Odgers Berndtson’s Mike Drew and Chris Hamilton, discuss the composition of health tech leadership teams and explain why balance is now more important than ever
The health tech sector has been growing exponentially over the past ten years, but is still a fundamentally nascent space.
Particularly from a regulatory and even organisational perspective, we remain very much in unchartered territory.
What this means for leadership teams and how those leaders manage their organisations underpins how successful those organisations will ultimately be.
Regulations and frameworks across areas of health tech are still being hashed out.
Healthcare AI applications (Software as a Medical Device) have approved regulation but where things like drug discovery, patient care, and clinical care are concerned, there is still a void of concrete laws. But this won’t be the case forever.
Both the EU and US have taken steps in this area – calling for the need for regulation that matches the pace of development in AI healthcare.
And healthcare in general is one of the most heavily regulated industries on the planet. It won’t be long before that environment is mirrored in health tech.
The fallout of this is still up for debate.
Will it stifle innovation in the sector, putting the anchors on many AI health tech platforms, or will it provide some much needed guard rails to support the safe development of AI healthcare technology?
The answer is probably somewhere between the two and navigating this line between innovation and regulation will be a core challenge for health tech leadership teams.
By extension, it will also be a challenge for how leadership teams are built.
Should your CEO be entrepreneurial, a risk taker, a purely product and service focused innovator, whose strengths lie in disrupting markets and building industry-leading products?
Or should they be adept at developing products and services within the parameters of strict frameworks, skilled at pivoting product lines to new regulations, with a history of forming relationships with regulatory bodies?
Ideally they’d be a blend of the two, but these unicorns are few and far between.
The most effective option is to have an entire leadership team whose composition balances all of these skills and traits.
Fintech is a sector in which this balance is most applicable to health tech.
Both heavily regulated and chock full of innovation, it’s a sector in which organisations have developed fantastic services while operating within the confines of a strict legal landscape.
And this is reflected in many of its leadership teams.
For example, the CEO of Thought Machine, which builds cloud-based platforms for banks, is a serial entrepreneur and technology expert.
The company’s chairman on the other hand, has a deep background in banking and financial services.
Likewise, the CEO of Starling Bank comes from a traditional financial services background while her leadership team are primarily from technology backgrounds.
What’s clear, is that leading a fintech company is a team sport, and the path to successful growth has been the marriage of two industries.
This concept will become that much more important for health tech as companies are required to innovate within a heavily regulated environment.
Particularly when we enter the era where healthcare firms are collecting core data on an individual’s health and making critical decisions on their behalf.
And even more so, when AI drug development grapples with algorithms that ‘go wrong’ and misdiagnose a tumour, for example.
Who is best placed to handle that challenge – a technologist, a doctor, or a scientist? The answer: a leadership team with all three.
Arguably, we’re already seeing this happen.
In many of the most successful and fastest growing health tech companies out there, you see leadership teams with varied, diverse backgrounds.
One company that we know particularly well has hired a Silicon Valley tech leader, a banker and investor, and a former nurse.
Leadership teams that boast diverse skillsets like these are also highly complementary for the future of health tech.
This will be the maker or breaker of companies in the space. Those that are overbalanced with one kind of individual are likely to fail – those with real diversity will succeed.
In the immediate term, achieving balance will be critical for another success factor: purpose. (You can read more about this in our next article!).
Health tech is rooted in the desire to provide the most advanced care to patients as possible.
The reason for employees to get up in the morning is clear.
But place a purely commercial leadership team in charge who lack the wherewithal to combine purpose and profit, and those employees will leave and find organisations that can.
Health tech companies are often a mix of technology specialists, clinicians, and doctors – a complex culture that needs to be reflected in the leadership team.
We believe that this kind of balance is so fundamental to the future of the industry, that it’s something we mirror in our provision of leadership talent.
Our industry and function practices overlap – there are no hard and fast borders to the structure, and just like the companies we work with, we’re sourcing leaders from many different worlds.
We know that health tech won’t be able to fish for the next generation of leaders from a purely tech candidate pool, nor from a purely healthcare candidate pool.
The most successful leadership teams will be a blend of skills and backgrounds – they will be balanced.
