Pharma giant Novartis has been on a tear. CEO Vas Narasimhan told us how wearing jeans to work is helping transform the Swiss company.
- Vas Narasimhan took the reins at Novartis early last year and has pushed to transform the Swiss drug giant into a cutting-edge, tech-savvy company.
- And it's been working, Narasimhan told Business Insider in a Thursday interview, pointing to strong second-quarter financial results reported that day.
- Culture has been a big push at Novartis, which the Swiss drug giant tracks via tech platforms and plenty of data.
- "I'd like to believe over time we'll keep showing that culture drives performance and culture drives innovation," Narasimhan said. "And the cultural transformation of Novartis will keep us at the cutting edge for years to come."
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The goal was to reshape the Swiss pharma giant into the premier maker of cutting-edge new medicines, all powered by data and technological capabilities. Oh, and also to transform the culture, push towards productivity, and build trust with society.
So far it's working, though it'll ultimately be a five-year journey, Narasimhan told Business Insider, citing the company's strong financial results so far this year. After Novartis reported second-quarter earnings on Thursday, increasing its 2019 sales expectations and reporting growth in its second-quarter core operating income, the stock jumped, extending its climb this year to 26%.
"I've been pleased with how far we've come in 18 months," he told Business Insider on Thursday. "I wouldn't have expected we would have gotten as far as we have with what we call our 'curious, inspired, un-bossed culture.'"
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Narasimhan started as CEO in February 2018, after leading Novartis's global drug development and serving as chief medical officer. A Harvard-trained physician, the 43-year-old Narasimhan is the youngest CEO of a major drugmaker.
He has emphasized the idea of employees being 'unbossed' and accountable to make decisions, as well as a more informal, jeans-wearing culture. When Business Insider spoke with Narasimhan by phone on Thursday, he reported that he was wearing jeans, including to a television appearance on CNBC.
Under his leadership to date, Novartis has done major acquisitions, like of gene-therapy biotech AveXis, while letting go of less-important businesses like the eye-care unit Alcon. The company also exited a consumer healthcare joint venture with GlaxoSmithKline. All told, the shift has included more than $60 billion in deals.
Novartis has also sought to put other parts of its history behind it, like a government lawsuit alleging that the pharma giant paid lavish kickbacks to push its drugs, which the company just allocated $700 million to settle.
Changing a culture armed with jeans, technology, and lots of data
Drug companies, especially large ones, are famously bureaucratic and slow-moving. That's important when your work is to make life-changing medicines, but it can challenge things like innovation and uptake of new technologies.
A crucial part of transforming a big, global company like Novartis has been shifting the culture, Narasimhan says.
"And I'd like to believe over time we'll keep showing that culture drives performance and culture drives innovation," Narasimhan says. "And the cultural transformation of Novartis will keep us at the cutting edge for years to come."
Narasimhan says he's seeing that push for a more comfortable work environment play out on external and internal social media platforms.
One example is Microsoft's Yammer platform, which Novartis uses internally and has had "huge engagement from the executives down to the lowest levels of the company, which creates a tremendous energy and buzz," he said. "And we're trying to really reach and get the organization to believe the culture leadership journey that we're on."
But he also described leadership as the company's biggest challenge. Novartis employs more than 100,000 people worldwide, including 15,000 managers.
Each has to "learn that they create a micro-culture wherever they lead," Narasimhan said. "If people perceive a great climate overall at the company but at the little place where they are in the company they feel something very different, that's a frustrating experience. And so that will take time."
The Swiss drug giant has employed data and technology toward that ambition, measuring both manager and company performance with heavy use of system called Glint, owned by Microsoft's LinkedIn, where individuals can see how they score on different parameters as compared with average managers at the organization.
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