Nancy Hutson is a whip-smart, outspoken 55-year-old biologist who joined Pfizer Inc. as a research scientist in 1981. She spent the next 15 years in drug discovery at Groton Laboratories, and put 35 medicines into development at a total cost of billions. Despite all that time and money, not a single one of Hutson's new-drug prospects ever made it to market. Nothing that she touched, in other words, was a success.

So has Hutson found another line of work? Is she, perhaps, a biology teacher? Or maybe a consultant, that ultimate refuge for someone with a record of relentless commercial failure? Hardly. Since 2000, Hutson has been senior vice president of global research and development at Pfizer and the director of Groton Labs, the largest drug-discovery facility on earth. And before that, she held a series of increasingly important management posts at Pfizer's Central Research Division.

Hutson's ascent in the face of what would be, by the standards of most other industries, a catastrophic series of disappointments, tells you a lot about the rarefied world of pharmaceutical R&D. Drug discovery is a costly slog in which hundreds of scientists screen tens of thousands of chemicals against specific disease targets. After a remorseless round of testing, most of those compounds will prove to be unstable, unsafe, or otherwise unsuitable for human use. Pfizer spends $152 million a week funding 479 early-stage, preclinical discovery projects; 96% of those efforts will ultimately bomb. In today's show-me-the-money corporate world, drug labs like Groton may be unique: Because drug-development projects are parsed out over years and sometimes even decades, and because their rate of attrition is so horrendous, these labs are prisms through which conventional notions of success and failure get stretched and squeezed into strange new shapes. They're also a world in which many of the typical emotional incentives for coming into work each day--the chance to be part of a winning team, to launch a hit new product, to beat a sales target--simply don't apply.

Any business that's developing new products or tackling new markets--any business worth its salt, in other words--faces setbacks; they are the price of ambition. And we're all exhorted to dare to fail. Still, the assumption is that our defeats will be only occasional setbacks--instructional blemishes on our otherwise untainted records of success.

Pfizer's drug-development efforts are failure at its most extreme, and they demand persistence at its most heroic. Want to know how to motivate people to take on almost impossible odds, and then how to lead them through disappointment and loss? Ask Hutson. Drug discovery's high-risk, high-reward model means that she must steel both herself and her talented and ambitious researchers for lifetimes of chronic futility. "As leaders, a big part of our task is to keep the best and brightest minds in research connected to the mission," she says. "At the same time, we have to help them understand that only a tiny minority of them--over their entire careers--will ever touch a winning drug." Within Pfizer, in fact, the scientists who have actually invented a successful compound are viewed as near-mythic figures because there are so few of them. And for the rest? "We have to lead them through failure," Hutson says.