All opinions are my own and do not necessarily reflect those of Novo Nordisk.
The story in the Times of London about GSK’s new strategy for incentivizing its R&D teams by rewarding millions (yes millions) of dollars to deserving members of the team that gets a drug to approval has provoked a flurry of responses. You can see posts from Derek Lowe, John LaMattina, and David Shaywitz that do a nice job of summarizing why this seems like a really bad idea in a lot of ways. I don’t want to restate their arguments, other than to agree wholeheartedly that rewarding the lucky scientists will overall disincentivize researchers, will be difficult to administer fairly especially given the collaborative nature of biomedical research and the long, long timeframe for a drug to be approved, will have a great likelihood of upsetting and causing hard feelings in employees, and also misses the point that motivation is hardly what’s lacking in R&D these days.
I’d like to touch on that last point with respect to what I feel is particularly worrisome in this: the complete externalization of motivation on the part of scientists, and the downstream consequences for ethical behavior and human health. A recent survey commissioned by the Law Firm of Labaton Sucharow suggests that ethical standards on Wall Street are troubling. About a quarter of respondents had observed or had firsthand knowledge of misconduct at their companies, and about a quarter also admitted they would engage in insider trading to make $10 Million if they thought they could get away with it. If these GSK-type bonuses become the standard in BioPharma R&D, will we see a rise in unethical behavior on the part of scientists? And could that lead to endangerment of human health, with clinical trials performed on compounds that are pushed farther than they should be because the R&D team is looking ahead to the possible prize?
I remember a mentor at Merck asking me after my first year how I liked my bonus. I responded enthusiastically. He nodded, smiled a little and said, “Enjoy the feeling. Because next year it won’t be the same. It’ll just be something you expect.” And he was right. We talk about the perks of working for BioPharma, but there’s actually a cost to being in an environment that provides the kinds of lavish benefits we get in industry. It can cause the personal source of motivation to shift from internal to external rewards. Ultimately, for people who are creative, I think the best work is done when internal motivators are a strong part of the driving force–something Daniel Pink describes in his book Drive. It’s why I think games work so well as a tool for getting things done. They tap into internal motivating factors. After all, no one (other than World of Warcraft Gold Farmers and the like) spends hours playing a game because they’re being paid to. We should not be trying to make an engaging, exciting pursuit like research into just something we do because it pays the bills.
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Nice post-Kyle. Ironically, it may very well be the short-term, expected rewards that hold back bold innovation-desperately needed in Pharma for sure. Let’s face it-innovation is scary, unknown, and it definitely “rocks the boat.” So, if one’s main driver is to just to make sure that nothing jeopardizes that yearly bonus, the attitude will tend to be “inertial” to put it kindly. I agree that many scientists have plenty of internal motivation, but as one goes up the hierarchy of decision making, I think it is fair to ask how the “weighting” in motivators/drivers differs. Obviously, this is all the more important since those higher up are going to be making the major decisions…What if bonuses were awarded strictly on the basis of number and quality of new approaches generated/year…(or at least something within that general line of thinking) rather than just for showing up…
Hi Ken, thanks for your comments. I do think there is a lot to the idea of unintended consequences when talking about bonuses, money, etc. I completely understand what GSK is trying to do. I just think their method is not the right one, and as you point out, may actually cause less innovation because of risk aversion when your yearly bonus is on the line. I also agree there is a real question about how much being at a different level changes one’s motivation and drivers. If we talk about internal motivators versus external, would people want to move up the hierarchy if the main benefits were non-financial–ie, more ability to think and act strategically, opportunities to manage, opportunities to meet with different people and build a different network–but no extreme raises or much higher bonuses than a corresponding scientist who just increases a rank. Would scientists then be willing to move into management? And would they make decisions differently?