Good or just successful? The Belichick conundrum
By Erich Scheller
Erich Scheller is the Director of the TechAtlas division of RA Capital Management. Erich’s primary responsibilities are to drive internal and external strategic and diligence initiatives and oversee the workflow and professional development of TechAtlas Associates.
Image by Kieth Allison
September 7, 2021
Considering my firm and a lot of the industry I work for is based in New England, I may regret publishing this. But as a Steelers fan myself, I’ve strived to put aside my biases and am hopeful that the scientific community can examine the data and at least see how I came to ask this question:
Is Bill Belichick really a good coach?
There’s no doubt he’s a successful coach - if not the most successful NFL coach ever. But while success in football is measured by a scoreboard, truly great coaches embody other stellar qualities, too. Was it Belichick or Brady who really earned those Super Bowl rings? How does Belichick mentor his assistant coaches and players? Does he play fair? How does he react in the face of adversity?
The TechAtlas team at RA Capital, which I lead, debates issues like this all the time. But instead of coaches, we talk about CEOs. In biotech - an industry where companies live or die by the success of a lead asset - how much impact does a successful management team have? And more broadly, how should we define success? Is it a matter of stock price? The ability to drive an acquisition? Do your employees even like you as a person?
Anyone familiar with RA will know that we’re a data-driven organization. And not just when it comes to scientific and clinical data - we try to systematically organize and dissect most things when it comes to biotech.
So we were interested to read what a data-driven team at Stanford did to figure out whether past stock performance under the leadership of a CEO is predictive of how stock will continue to perform, as well as whether or not having an MBA matters.
The bottom line, somewhat surprisingly, is that the Stanford team observed no correlation at all between past and future stock performance (and having an MBA didn’t seem to matter, either). The analysis challenges the idea that advanced degrees and prior success can predict future success and calls the notion of the “Great Leader” into question.
As often happens at RA on a Friday afternoon, a colleague sent along this article to the firm with a discussion question: “Might this also be the case in biotech?”
This seemingly innocuous question gnawed at me for days while taking a road trip with my family, because in our constant effort to systematically make sense of the biotech space at RA, management teams are clearly an important, but complex and sometimes unpredictable portion of the equation.
You don’t need to look very long to find various industry lists touting the best CEOs in biotech. Even in our own day-to-day interactions, we might describe a management team’s previous experiences and successes as part of an investment thesis. But this is only marginally better than looking at Belichick’s record and concluding that he is the best coach ever. The real question is, can we look from the outside and determine whether or not a management team will be successful, or do we need to get into the weeds with them at the board level to see how they navigate life between value-driving catalysts?
Over a series of articles in RApport, we hope to dive into this question and find some data-driven truth around how to most effectively evaluate the human component of biotech, including whether or not a “Great Leader” would want to be described as such (or whether they have the humility to recognize how much of their success might rely on colleagues or circumstance). And as it did for me on that road trip, I hope an extension of my seasonally-appropriate football analogy will help set the stage (though it might cause an uproar here in New England).
From a data-driven perspective, Bill Belichick of the New England Patriots is a successful football coach.
Belichick has coached the Patriots to six Super Bowl wins and has an overall 311-148 win-loss record. A sure lock for the Hall of Fame!
But is he a good coach? Of that I'm less convinced, for a couple of key reasons. Let’s dive into some data and see how we can start drawing parallels to biotech CEOs.
Without Tom Brady as his QB, Belichick’s record is a terrible 61-72.
Those numbers would get you fired from any head coaching job. In fact, in his 20+ year career as a head coach, Belichick has only made the playoffs once without Tom Brady as QB (in 1994, as head coach of the Browns). Conversely, Tom Brady has only missed the playoffs once when playing a full season (2002).
In biotech, Tom Brady could be the equivalent of a drug so great that it could make any management team successful. But what does the data show regarding how that kind of asset is managed? How much can a blockbuster drug suffer under a subpar management team? Could Brady have had 10 Super Bowl wins coached by someone else?
Bill Belichick’s coaching tree hasn’t borne much fruit.
No assistant coach for Belichick has gone on to become a successful NFL coach. His assistants’ combined record is 208-296-1 (win-loss-tie). The one success in Belichick’s tree, Nick Saban, only worked under him for a year and then went to coach college football (quite successfully). Everybody else has underwhelmed. So based on the data, you could argue that Belichick isn’t great at training and developing future head coach talent. This also means he represents a Key Man risk to the Patriots - if he had to take a leave of absence tomorrow, would his assistants be able to lead the team to success?
At RA, we think a lot about the future leadership of the industry. Biotech is constantly changing - scientifically, politically, and economically - with highly specialized experts collaborating to balance those factors with running a company. But as those experts rise to the executive level, they must rely on resources and coaches that can teach them what they need to know. And most biochem PhDs aren’t taught how to run a business or raise capital.
Belichick and the Patriots have done their fair share of rule-breaking during his tenure.
To date, Belichick is the recipient of the largest fine ever handed out to a head coach ($500,000) for his role in “Spy-gate,” in which his team was found illegally taping other teams in direct violation of NFL rules. Let’s not forget the history of performance-enhancing drug abuse by Patriots during his tenure, or the whole “Deflate-gate” saga that cast Belichick in a poor light everywhere but New England.
The biotech equivalent of this would be data fraud, misleading investors, corrupt spending, and so forth. Such unnecessary risks compounded on top of the inherently risky nature of biotech can destroy careers and sink entire companies.
Belichick’s reputation probably isn’t doing him any favors.
Setting aside any association with cheating, many people just don’t want to work for a “Great Leader,” especially when it feels clear that person sees themselves that way. Not only can that be a difficult personality type to work with, but a “Great Leader” mentality can actually absolve others of their perceived responsibility and diminish performance.
Plus, if Belichick were to ever move to a different franchise - let’s say the Jets - it’s hard to predict what the impact would be on either team. If Belichick were as great a coach as he would like us to believe, the Patriots would fall apart and the Jets would be the new champs of the league. If not, the status quo would probably persist. But either way, his fans would continue to expect a lot from him, especially at first. I’d like to see what the Vegas bookies do in that situation, because it’s one that faces our team regularly.
Of course, all of these observations are made entirely from an outsider's perspective on Belichick. Having never been in a room with him, I cannot speak to what his leadership style is like in person, whether or not he can inspire his team and coaches to improve while leading them to success, or how he tackles adversity when games or situations go poorly (though the data without Brady suggests it’s not great). All I can see is that he is wildly successful if measured by his team’s overall performance, yet it’s almost impossible to decouple that success from Tom Brady. In my opinion, he’s not likely to leave the NFL better than he found it once he retires.
So this brings me back to the topic that we’ll explore over a series of pieces here on RApport. Can you predict a biotech management team’s success based on past performance? How do you weigh a management team's contribution in an inherently risky industry where even the best company can be derailed by biological failure? And what are other signs of a good management team, if success cannot be laid solely at their feet?
What do you think? Let us know on Twitter @rapport_bio or on our LinkedIn page.
