The Friendly Persuasion — An Interview with Fred Hassan - Pharmaceutical Executive

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The Friendly Persuasion — An Interview with Fred Hassan


Pharmaceutical Executive


Successful leadership depends on the larger context in which it is exercised. Can you identify some of the external challenges that confront today's CEO—and how they might be different than 10 or 15 years ago?



A key skill required of today's CEO is securing first-mover leadership in these new corridors of growth. The CEO and his team must have the strategic vision to look where others have not. Doing that in large organizations, where there is no danger in simply upholding the status quo, requires a high tolerance for the discomfort zone and for risk. That tolerance for risk has to be passed down the ranks. Because if it was true in the past, it is truer now: no single person has the capabilities to pursue a vision that will transform the business. A CEO must surround himself with people whose talents compensate for his or her own weaknesses. To find those people, you have to start by knowing who you are, and who you are not. It is harder than it sounds: self-awareness is a character trait that can fall into disuse after you have made it to the top. For example, many CEOs today don't know what they don't know about the economics of drug reimbursement. The value of medicine equation is very important in winning prompt access to the market. So it pays to keep that source of expertise close at hand.

Your book spends little time on the topic of creating a winning strategic vision. Is this because strategy is hard to teach? Is it because there are no set lessons: every set of circumstances a company faces is unique?

I chose to focus on executing around a strategy. Implementation is where most companies and their leaders fail, even when the strategy is appropriate. Nevertheless, strategy is vital. A good strategy builds a line of thought that punctuates good decisions. If I write another book, it will be geared toward strategy, which I define as a structured exercise ­designed to help a company play in the right places and deploy resources so it can win. Good teams that leave nothing off the table in terms of frankness are critical to a strong strategy. Building such a team, where the strengths and weaknesses of each member combine to form a well-balanced whole, is probably the biggest challenge facing a new CEO today. Individual hubris is still the number one reason why CEOs fail.



When you get to that place where you have a strong team in hand, the group should be guided by three actions: analyze, test, and act. I first had the opportunity to apply this approach when I took over as CEO of the failing merger between Pharmacia and Upjohn in 1997. The combined business was mired not only in internal fights among different groups, but also there was an impasse around competing strategies. Upjohn, a leader in primary care, had just lost exclusivity for its key product, Xanax, while Pharmacia was convinced the future lay in specialty drugs. The team I established was purposely balanced around both contrasting views, forcing each side to learn to think differently. One of the first things we did was to take a Pharmacia specialty drug—Detrol, prescribed for a very narrow urinary incontinence indication—and expanded its positioning to serve a much larger potential treatment population, for what we called the "overactive bladder" market. In other words, we took a Pharmacia therapeutic innovation and harnessed it to Upjohn's marketing expertise in primary care, resulting in the combined company's first blockbuster. There was a big risk involved here, because we had to move from the "analysis"—where we could only hypothesize the market potential—to the "test," which required substantial up-front investments in expanding the primary care field force to be able to sell the repositioned Detrol.

The positive result we got from leveraging two apparently contradictory capabilities to score a convincing market win gave our team confidence to pursue the third action, to move forward. We did that with Monsanto, where we able to acquire the rights to Celebrex, which was the first Cox 2 product in the arthritis and pain market. We had the expanded field force already in place to hit the ground running with Celebrex, which became our second blockbuster.

What was distinctive about these examples is the reliance we put on testing and acting. Strategists tend to over-analyze, which can force people to focus on the wrong questions and lead to decisions that are overly complex, resulting in a muddled mess of execution. Too much analysis becomes an end in itself; it means that people aren't making decisions. On the other hand, I am suspicious of the CEO who relies too much on intuition. That often becomes an excuse not to seek out the expertise of other colleagues. The notion of the CEO as a sole strategist is the ultimate anachronism. The group mindset, and the positive energy it generates, is critical to everything drug companies want to accomplish today.


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Source: Pharmaceutical Executive,
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