. In short, investors are wondering if this
company can grow and scale with
Charles in charge and seemingly trying to do everyone's job."
Chan took in the seriousness of the discussion: "This is a good
opportunity to review Arthur's performance and growth potential. The
executive team just completed their 360 evaluations and I'm meeting
tomorrow with the head of human resources, Gwen Hill, to review the
results.' " Barker agreed,
"Please be prepared to debrief the full board at our meeting next
week. Let's be careful, Arthur has been
critical to Camelot's success and we need to make sure we're not too
hasty in responding to banker
feedback." I COMPANY OVERVIEW
Camelot Biopharmaceuticals (company named disguised) was
founded in the late 1990's with $3 million in venture capital funding.
By 2001 the company had raised $70 million in private capital, one
of the largest-ever financing deals for a U.S. biotechnology firm. For
the first nine months of 2007,
revenues were less than $1 million, and the overall net loss was more
than $15 million. However, the
company had more than $30 million in cash, cash equivalents, and
marketable securities. By this measure, Camelot Biopharmaceuticals
is considered a successful biopharmaceutical company even before
it has products on the market.

3. The company's initial public offering was in 2005, and Camelot's
growth strategy has focused on
pursuing strategic alliance partnerships with large multinational
pharmaceutical firms. The company's
lead drug candidate is in phase II clinical trials. Of its 60 employees,
approximately 20 are in business
and 40 are scientists. Several executives were hired in the last few
years to develop the company's first
drug products. Arthur's natural style is collaborative and as a leader he
emphasizes consensus building.
As Camelot transitions from a science-focused company to one
focused on the clinic and patients, the
style of leadership that worked well in the past is not working as well
with newer executives. Camelot 2 The nominating & governance
committee is responsible for assessing and nominating members of
the board
of directors; making recommendations regarding the board's
composition, operations and performance;
overseeing the company's CEO succession planning process;
developing corporate governance principles; and
helping shape the corporate governance of the company.
360-degree feedback is an evaluation method that incorporates
feedback from the worker, his/her peers,
superiors, subordinates, and customers. Results of these confidential
surveys are tabulated and shared with
the worker, usually by a manager. Interpretation of the results, trends
and themes are discussed as part of
the feedback. The primary reason to use this full circle of confidential
reviews is to provide the worker with
information about his/her performance from multiple perspectives.
From this feedback, the worker is able
to set goals for self-development which will advance their career and
benefit the organization. 360-degree
Feedback, or multi-rater feedback, was used by 90% of Fortune 500
companies last year. GROWING PAINS AT CAMELOT
BIOPHARMACEUTICALS Biopharmaceuticals 369 is in transition
and experiencing growing pains. THE EXECUTIVES

4. There were nine senior executives on the Camelot
Biopharmaceuticals team. 6 of 9 executives were
with the company less than two years, but all the newer hires were
very experienced biopharmaceutical
industry veterans with a diverse set of small and large firms. Key
team members included:
• • • • • Arthur Morgan, President & CEO: co-founder and
president and CEO since the
company's inception in 1999. Prior to founding the company, he was
senior scientist
and group leader at a large biotechnology company. He earned his
Ph.D. in human
genetics and cell biology and published more than 50 scientific papers
and holds several
patents.
Lance Jones, Executive Vice President & Chief Business
Officer: joined the company
in 2006 and is responsible for developing new commercial
opportunities, directing
all business development activities, and contributing to corporate
strategy. Formerly,
he was president and chief executive officer of a pharmaceutical
organization, the
president and chief operating officer at a therapeutics organization,
and the senior vice
president of business operations at another biopharmaceutical
company. Prior to this,
he worked more than 15 years with a major pharmaceutical company.
He has an MBA
degree in finance and pharmaceutical marketing.
Gil Knight, Executive Vice President and Chief Financial Officer:
past experience
includes senior vice president and chief financial officer of a major
biotechnology
supply company, the chief financial officer, secretary and treasurer,
corporate
controller, accounting manager, and budget manager at other life

5. sciences companies.
He has an MBA.
Gavin Cornwall, Chief Medical Officer: joined the company in 2006
and is
responsible for all clinical, medical, regulatory affairs and is the key
contact with the
USFDA. In the past, he was group director of oncology for a major
drug company. He
is an MD and is a board-certified oncologist.
Tristan King, Senior Vice President, Product & Pharmaceutical
Development:
joined the company in 2002 as a senior scientific director and has
served as senior vice
president of product and pharmaceutical development since 2006.
Prior to joining the
company, he worked at a major drug company as a principal scientist.
He has a Ph.D. in
molecular and cell biology.
Jeffrey Kay, General Counsel & Senior Vice President of
Operations: a co-founder
who was a government attorney prior to his current position. He has a
JD and MBA.
Luke Fisher, Vice President of Research: joined the company in 2000
and became
vice president of research in August 2007. Prior to that position he
was an academic
professor. He has a Ph.D. in biology.
Gwen Hill, Senior Director of Human Resources: has worked for the
company since
2001. Prior to 2001, she was director of human resources for several
organizations and
a private consultant. She has a M.S. degree. CEO AS LEADER
Arthur's collaborative nature in decision-making worked well when
the company was smaller and
more oriented toward science. As the company grew, however,
Arthur's decision-making skills did
not evolve as quickly. He is viewed by many of the executives as

6. indecisive. Arthur acknowledges that
he will need to adjust his style if he is to continue to lead the company
toward success. He noted that 370 THE CASE FOR BUILDING
BIOTECHNOLOGY because he wants to be inclusive and
collaborative,
enough. Arthur concedes: he has not always made difficult decisions
quickly "It was really obvious to everyone, including me, that a
certain situation needed be
moved in a certain direction or a certain person needed to be moved
out of a leadership
position. But because I was so busy being inclusive and collaborative,
I did not make
the hard decision."
Arthur admits that his difficulty with decision-making
creates "confusion and resentment in the
organization
at the senior level." Some executives felt that "a decision
for Arthur is putting off a decision." Other senior executives felt
that Arthur should learn to be more decisive, or he should step down.
But at least one executive, Gwen Hill, director of human resources
felt that Arthur was making progress in changing his approach.
"Arthur used to be terrible at making a lot of decisions, but he
has really grown a lot in making the big decisions; and he's also
willing to delegate decisions better than he ever did
before." The consensus on the issue underpinning
the lack of decisiveness was that Arthur has difficulty
making decisions because he wants everyone to like him.
one executive recounted a recent incident in which both the chief
medical officer and the executive
vice president/chief
business officer left Arthur's office after barging in shouting:
"The chief medical officer, Gavin Cornwall stormed to Arthur
that he cannot make a
change to a clinical trial that is already underway. Luke Fisher, VP of
R&D countered
that he wanted to tweak the process one more time to increase its
efficacy. Earlier he

7. had agreed with Luke with that changing the process may increase
efficacy. The scientist in Arthur enjoyed engaging with Luke, like the
old days, when they worked in
the same lab. Of course, Gavin was right. Arthur could not change a
process that had
already been approved by the FDA, but he seemed to have a hard time
making and
sticking with a decision."
Arthur engaged Harry Roman, an executive coach to help him come
up with new skills for leading
and managing. Comments from a 360 degree analysis instrument used
by Harry reached the same general conclusion: Arthur is reluctant to
make difficult decisions, is tentative in the face of a vocal minority,
and then loses focus on the critical path. He needs to delegate decision
making authority to others
or garner insight through his people and make the decision himself.
Rather than asking people what
they think about a pending decision, he should ask them what they see
as the consequences of making
a particular decision. Arthur's greatest leadership challenge is his
ability to make timely decisions.
Originally, decisions were made by all the executives reaching
consensus. However, as the company
grew and hired more executives, this approach became too
cumbersome
and the process changed. The
addition of new executives caused some of the former executives to
feel left out of certain decisions, and
the new executives sometimes feel frustrated that they do not always
have the autonomy they expect.
Gil Knight, a long time employee and CFO, states: "There are
new folks in the mix and they have different definitions of roles and
responsibilities and the way decisions should be made, versus some of
the older folks. The
challenge at the senior level is how we resolve that. The older folks
are used to a very
small group where everybody gets together and discusses a problem,

8. and then actually
it isn't really clear who has responsibility for an issue. In some cases,
it wasn't clear who
could actually make the decision and run with something, or who
could veto it. Newer
execs came in and have a more hierarchical orientation, and they say,
'This is my area,
so it's my call. I'm happy to have your input, but at the end of the day,
I decide.' In GROWING PAINS AT CAMELOT
BIOPHARMACEUTICAI..S 371 the leadership ranks, there's been
confusion and testiness at times. But the guy at the
top of any organization has to set the roles and responsibilities and the
culture of how
decisions are made. I would say that's an issue here. We started out
with a very small
entrepreneurial group and a lot of consensus. It's hard to move away
from that as we
grow bigger."
Gil noted that consensus worked in a small group "because it
allows you to get buy in, get opinions, and make sure you're not
making mistakes." Decision-making by consensus stopped
working a
the company size approached 20 employees. In a small company,
everybody wears multiple hats by
necessity; there are not enough people to cover all the administrative,
executive and scientific tasks, so
everyone chips in. When the number of employees reached 20, the
administrative structure changed
into teams with individual responsibility. When everybody is not
involved in every task and each individual is not aware of everything
that is happening, the consensus decision-making process slows
down to accommodate the need to educate, negotiate, and reconcile
the opinions of each individual. It
no longer works efficiently.
On the company science, major decisions are no longer made with
everybody, including the scientists, sitting around the table and
involved in discussions. This has led to dissatisfaction in the research

9. group, who now feel left out. Moreover, many of the scientists
struggle with business decisions
that need to be made, but which impact the science and research
program. Compartmentalization of
business and science sides of the organization occurred as the
company grew and the potential products began transitioning into the
clinic, and communication between these two essential sides of the
organization became more formal and less inclusive. Management of
the dynamic tension between the
two groups is multifactoral and a challenge for all biotechnology
companies. As Luke Fisher, VP for
R&D pointed out, "There is the managing of the
personalities, which is much more of an organizational
management; there is the managing of the science, which is much
more of an expert domain. The people
that are experts get to make the decisions."
The need for a clear decision-making process is becoming critical as
the company grows, but the
process needs to be efficient. As one executive expressed:
"The counter side to the need for process is the need for speed.
There's a dynamic tension between how much time you spend on
getting tasks done and how much time you
spend discussing and deciding how the task should be done."
The entrepreneurs in the senior executive leadership felt that it is far
easier to make decisions in a
small organization. As one noted:
"In a small organization you can make the wrong decision and
figure it out and change
it much easier than you can in a large organization. But at least you
start to move
things when you make a decision."
Senior executives articulated two key decision making and leadership
traits that will be important
for company success: ability to make difficult decisions on resource
allocation and ability to adapt and
change. Particularly in biotechnology companies that are financed by
equity sales and not product

10. sales, the volatility of the financial markets requires that cash outlay
be carefully managed, since whatever cash is available may be the last
the company can raise. One executive said:
"You can't run a large organization by treating everyone
equally, since not every function is equal in an organization. There are
some functions that are more important to
company success than others. Resources should be applied to those
tasks that are criti- 372 THE CASE FOR BUILDING
BIOTECHNOLOGY cally important for an organization. And that
requires making difficult decisions."
As the company grows and its products mature in development, the
decisions of limited resource
allocation will become more and more difficult. Arthur will also need
to shift from a focus on science
to "a corporate ambassador both of the board and to the
investors." The company is at an inflection
point and will need to adapt its management style to accommodate the
internal change in focus from
discovery to development and the external changes borne of the rigors
of running a public company. LEADERSHIP
The senior executives described Arthur's leadership role as someone
who is the "synthesizer and the
driver towards the vision," has "the ability to select and
motivate the right people," and has "the ability to
get the job done while adapting to changes in the internal and external
environment." Communication
skills and experience were also considered essential.
Several executives expressed concern that as the company grows,
Arthur may not be as visible to
the organization because his duties and responsibilities will bring him
outside the company. At this
stage of company growth, Arthur can still "walk the length of
the building ... seeing people and faces
and recognizing that they aren't just a name on an org chart." As
one executive worried:
"Arthur sets the culture. As long as he does that, people will
continue to admire and

11. work for him. If we get bigger and he... gets less visible, and travels a
lot, you know,
things permeate."
All of the leaders at Camelot Biopharmaceuticals are white men.
There is only one female in the executive suite and she is not a senior
executive, but a director. She stated, "I don't like that we don't
have
enough female people in leadership positions. I am the lone female,
and I am a fairly typical female
leader. I am not confrontational. I don't like a lot of things that go
with [being alone]."
Arthur used the words 'collaborative' and 'inclusive' to describe
himself. These traits are evident in
his use of the 360 degree assessment tool that he commissioned to
gain more information about himself. Arthur feels that his
collaborative nature and his ability to:
"... see a relatively clear vision and at the same time, be able to
articulate and get buy
in from various stakeholders and constituencies is one thing that l
think has both seen
[Camelot Biopharmaceuticals] through some very difficult times in
the biotech world
and some ups and downs in the last eight years in which many
companies that were in
our generation went out of business."
Another example of Arthur's inclusive nature is his ability to work
well with his board of directors.
"I was able to sit with all of those venture capitalists that were
in my board room one by
one and make them feel they are the part of very inclusive team which
had total transparency to the management."
Arthur has been extensively interviewed in trade journals as a young,
successful entrepreneur. He
described his views about leadership traits that can lead to failure in
one interview (citation omitted to
protect identity of CEO).
"Egomania is a destructive trait. Thinking that you are smarter

12. than everybody else
only means that you aren't. Thinking that your idea and way of doing
things is always GROWING PAINS AT CAMELOT
BIOPHARMACEUTICALS 373 the best and should be adjusted only
in the most dire circumstance is the kiss of death
for any company, sooner or later."
The senior executives described Arthur as honest and non-
confrontational. Another leadership
attribute is "getting people excited and jazzed up, you know,
empowering the heart." Several also said
that Arthur admits failings, and that admission "makes you want
to help fill in those bits and pieces.
Those are the characteristics that make you want to follow
him."
In the 360 assessment, respondents were asked to describe Arthur's
greatest leadership asset: skill
or talent. Words used to describe Arthur did not vary much from the
comments made by the senior
executives: humility, ability to seek and receive feedback, ability to
communicate the vision both internally and externally, ability to
inspire people to work hard, trustworthy, and putting people first
with praise. When asked about his greatest leadership challenge or
area for development, the same
respondents also mentioned traits that the executives used: decision-
making ability, emotional and
overly optimistic. CONFLICT
Tensions exist in Camelot Biopharmaceuticals between scientists and
business people in part because
the company still retains a strong science focus. The business
executives ask:
"How do we take this cutting-edge science and turn it into
something that will generate
revenues, a return on investment for investors, and provide benefit to
patients?
Part of the tension results from the fact that many of the scientists
have a strong academic focus,
with little company experience. However, the research executives felt

13. that the scientists were also very
used to uncertainty and constant change because research is inherently
uncertain, and that this lent
them an edge over the business people, who have to adjust
development and market plans regularly as
the science, and its uncertainty, progresses. These changes, and the
inability to follow a plan once it's
articulated, drive the business side of the organization crazy:
"On the business side, it's best to have predictability. On the
science side, you can't predict that a clinical trial is going to work or
not work. You can't even tell whether it's going
to take six months or a year. It just depends, and you can't say that on
the business side."
Part of the scientific process requires that scientists continue to work
on a project until they have
answered the questions they posed when doing the research. This
process does not always work in a
business environment, because projects often need to end by a certain
date, or there are milestones that
need to be met regardless of whether enough information has been
obtained. This limitation may result
in projects being discontinued if they cannot be resolved in a timely
manner. The business execs ask
"when do you quit something that isn't working out?" The
scientist always says, "Well, I'll run another
experiment and it might work this time," or "I have a new
idea and I can try this new thing." And the
business person says, "Well, you know, three strikes and you're
out."
This difference between scientists and business people is a large
source of conflict between the
two. Most agreed that articulating milestones and goals and actually
having to achieving them within
a strict timeline, given the uncertainty in the scientific process, makes
scientists uncomfortable. One
research executive said:
"It's very difficult for a scientist to make that kind of

14. organizational leap because, not
only are you not trained to do it, you're actually trained to do the exact
opposite. You 374 THE CASE FOR BUILDING
BIOTECHNOLOGY work out a lot of things yourself. That's the one
advantage I have on both the research
side and the business side: I actually like figuring out milestones, so it
isn't a necessary
evil to articulate them; it's just a necessity."
As the organization changes to become more business focused, some
executives felt conflicts would
be inevitable and that it would play out mostly at the level of the
executives, since they can't let the
anxiety of running a business percolate all the way down to the rest of
the organization. However, if an
organization is not ready for change, then conflicts could extend to
the Camelot Biopharmaceuticals as
a whole. Most people want to maintain the status quo and are resistant
to change, and this can play out
as turf battles or anxiety over status or control.
Even though there is conflict within Camelot Biopharmaceuticals,
most feel that change will be
easier for them, a smaller organization, than larger organizations
where a new idea or structure "goes
through one layer of review to another layer of review ... "
seemingly ad infinitum. POWER
Most executives in Camelot Biopharmaceuticals work in the business
side of the company. Several
people interviewed commented that there is conflict over power
within the business area, struggles that
may be inevitable as the company becomes more business focused.
This power struggle appears to...