Casual intensity

When developing Versapia’s Culture Operating System, I spent a lot of time studying successful companies, and there were several I felt a deep connection with.

One of them, Genentech, will be familiar to some but not all. This week I thought I’d share some of the things I discovered about them.

The story of Genentech is the stuff of Biotech legend. In 1976, venture capitalist Bob Swanson called Herb Boyer, a biochemist at UCSF, out of the blue to discuss a bold idea. Swanson wanted to start a company to commercialise the emerging science of recombinant DNA. Conventional wisdom held that genetically engineering bacteria to produce medicines remained decades away, but Boyer agreed to meet the young investor for 10 minutes.

That meeting, held in a San Francisco pub, lasted three hours and by the end of the night, the framework for Genentech was sketched out on the back of coasters. With just $500,000 in initial funding, Swanson got to work hiring brilliant young scientists attracted by the company’s ambitious scientific vision. In 1977, the original Biotech startup team succeeded in producing a human protein, providing proof of concept that laid the foundation for all that was to come.

Genentech’s early culture was described as one of “casual intensity”, where science came first, bureaucracy was kept at bay and the focus was on hiring the brightest scientists and empowering them. They offered an extremely attractive combination to these rising stars: the resources to tackle big problems, freedom to publish, merit-based credit for discoveries, stock ownership and very competitive salaries. The company’s leaders walked the walk, too - Boyer, for example, refused to put his name on a landmark insulin paper so that the young researchers who had done the work got all the accolades.

This scientific freedom was coupled with discipline and a clear orientation to results. If projects weren’t progressing, the team would tackle tough conversations about cutting their losses head-on, with data driving their decisions. By choosing practical targets with commercial potential like insulin and growth hormone, Genentech did better science. Clear, specific goals created an appetite for excellence that drove high-quality work. The company’s research team worked long hours at a punishing intensity to deliver, but they knew how to blow off steam too - Friday afternoon parties were common and everyone from the CEO to the lab techs would attend, chat and share stories.

Genentech certainly didn’t have things all their own way, however. After a triumphant IPO in 1980, they found themselves in the glare of public ownership with investors demanding concrete results, but Swanson kept the culture of the company focused on breakthrough science rather than the stock price, pushing the team to get products approved. In 1982, in partnership with Eli Lilly, the delivered Humulin, the first ever recombinant DNA drug, and in 1985 they launched Protropin under their own steam.

As the level of success increased, the eyes of big Pharma turned onto the California upstarts. In 1990, Roche agreed a deal to acquire 60% of Genentech for $2.1bn. Many feared that the culture would be crushed by the famously conservative Swiss giant. To their credit, however, Roche recognised that Genentech was a unique company and left them largely autonomous, a move that paid off with blockbuster drug after blockbuster drug: Rituxan, Herceptin, Avastin, Lucentis and Tarceva. Even since 2009, when Roche bought the remainder of the business for $46.8bn, Genentech has stayed distinctive, independent and centred on science. In fact, some insiders would say that Genentech has influenced Roche’s culture far more than Roche has shaped Genentech’s.

Genentech’s leadership decided early on that they would optimise the company’s culture for the brilliant scientists they felt were central to their success. It worked.

Who are you optimising for? And is what you’re offering what they really want?

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