“When you run a company every day is a challenge”

Executives up close - Interview

with Gerhard KLEMENT (CEO and Owner CellworX Pte Ltd.)

Nationality: German, living in Singapore

Sharing some in-depth insights into executive careers in the Life Sciences we’re kicking off our interview series “Executives up close” with the very passionate and impressive Gerhard Klement from CellworX Pte Ltd.

Gerhard has more than 35 years of international (Europe, USA and Asia) executive experience within the biotechnology industry. Early in his career, he was the Chief Engineer at Centocor and was responsible for technology transfer and start-up activities at Centocor’s new site in St. Louis; process design, installation, process validation, quality system strategy and facility construction. He has also been involved in the bioprocess design, installation and commercial manufacture of the following commercially available products: Humira, TPA, EPO, GCSF, RebiF, Lucentis and Gonal F (Some as Biosimilars). He also served as COO Biopharma Lonza Group AG, CEO of Piramal Pharma Solution and Reliance Biopharmaceuticals.

Gerhard is a recognized industry expert in the design, development and scaling-up of novel bioreactors, in a variety of operating modes such as: batch, fed-batch, perfusion and continuous operations. Today he is applying this accumulated expertise in process design and development for bioreactors and other bioprocessing unit operations to the cell therapy industry. He was responsible for guiding the development of Mesoblast’s commercial manufacturing processes. Most recently, he has successfully transferred a 2D planar cell cultivation process into a 3D format for 50 L bioreactors, which has resulted in favorable process economics. Only few commercial entity has achieved technology transfer at this scale.

Mr. Klement, what’s your passion in your career and how important is passion to you?

Passion in a career is important because if you don’t have passion, you won’t have a career. When you’re passionate in person you can do anything. You need to really be behind everything you do and you also need your passion with people – to lead the way for them. It’s as simple as that. Because you really need to live what you want to do, you need to live the results you want. Only a passionate person can really achieve this. Show your passion, because through this passion you actually motivate your colleagues and all the people working for you as well. I think even passion on lower levels or positions is a very important factor. If you don’t have passion, you cannot achieve anything, it doesn’t matter where you are or which level you are on.

Considering your international background, what are the biggest challenges in an international career?

The biggest challenge you have is getting used to the cultures in the different countries. Just look inside of Europe. If you run a company in Europe, let’s say in Switzerland, you need to show a different kind of management style and approach to the people, than you show to people in Germany. If you talk to somebody in Switzerland in a certain way, this might be considered rude to people in Germany. The same applies vice versa. When I moved to India, in the beginning I applied some kind of management style from the US. That was a No-Go. One of the most important things in India is the relationship. I learned about that just watching people and seeing who is going with whom for lunch. Relationship is everything. On one hand you need to be the boss, you need to be the leader, you need to give them directions. On the other hand you need to respect them, the cultural and religious background in the way you talk to them. If you work in different countries: be prepared, make sure that you actually learn about the experience, be open throughout your whole management style. Wherever you’re coming from, throw that overboard and start all over again. Go to the people, be accessible and show them that you are a leader. Have an open door. Be there for your people, take care of them. Don’t copy. Try to accept and try to live with it your way.

How does your industry differ in different countries and what did that contribute to your career?

If you look at the technology itself, there is no difference at all. When you look at the people in management, they are all internationally trained. But you have to be careful, even internationally trained, in India, US and Europe they have a certain behavior. Please keep this in mind. Technologywise it’s all the same, different is the culture, different is the approach, how you deal with people and setbacks. Sometimes it’s more difficult to get things done, to get things installed and synchronized. But you have all the international distributors, international engineering companies and they are coming from all over the world and put their system in. You can have some difficulties to construct the facilities, to find the right level of talent in the country itself but even that is changing. When you have to hire local people, talk to them and train them, but don’t be the policeman – this won’t work. You cannot always bring the Europeans in, because you can train local companies to actually do the job with the right quality for you and your business. When I worked at Piramal Pharma Solution, I had 12 facilities all over the world between Seattle and Shanghai. When I went to the UK to my guys in Newcastle, it was a big difference to when I worked with my guys in Toronto, to when I went to Japan and to my guys in India. It’s all different. But I made a lot of meetings, sat down with the people face to face and got to know them and learned about things, so I could help them with what they needed. But not only talk, you need to do it. That’s a very important thing.

You have worked in companies of different sizes. What did you learn from that? What difference does the size make?

The size of a company is related to your work environment. The larger the company, the more people you have around you that you can delegate. It’s a question of delegation. With a big company you need to empower people, distribute the work between them and then they will work by themselves. But you also need to trust them and have their back. In smaller companies, I hate to say it, you need to be more of a micro-manager. You need to look at details. When you’re in a small company, you do everything. Everything relies on you. Almost everybody needs to do everything.

What, in your opinion, makes a leader successful?

Most important: you need passion. You need to love what you do and be behind it. You need leadership skills, you need to be the front runner. I used to say: a CEO is the first sales guy of a company. You need to sell your company (I mean not to get money for it). You need to show the world: we are here, we’re doing a great job, you can come to us! Be the person every employee can come to and talk to. See that you can help them to create a very good company. A successful leader creates a great environment that everybody is happy and likes to work in. Say hello, be there for the people and don’t be negative. Even when you’re in the greatest trouble, stay positive. You also need to protect your people, you need to be the firewall. If you have some kind of issue and you expose people, you’re losing your reputation and they will not come to you anymore. I always used to say (it’s not from me): success has a lot of fathers, failure only one. As a leader you need to keep this in mind. When you accept this, you are a good leader.

Do you actively work on your leadership skills and if so, how?

In principle terms everybody can learn. But I think when you’re a leader you need to have a certain kind of character. You need to show some kind of talent within yourself. You can go to management courses and they will teach you some things but at the end of the day there needs to be some kind of basic talents in you, to really be a leader. You need to bring the basic skills and you need to show that you can lead. This already starts very early in your life – in school, in the army, in university – and you build on that throughout your life and your career.

What role does innovation play in the success of a company?

Innovation creates a value for the company. That’s what you hear from banks and in seminars. The problem you have with innovation is: yes, it’s important but it’s depending on which industry you are in and what you want to do. There’s a lot happening in the stem cell business right now; they see everything as innovation and there are a lot of patents involved that drive value for the company. When you’re in a service business, it’s very difficult to achieve innovation. You need to rely on your know-how, which you cannot patent. It’s a bit of a catch 22. When you’re looking for investors, innovation is very important. They want to see whether you have the ability, whether you have innovation and the IP in the house or you have the possibility for it. In the service industry, normally the one who pays is the one who owns. The only thing that a service business can actually get is the freedom to operate. In the end you usually don’t own the results. I don’t think there’s a straight answer for the question. For an IT company it’s very important to have innovation, in a service company it’s more the know-how that counts.

In industries like the Life Sciences expert knowledge and management skills often aren’t easy to combine. What do you think is more important?

This depends on which position you’re actually looking at. I always believe that in management you need to understand what you’re responsible for. You don’t need to be the expert for it but you need to have a pretty good idea what the people are doing and what the technology is behind it. Because only when you understand what’s going on you can make the right decision. In your R&D area you definitely need to have more expert knowledge than management skills. You need to have some management skills but it’s more important that you have the expert skills because you need to create new things and you can only create new things when you understand the technology. They are more the “Einsteins”, they have different kinds of management skills. When you look at the CEO: I understand what I’m dealing with but I’m not the expert. Still, when I go to R&D and they tell me something, I know what is going on.

What have been your biggest challenges in your career within the last 10 years?

I worked in India and every day was some kind of a challenge. In the industry you have challenges every day and you cannot say this was a bigger challenge than that. You need to deal with every challenge that you get. When you run a company every day is a challenge. We had issues with clinical trials, we had issues with technical installation, etc. The biggest challenge for my career now is financing a company. That’s a huge challenge. That’s one of the biggest ones I have seen over the last 10 years. Not only for me, when I look at the industry, especially the start-ups, the biggest challenge is financing and I have not seen so many difficulties in financing as I see right now.

What do you think your industry is going to be most challenged with in the next 2-5 years?

I think, when you talk about the pharmaceutical/biotech/stemcell industry the challenge will be in two different directions. Challenge A will be locations. Particularly where you manufacture. Lots of things will happen and continue to happen in Asia. You also have to keep in mind that a lot of people that have been trained and educated in Europe are coming back to Asia (particularly China, India but also Malaysia and Indonesia). Governments invest a lot of money in education and the cost structures that challenge the Western industries. The tendency I see is that companies will go to Asia. Novartis has a big new center now in Asia. You see a lot of start-ups coming up. In Asia you get two things: you get extremely good tax incentives and you get very well educated people. Governments invest to educate the people and make them available for the industry. And the salary structure is much lower than in Europe. And people worry about the quality but in Asia they are working with the same quality standards like they work in Europe, they got trained and they bring the consultants in from outside.

The other challenge will be the biosimilars. If you look at the small molecules (APIs) 10 years ago they came up and replaced the traditional drugs. In the US biosimilars are more usually prescribed and have eroded the prices up to 70% compared to the original drugs. You will see this happening in the biotech industry concerning the traditional antibody area. The problem is that the prices will not erode as much as the prices eroded in the API-structure since there is a lot of regulation and testing involved. But I think they will go down by something like 30-40 percent. Another thing that could be a benefit and that companies should look at is a new way of administering the drug. This and the location-factor are the two main factors I see and will, together with the patent situation create another way of competition.

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