the Internet revolution was big, the biotech era will be colossal.
The link between test tubes and MBAs may seem unusual, but
Kellogg's new biotechnology major will create management leaders
to propel this emerging industry towards its utopian -- and
by Matt Golosinski
John Morrison Photography
Professor Alicia Löffler
is already on the tip of her tongue. It's what everyone wants
to hear, and during her five-year tenure as director of Northwestern's
Center for Biotechnology (NUCB), Alicia Löffler has had hundreds
of conversations where this word served as a springboard for
discussion and debate. She knows it can also serve as a communication
barrier if she doesn't address it -- and its ethical dimensions
-- before explaining the complexity of her branch of the health
and agricultural industries. A branch that may ultimately
redefine what it means to be human.
she says, smiling and waving her hand in playful dismissal
of something that's grown rather tiresome because of misunderstandings
raised by its garish sci-fi connotations. In fact, The Clones
might be a college-rock band whose antics, while amusing,
have devolved through familiarity into tedium.
yes, everyone wants to know about the clones," says the affable
Löffler, who retains the accent of her birthplace, Argentina."It's
perhaps not all the reports of miraculous and terrible medical
wizardry are true, but Löffler admits biotechnology really
will produce cloning on a large scale in the next couple decades.
Any ethical questions, she suggests, should be contemplated
in light of the magnificent potential boon that biotech will
bring to humanity.
to cloning, infertile couples will be able to have children.
Doctors will tinker with the genetic material of embryos to
select for desirable traits, or eradicate any abnormalities
detected. From stem cells, scientists will grow replacement
organs for ones that wear out from use or illness. Cancer
tumors will be controlled through gene therapy. The human
life span itself will enjoy significant extension -- perhaps
indefinitely, one day.
biotechnology we will be able, for the first time, not simply
to treat disease but to cure it," promises Löffler, who also
emphasizes the potential of genetically engineering crops
to dispel the spectre of world hunger (as long as distribution
channels are not blocked).
what about those nightmare scenarios seemingly cobbled together
out of X-Files reruns?
receives only fragmented information about biotechnology that
leads them to magnify its negative aspects," says Löffler,
a microbiologist by training who holds a doctorate in the
subject and a post-graduate in biochemical engineering.
field is to bring to humanity the prosperity she believes
it can, there are two things that biotech must absolutely
get right: ethical oversight and public transparency. Disregard
either one, and people will grow suspicious and frightened.
are only a couple of the challenges facing an industry unlike
any other, an industry that Ernst & Young reported doubled
in size between 1993 and 1996, and one that remains poised
to explode with activity. In addition to the obvious risks
associated with biotech -- the sector is heavily regulated
and products can take years and $500 million to bring to market
-- a diverse workforce comprised of professionals from fields
as disparate as computer science and biology demands extraordinarily
talented managers to oversee the complex business.
where Kellogg comes in.
John Morrison Photography
Professor Joel Shalowitz
a nice MBA like you doing in a place like pharmacogenomics?
has quickly repositioned itself to meet the demand for managers
to navigate this brave new business world. In June, Dean Donald
Jacobs approached NUCB with a proposal to combine programs
under the Kellogg umbrella and thereby set the standard for
all other schools. A deal was soon hammered out and a curriculum
14-course major will launch in fall 2001, as will a parallel
biotech program designed to meet the needs of Kellogg's Executive
Education clientele. A field research component similar to
TEK Venture is also in the works to provide students with
a hands-on experience. Jacobs is frank about the business
school's approach to innovation.
have said -- correctly, I think -- that Kellogg turns on a
dime," notes Jacobs. "We are always chasing change. Our biotechnology
initiative is an attempt to beat the wave, to be there as
the wave crests, instead of chasing it. Biotech is the next
big opportunity that will demand our interaction, causing
us to change. We'll be there early."
between the scientific world of biotechnology and that of
the typical MBA student may initially seem unclear, but upon
consideration the marriage appears far less strange.
is all about making products," explains Löffler, who will
remain, despite the move to Kellogg, in the leadership position
at the Center she has occupied since 1995. "It's an industry
that's highly entrepreneurial and moving extremely fast. When
you move that fast, the traditional business models break
down, so you need to develop new ones."
Löffler suggests that traditional managerial models fail to
address the complexity of the biotech industry, which includes
a broad variety of endeavors from agribusiness to medicine.
"It took us a long time to realize that biotechnology is an
information science," adds Löffler. At its heart, she says,
biotech is about DNA and DNA is about information and how
it is communicated. Having managers who not only understand
these technical details, but know how to raise the extraordinary
capital demanded by biotech and who, further still, can address
the complicated PR issues surrounding the industry requires
a turbo-charged MBA. Old-school business paradigms, says Löffler,
simply cannot keep pace with biotechnology¹s dynamics.
the business challenges biotech presents to managers, contend
Löffler and Joel Shalowitz, M.D. and professor of health industry
management, is an industry heavily grounded in technology,
but also one that is ethically charged and populated by engineers,
scientists and physicians. The new major will offer a range
of courses from different departments that prepare students
to address these challenges.
will require no laboratory work, although one important goal
of the major is to familiarize students with the lexicon and
concepts involved in healthcare's cutting-edge. Classes will
emphasize, among other things, public health policy, entrepreneurial
finance and intellectual property strategies.
¹82 points out that biotech does not exist in a vacuum --
somebody has to use and pay for it. Unless health industry
managers understand who the product's customers, users and
payers are they will not fully appreciate the range of biotechnology,
or the sophistication of Kellogg's biotech major.
Shalowitz says that while many of the technologies that helped
engender the Internet have also enabled biotech, there exist
significant differences between the two sectors that some
students do not always appreciate.
business models in biotech can be very different than those
in e-commerce," especially the intellectual property issues,
explains Shalowitz. "On the Internet, people are talking about
IP relative to business methods, to formatting on a screen.
In biotech we encounter actual manufacturing issues -- specific
genetic coding issues."
Associate Dean for Academic Affairs, Dipak Jain, appreciates
the distinction Shalowitz raises. "Marketing of biotech products
and services is going to be challenging," notes Jain. "Our
biotechnology curriculum has courses that will cover these
Zajac, Kellogg professor of health industry management, agrees
that its complex structural dynamics make biotechnology an
industry that places special demands on the managers who lead
it. He highlights yet another complication.
of rapid scientific discovery has important business consequences,"
says Zajac. "No one biotech firm has the R&D capabilities
and financial resources to work in isolation. As a result,
biotech is significantly shaped by strategic alliances between
biotech firms and between biotech and pharmaceutical firms."
courses such as Creating and Managing Strategic Alliances,
and Advanced Strategic Management, have proven especially
popular because of their ability to discuss the frameworks
for ensuring effective strategic adaptation to quickly changing
environments, especially in the health industry.
how to structure alliances, how to protect intellectual property
exchanges and how to manage these relationships is one of
the most important managerial challenges," contends Zajac.
John Morrison Photography
Saywell, R. Tyler Smith and Katie Arnold (all 02)
in the bottle
student response to the new curriculum has already been overwhelmingly
positive. There are plans underway to establish a Biotech
Club that will, among other initiatives, develop and organize
a Biotech@Kellogg conference scheduled for April 28, 2001.
Three students have been especially instrumental in working
with Kellogg faculty and administration to help shape the
club, as well as provide feedback on the new major. Katie
Arnold, Scott Saywell and R. Tyler Smith (all '02) express
optimism for the school's biotech program.
the Biotech Club to have more than 100 members," says Arnold.
"We believe this number to be realistic, if not conservative,
based upon the strong response from students during our petition
for signatures. We've been very pleased and excited with the
number of students voicing strong interest in the club and
biotechnology such a draw among students, explains Smith,
is partly the entrepreneurial possibilities associated with
the field, and partly the diversity of research disciplines
that must come together to build a successful biotech endeavor.
is compelling because of the enormous potential for therapies
and diagnostic tools," Smith adds. "There are tremendous commercial
opportunities far beyond human health. We've barely scratched
notes that because the industry is an exciting fusion of different
technologies and sciences, there exist special roles for MBAs
interested in biotechnology. While working at a biotech company,
Smith discovered that "being a good scientist does not always
translate into being a good manager." Many scientists, he
found, don't have the proper skills to manage a company. Yet
he claims that frequently companies will promote scientists
to oversee managerial roles within the organization, roles
better suited to b-school graduates.
the extraordinary R&D costs (as much as 54 percent of the
industry's capital gets funneled into development, according
to Löffler; IT by comparison spends seven percent) faced by
firms operating in this arena demand long-term investment
strategies, claims Smith. Companies will need to establish
and maintain ties to the investment community, specialized
knowledge that many scientists may not have been trained to
companies with the proper management skills and industry knowledge,"
believes Smith, "Kellogg graduates will be able to contribute
quickly to the industry, allowing companies to free up their
scientists to focus on what they do best."
division of labor, agrees Saywell, makes it possible for business
students to play leadership roles within biotechnology, regardless
of their previous academic training.
biotech is fundamentally based on science," remarks Saywell,
"many 'non-science' people shy away from it, leaving a demand
for well-trained managers. Kellogg has already proven its
expertise in entrepreneurship, technology, finance, healthcare,
strategy and marketing. We just need students with a basic
understanding of biotechnology [who can] apply this business
expertise towards the biotech industry."
John Morrison Photography
so often science produces an invention or discovery so startling
that it changes the way humanity thinks and lives. Particle
physics and computer science were last century's revelations.
Biotech will likely serve as this century's predominant disruptive
force, sending epistemological shockwaves through our culture.
the metaphysical and ethical considerations associated with
biotechnology, other important considerations will arise.
Even biotech's most ardent boosters admit there will be both
unintended and unexpected consequences related to advances
in healthcare. Even what seems an unqualified utopian victory,
for instance, may pose its own significant side effects.
controlling cancer or replacing diseased organs would result
in vast numbers of people living longer. But these advances
also mean society will have to find the resources --financial
and otherwise -- to support this super-aged population and
ensure its members remain a viable part of the community.
the economic point of view," agrees Löffler, "extending the
normal life span will pose challenges. But the speed of diagnosis
and treatment will be accelerated and something we take for
biotech develops into full flower depends on many variables,
including the prevailing attitudes of those in the medical
profession. "It's very simple," says Shalowitz. "From a physician's
standpoint they want to know 'what is it, and how am I going
to get paid?' The biggest obstacle to technology implementation
is whether or not physicians accept it. Obviously if something
is so overwhelmingly right that it becomes a standard of care,
it doesn't matter whether physicians accept it or not. But
if there's a choice of equivalent therapies, that depends
on physician acceptance."
technological advances bring with them additional questions
and challenges. As far as Löffler is concerned though, the
healthcare industry will undoubtedly result in longer, happier
lives for people. The era of biotechnology is one she has
long anticipated, and she is dedicated to sharing the possibilities
of the field with others.
is the best program in the country, and the first of its kind,"
Löffler reports. "Five years ago there were no others; today
there are 36. My dream has always been to build the best biotech
program in the world. Now, with Kellogg, I don't have any
excuses not to do it."