Duke University Alumni Magazine

Engineering a Series of Successes
Jim Vincent
by Edward Prewitt

A career marked by abrupt changes in direction, but never by snap decisions, has taken an enterprising manager from the fields of western Pennsylvania, through the shoals of emerging technologies, and into the frontiers of current science.
ommencement addresses are notably short-lived. Most graduates would be hard put to remember even the name of their commencement speaker, much less the speech's message. So it was with some surprise that staffers at the Fuqua School of Business found themselves printing nearly 2,000 copies of the 1996 commencement address to meet the demand for transcript requests.

     The speech's title was "The Entrepreneurial Leader." The graduating M.B.A.s and their families and friends heard James L. Vincent B.S.M.E. '61 impart the ingredients of leadership--integrity, courage, and infectious passion--quoting Winston Churchill, Peter Drucker, Richard Nixon, and Theodore Roosevelt to make his point. Friends and admirers who read the transcript on subsequent days say that the speech, in its forceful presentation, its comprehensiveness, and its logical rigor, is vintage Jim Vincent--right down to the quotations. His speech has proved popular, they say, because it reflects his philosophy of success and his remarkably successful business career.

     That career, marked by abrupt changes in direction but never by snap decisions, has taken the fifty-seven-year-old Vincent from the farms and football fields of western Pennsylvania to the frontiers of current science. His many jobs have included (in 1960) dorm proctor for 200 freshmen in Duke's House H and (today) chairman and chief executive officer of Biogen, Inc., a biotechnology firm employing 750 in six locations around the world. Yet all his roles have constantly incorporated the theme of leadership.

     Vincent regularly jokes that the average I.Q. in the building plummets when he walks into Biogen's research headquarters in Cambridge, Massachusetts. In reality, he is a student of management theory who trades reading lists with a Nobel laureate. And in all likelihood, Biogen--a pioneer biotechnology firm started by some of the world's brightest researchers and backed by investors with gobs of money and justifiably high expectations--would not be around today if it weren't for Vincent.

     He came to Biogen in 1978 after a storied management career. The appointment was for him the fulfillment of a long quest: to become leader of a large company. Yet many observers thought then that both Biogen and Vincent had gotten it wrong--that the new CEO, highly reputed as he was, couldn't rescue a firm as far gone as Biogen; and that Vincent, who had left the number-two position at one of the world's largest companies and was in great demand elsewhere, would see his triumph blow up in his face. Perhaps Vincent's legendary capacity for making the right decision had finally run dry.

     It was indeed a very near thing, Vincent says today. In 1981, his third year at the helm, Biogen avoided bankruptcy by a hair's breadth --twenty-four hours. Had investors held out on him for one more day, the company would have gone under. "I never want to come that close again. We damn near didn't pull it off," he says. But the strategy worked, the plan moved ahead, the decision again proved the right one.

     That Biogen had slid so far from its prominent, promising beginning is testimony to the uncertainty of the science of biotechnology. It also confirms the value of professional management. "Biogen and all of these biotech companies were started by entrepreneurs who were scientists," says Moshe Alafi, a well-known venture capitalist who was involved in the founding of several major biotech firms, including Biogen in 1978. "But none of the scientists knew how to run it." Or, as one of Biogen's founding scientists puts it, the company's excellence in science did not extend to its management. In 1985, "We were in disarray, languishing, taking on water, losing a lot of money," says Phillip Sharp, a senior biology professor at the Massachusetts Institute of Technology and still a member of Biogen's board of directors. "We'd had significant resources but were quickly using them up....The decision was made to find someone who had strong business acumen and a record of growing a business. We were looking at a whole lot of things--one of the main things was broad experience in management."


     If anyone could be said to be a specialist in the practice of general management, that was Vincent. Only forty-five years old in 1985, he had already been a fast-track manager at Bell Telephone Company of Pennsylvania, had led Texas Instruments into Germany and East Asia, had founded the diagnostics division of Abbott Laboratories, building it into the largest diagnostics business in the world within just a few years, and had been one of the top officers in conglomerate Allied-Signal Corporation. In the process, he had moved from Philadelphia to Dallas to Munich to Tokyo to Phoenix to Chicago to Short Hills, New Jersey, before heading to Boston with Biogen. "I have trouble keeping a job," Vincent jokes. In fact, his numerous moves followed a logic and career path that he settled upon as early as his days at Duke.

     Vincent didn't arrive at Duke dead-set on the executive suite. His original interest centered on its football team. Blue Devil football was a perennial national power, the equivalent of basketball today. Recruiters couldn't miss a 285-pound high-schooler from Somerset, Pennsylvania--in the football hotbed of the country--who could run the 100-yard dash in eleven seconds. What's more, Vincent was a good student, whose parents had drilled into him that he would be the first family member ever to complete college. Duke offered the perfect combination of high-level football and strong academics. He started getting letters from Duke as a sophomore and, by the time he was a senior, had made a few campus visits to Durham. When an athletic scholarship was offered, he jumped on it.

     But injury intervened. In his senior year in high school, he separated his shoulder a dozen times, badly enough that he sometimes had to be anesthetized and carried off the field. A lesser fanatic would have hung up his helmet, but Vincent "lived, ate, and slept football," he says, and so was determined to play on. Fortunately for his future health, Lenox Baker, the head of the orthopedic division of Duke Medical School's department of surgery, was an avid football fan and an honorary team mascot--which gave him credibility in Vincent's mind. Baker examined Vincent and then told him of the different surgical procedures that would allow him to continue football. None of those options left it likely that he would have use of his shoulder beyond his forties. The night after that stark report, he walked around the streets of downtown Durham until nearly dawn. "It was the biggest decision of my life to that point, to my perspective," he recalls. He decided to quit football.

     But Vincent had an athletic ace up his sleeve: He threw the shot put well enough to receive offers of track scholarships from several other schools. He had already fallen in love with Duke, however, and paid his way to Durham. He did make the track-and-field squad--as the other freshman residents of House O learned late one night when Vincent rolled a shot put down all three flights of stairs. The advanced hour was typical for "Vince," remembers classmate Lee Seybert '61. "When everyone else was going to bed, Vince was just getting started. We called him Captain Midnight," says Seybert, who jokes that even today he congratulates Vincent if he telephones before midnight.

Biogen teamwork: creative management meets innovative science

     By his own admission, Vincent was not a terribly serious student during his freshman and sophomore years. Organizing cabin parties and serving as rush chairman for Delta Tau Delta fraternity consumed more of his interests. Consequently, he was a solid-C student, "even as I was telling my parents I was working my tail off," he says. But near the end of his sophomore year, he says he began to think about the future. Aptitude tests had pinpointed his best career bet as patent attorney. He followed this plan, even deciding on a major in mechanical engineering so that he could be conversant with product designers, until he spent a fateful day in the summer after his sophomore year observing a practicing patent attorney.

     With that occupation out of the question, Vincent next eyed a business career. He was influenced in this by his father, a successful entrepreneur in the electric golf cart industry --a company the younger Vincent had helped build. He decided to take the prestigious Fortune 500 firm route. That meant business school, which required good grades. Vincent's C's quickly became straight A's. After graduating from Duke, and pausing to marry Betsy Matthews, his sweetheart since the fifth grade, he entered the University of Pennsylvania's Wharton Business School.

     At Wharton, he met management theorist Peter Drucker, then a visiting professor. Drucker was not as famous as he is now, "but it was very clear to me that he was a deep thinker," says Vincent. "He turned me on to what business is all about." After earning his M.B.A. in 1963, he put his nascent business and leadership philosophy to work at Bell Telephone of Pennsylvania. He employed the feet-first method of discovering if he had leadership skills, asking to be sent where he would most quickly be put in charge of the largest number of people. In a short time, he was heading Bell's South Philadelphia unit, supervising the lowest-productivity workers in the company. "It was a very broad group," he says. "That's what I was looking for, to find out could I do it, and did I enjoy it." The answer was clearly "yes"; he soon turned the unit around and into a high producer.

     In 1965, Vincent jumped to Texas Instruments, an emerging company with a promising niche in the new technology of semiconductors. It was his first but not final foray into high-tech. Even at age twenty-five, "it was pretty obvious...that Jim had a purpose in mind to at some point be chairman of a major operation," recalls Jay Clifton, a TI colleague. When it became clear that the heads of the equipment side of the business, rather than Vincent's semiconductor side, were in line to take over leadership of TI, he made a career move so striking in its simplicity and yet so unusual that it could be called unique. He quit TI and spent a year gainfully unemployed, starting with a blank sheet of paper and reviewing various industries and companies in exhaustive detail in search of the right combination of personal and technological opportunity.

     He decided that health-care manufacturing --a very different business than semiconductors--best fit the bill. He targeted Abbott Laboratories, a midsize Midwestern pharmaceuticals firm, as the place to make his mark. Abbott was then a staid suburban company with a solid if unremarkable line of pharmaceuticals and a mediocre cadre of managers. "I think he picked Abbott because we didn't have a whole lot of outstanding executives," says then-CEO Ted Ledder. "I'm not sure I hired him as much as he hired us!"

     One of Ledder's first tasks for the aggressive new guy was to decide whether to sell or shut down a small, failing radiopharmaceuticals business. Vincent's recommendation was neither. Instead, he wanted to take charge and remake it into a medical diagnostics operation. "Here's this thirty-two-year-old guy running this division, saying, 'We're going to set the standards in the industry,' " recounts Irvin Smith, who was a scientist at the company when Vincent became president of the diagnostics division. "He's not from pharmaceuticals, he did not fit the mold.... People just rolled their eyes and said, 'Yeah, right.' " But Vincent was right. Within a few years, he had built the diagnostics division into a juggernaut--an accomplishment considered one of the great success stories of the pharmaceuticals industry. Diagnostics remains Abbott's largest and most profitable business.

     To this day, Vincent considers the leap from semiconductors to medical diagnostics in 1972 his "major gear shift." His experience with Abbott set the stage for future career changes. It also proved that he could manage a scientifically oriented firm without knowing much initially about the science. "I had to do a lot of studying," he says. But "if you develop management skills and if you're technologically literate, you can come up the learning curve.... You don't have to become a scientist; you have to train yourself so that you're a full participant at the resource allocation table."

     A key to his success within Abbott would seem to be the creation of a corporate culture within a larger, very different culture. He became known for calling his managers into late afternoon meetings that would continue until the discussion topics were resolved. Often that hour was past midnight. "The world of Abbott--which was a nine-to-five outfit if there ever was one--was just shocked to see lights burning after dark," recalls George Rathmann, who worked for Vincent at Abbott in launching his own successful biotech career. With typical Vincentian focus, "The only food he'd bring in was vending-machine stuff. He'd pile bags of potato chips up in the middle of the table and say, 'Let's keep going.' I guess it was to keep people focused on the agenda. But what was most amazing was that no matter how many times we had these meetings, they weren't a trial--because somehow Jim kept them moving along."

     Although Vincent pushed his managers at Abbott and elsewhere to match his ninety-hour weeks, many of them paradoxically characterize him as highly sensitive to people's personal needs. "A lot of times people who don't know him think he's a hard-ass and doesn't give a damn about people. It's really exactly the opposite," says Smith, who was at Abbott during Vincent's tenure and was later recruited to Biogen. "He's very interested in people and their leadership potential. He has a sort of sixth sense about people." That intensity and interest in the people he hires led to Abbott's creating "the strongest group of managers I've ever seen," says Rathmann, who left the company to cofound Amgen, by far the most successful firm in the biotechnology industry.

     Ledder cherished Vincent's diagnostics group, which became famous industry-wide as the ADD--the After-Dark Division. Vincent moved swiftly up the corporate hierarchy, becoming a member of the board within five years and the company's chief operating officer within two more. He was poised to become head of Abbott, but Ledder, ready to retire, decided that Vincent needed a few more years' seasoning. In 1980, he appointed another man as CEO, intending that Vincent succeed him down the road. That plan fell through, however, when Vincent clashed with the new CEO and decided that his future lay elsewhere. In 1982, he joined Allied Chemical Corporation (soon renamed Allied-Signal) as president of its Health and Scientific Products Company.

     It was another bold career move, but characteristically, it was done with extremely careful research and forethought. Vincent balanced his still-bright future at Abbott with his impatience to climb the corporate mountain. He formed a remarkable cabal of other number-two managers at major companies around the country to whom he could turn for contacts and advice. He considered other industries--among them, biotechnology.

     Biotech had gotten under way with great fanfare in the late Seventies, but within a few years several of the first firms saw a need for professional management. Two of those companies, Cetus and Genetics Institute, interviewed Vincent in 1981 for high-level jobs. He found both options attractive; he and Rathmann had already identified biotechnology as having great promise (and had even discussed founding a biotech division to boost Abbott's pharmaceuticals portfolio--a move that could have changed the shape of the industry).

     Rathmann went on to become probably the most famous individual in the biotechnology world. But Vincent remained focused on building his leadership potential and the experiences necessary to round out his management knowledge. "I wanted to have a big-company experience," he says. Allied-Signal was certainly that. Already a $6-billion company when he arrived, it was growing rapidly. Vincent's charge was to build the health-care business into half of Allied-Signal's revenues. Before he got too far, however, the company acquired Bendix Corporation in a famous merger battle. Vincent considers the Bendix purchase a good decision for Allied-Signal, but it left no money for health-care acquisitions. "So I said, sell it off and let me get on to something else."

     This time, he was "mentally primed," he says, to enter the industry that had earlier attracted his notice. By 1985, Vincent had concluded that biotechnology would reshape the giant, consolidated pharmaceuticals industry just as semiconductors had done for the electronics industry fifteen years earlier. He was also attracted by the power of the science, which was producing new drugs and medical advances by the month. When Biogen came calling, Vincent stepped up to the chairmanship and the CEO position he had sought for so long.

     The reaction among observers was mixed. Many viewed Biogen as a lost cause and a career black hole. "You would have bet that Biogen wouldn't have been around in five years," says Irvin Smith, who later joined Vincent at the company. Vincent admits that "Most people thought I was crazy. Most people thought it couldn't be done." Others, however, put their money on the irresistible force. "I was in the Salt Lake City airport and I picked up The Wall Street Journal and read that Jim had been appointed chairman. I called my broker. I said, 'I don't know anything about Biogen, I don't know its symbol...but buy a thousand shares and sell them when they've doubled,' " says Jay Clifton.

     But the small boost the company's stock received from Vincent's friends was more than offset by the $35 million a year Biogen was losing, a figure fast rising to $50 million. So much cash and credibility had gone down the drain without apparent results that Wall Street had completely lost faith in the company. Rumors circulated that a takeover was in the works. Several senior scientists and managers left the firm. It was perplexing to many investors and observers how Biogen, with its tremendous scientific and financial endowment, had taken such a fall. Part of the answer lay in the nature of biotechnology. Never before had there been an industry with such long product-development cycles or such huge investment required for viable products. "We all thought when we cloned interferon [a human protein that was the first commercially viable substance produced by biotech firms] in the late Seventies, we could make it and that was that," says Alafi, the venture capitalist so involved in the start-up of the industry. "Little did we know it would take six to eight years and $100-150 million to achieve any project."

     Still, Biogen was eight years old when it turned to Vincent, the only person seriously considered for the lifesaver position, according to Phillip Sharp. Where were the commercial products? In fact, the company had developed alpha interferon and gamma interferon, both initially promising as cancer treatments; a hepatitis B vaccine; human insulin; and several other products, and had licensed them all to drug companies for marketing and sales. But the royalties from these licenses weren't bringing in much cash.

     At the same time, Biogen's expenses were out of control. The company was supporting duplicate organizations, in essence. It had replicated its Cambridge facilities with a second headquarters in Geneva and research offices in Zurich and Brussels. The European operations gave Biogen an international identity, but they were also "a two-headed monster," Alafi says. "Not only were they very expensive, but they could have been competing against each other."

     Against this tide of difficulties, it seems surprising that Vincent thought Biogen salvageable. His optimism, in fact, was one of the things that impressed Sharp. "I was interested that he thought there was a real possibility. He felt there was a real core value in the science. He thought there was a problem with the management core...but he wanted to make a go of it," he says.

     Moving on multiple fronts, Vincent methodically began to reshape the company. He shifted the research strategy to focus more sharply on products with high commercial potential. At the same time, he greatly increased the value of Biogen's existing product line by shrewdly renegotiating the licenses granted to other firms. Total royalties from product licenses brought in a trifling $1.7 million in 1986; a decade later, that figure had bloomed to a phenomenal $150 million for much the same wares. Vincent also sold or closed the European facilities, including the second headquarters, and cut the number of employees in half, from 450 to 220. While these moves obviously lowered costs, they brought with them a great risk that the company would simply implode. A scientific firm like Biogen "needs the best of the best of the brightest. But those people don't want to be with a loser," he says.


     What Vincent did not do during his first few years at Biogen was as notable as this array of activity. "Two years in, people were saying, 'He hasn't done anything. He hasn't eliminated the burn rate [the amount of R&D; spending before a product reaches commercial viability], he hasn't brought products to market,' " Rathmann says. "In fact, he was very visionary, very strategic."

     What Vincent sought to do from the start was build a company that could develop and make drugs while surviving on its own. "A lot of people were convinced I was going to do a quick turnaround and then sell it off and make a bunch of money," he says. "My sole goal from the day I walked in was to build a fully integrated, independent pharmaceuticals firm."

     The most crucial step toward that goal--even more than reestablishing the company's profitability in 1988--was building a new management team, Vincent says. He is extremely careful in hiring. "Jim works very hard trying to gain insight into the growth potential of people," says Sharp. "I've never seen anyone interview people so intensely. A day and a half of very serious discussion with him is not unusual when he's interviewing you for a job." In turn, Vincent attracts very talented employees, Rathmann says, and he is very comfortable delegating authority to powerful subordinates.

     The goal of a biotechnology company, of course, is to produce pharmaceuticals and other substances through genetic engineering. By 1991, royalty income from Biogen's drug licenses had filled a war chest sizable enough to fund development of new drugs. Biotech research is akin to wildcatting for oil: Huge amounts of money can be sunk into a promising venture that turns out to be a dry hole. Vincent learned that lesson firsthand in 1994.

     The lead product in Biogen's drug pipeline was an anticlotting factor derived from a natural protein in leeches. Dubbed Hirulog, the substance performed extremely well in early clinical tests, leading to optimism in the executive suite and a big gain in Biogen's stock price. But in subsequent clinical trials, Hirulog turned out to be only marginally better--and a lot more expensive--than a competitor's drug already on the market. Despite having sunk an estimated $150 million in Hirulog, Vincent abandoned development. In the health-care market of the Eighties, he would have gone ahead with the drug, he says, but in the cost-conscious Nineties, Hirulog fell short of his criteria for profitability. "It's a huge decision--you lose sleep for many nights over that, thinking about how your stock will drop, about whether your other products will also fall through," Alafi says. "There is nobody else in the industry who would make that decision. But he had the guts to do it."

     With Hirulog gone, Biogen was left with one promising product in its pipeline. Interferon beta-1a, which the company named Avonex, had been effective at treating the relapsing form of multiple sclerosis in clinical tests. In 1995, Vincent submitted Avonex to the U.S. Food and Drug Administration for approval. Then, while he was waiting, he rolled the dice. Wanting to be able to roll out sufficient supplies of the drug if it received approval, he decided to hire fifty salespeople and build a $50-million manufacturing plant in Research Triangle Park.

     "You take a hell of a risk building a plant before final FDA approval," says Ted Ledder, the former Abbott CEO. But the gamble paid off; Avonex received approval last July--just a few weeks after Vincent had delivered the commencement speech at the Fuqua School, in which he told the assemblage that a key quality of leadership was "a willingness to take reasonable risks, little fear of failure, and the courage to dare."

     Vincent's decision to build the Avonex manufacturing plant in RTP touched off a wave of criticism and anxiety back in Boston. Vincent was publicly chastised for being disloyal to Biogen's home state. The Boston Globe ran a lead story on whether Massachusetts was being beaten out economically by North Carolina. Vincent has no qualms about his decision, saying that it's a lot easier to do business in RTP than Cambridge. "I just appreciate those people--North Carolina political and economic leadership--so much," he says. "Regardless of political differences, they make things work. The train runs on time."

Biogen at Research Triangle Park: Vincent's goal, "a fully integrated, independent pharmaceuticals firm."
Photo: Rick Alexander & Assoc. Inc. © 1996

     Not all of the North Carolina-Massachusetts traffic in biotechnology investment has been in the former's favor. In 1982, Duke was offered $100 million to build and fund the Whitehead Institute for Biomedical Research. The gift would surely have propelled the university to the front rank of that burgeoning science. But a campus controversy ensued when it was reported that the Whitehead family intended to exercise an unusually high degree of control over appointments at the center. The family quickly withdrew its offer from Duke and gave funds to the Massachusetts Institute of Technology, which apparently had no qualms about the level of donor control.

     Today, the Whitehead Institute's building sits adjacent to Biogen's headquarters. "That would have been incredible if Duke had landed the place," Vincent says. The Whitehead center "is world renowned for its research." Still, Duke is stronger in biotech research than is commonly known. Although the university has no reputation in bench science of the sort that the Whitehead Institute conducts, Duke is highly reputed in the biotech industry for its clinical expertise in testing potential drugs emanating from biotech laboratories. San Francisco-based Genentech, the worlds oldest biotech firm, has long been involved with Duke's clinical research.

      Vincent has spent a fair amount of time at Duke during the past few years. His daughter, AimŽe, graduated in 1991, followed by son Christopher, who finished in 1995. Their choice of college was predestined, according to Jay Clifton, who says that in the thirty years he has known him, there was never a doubt in his mind where Vincent wanted his kids to go to school. Named to Duke's board of trustees in 1994, he chairs its athletics committee and is a member of the building and grounds committee. He is a former trustee for the University of Pennsylvania and is still a member of the Wharton School's board of overseers.

     Former Fuqua School dean Thomas Keller met Vincent during one of his visits to campus a few years ago. Keller, who was extraordinarily successful in building the Fuqua School over twenty-two years, credits Vincent with imparting several valuable ideas on management and leadership. "He's a very thoughtful guy who takes in an awful lot, screens it, comes to definitive conclusions, and doesn't waffle," he says. Keller was keen to draft Vincent for the business school's board of visitors. "I kept saying we need to get all of his time and leave none for the University of Pennsylvania," he jokes, "but the university felt he was doing enough." Instead, Vincent turned the tables, persuading Keller to join Biogen's board last September.

     Keller's was among the many dropped jaws when Vincent announced in mid-February that he was stepping down as Biogen's CEO, well before the normal retirement age. Vincent says his handpicked successor had proved qualified, and it was time to move on, both for Biogen's sake and his own. "The business reason is intuitive," he says. "If you run a business for ten to twelve years, especially a high-talent organization, refreshment of management is really important. The personal reason is that I want to do one more thing in my life."

     Keller admits he was "surprised and a little shocked that [Vincent] was going to step down at this time. I certainly expected him to be there when I joined the board.... But Jim has been known to make changes in direction." What that new direction will be is uncertain, however. "I don't know what it is," says Vincent, who will remain chairman of Biogen. "I'm going to focus on that when I have time."

     One course that many people have suggested to him over the years is government. A Republican, Vincent has strongly held conservative views. He flatly rules out elective office, but says he would consider an appointed post with a high level of authority and seniority. "I have no ego drive to do that," he hedges. "So many people have 'Potomac fever.' I would consider that probably a terrible trial. But if I was in a position where I could make an impact, I'd seriously consider it."

     Keller says Vincent would be well-suited as a university dean or even president. "There are a lot of similarities between running a biotech company and a university," he says. "I would think he would be very effective. Although I don't know that he would be happy in a number-two position like dean. I think Jim enjoys being in the position of a decision-maker."

     Perhaps a university would be a good fit, says Vincent. Perhaps not. Having achieved his career aspirations, for once in his life he is free to let life come to him. The man George Rathmann calls "an extremely intense, extremely methodical thinker and planner" seems happy to not have to plan.

     "There's no dream in my mind that says, 'I want to be...,' " says Vincent. "I feel like a very lucky man. I've had a lot of help from a lot of people. When you start in western Pennsylvania where I did--from a very provincial part of the mountains where not many people get out of that--and you end where I did...I feel so fortunate that I've been provided these opportunities. Now I have time to have one more impact in my life. I'm going to let it get a lot more up close before I see what it is."                                                                           

Prewitt '85 is associate editor of Northeastern University Magazine in Boston

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