Complexity is the defining business and leadership challenge of our time. But it has never felt more urgent than this moment, with the coronavirus upending life and business as we know it. For the next few weeks, we’ll be talking to leaders about what it takes to lead through the most complex and confounding problems, and about Brody Moments (from Jaws’ Police Chief Brody and his famous line “you’re going to need a bigger boat”) related to the coronavirus.
Today we talk with William (Bill) N. Anderson, CEO of Roche Pharmaceuticals. Anderson joined Roche in 2006, leading the Immunology Business Unit in Genentech. He was appointed Head of Global Product Strategy in 2013, became CEO of Genentech in 2017, and assumed his present role in 2019. He holds Master of Science degrees in Management and Chemical Engineering from Massachusetts Institute of Technology.
David and David: Can you give us an example and context on a specific Brody Moment from your past?
Bill: I was with Genentech for seven years, went to Basel to be chief marketing officer for Roche, then came back to Genentech as CEO in 2016. When I returned, things seemed pretty good. The company was doing well and had become the leading biotech company in the US. When I started asking people what they thought the challenges were, they told me they loved the mission centered on patients, the focus on great science, and the supportive culture. But I also heard from almost everyone something along the lines of: “Bill, please help me because I can’t get anything done.”
As a veteran of the company, I knew we had spent 10 years trying to improve processes and empower people, and now I was hearing people say that they still couldn’t get anything done. If I had been new to Genentech, my reaction might have been to double-down on process improvement, which would have been completely ineffective and totally demoralizing. Instead, despite having a highly motivated workforce, great values, and huge commitment, I was forced to confront that something was wrong with the whole system.
David and David: What was wrong, and what did you do about it?
Bill: Take our budgeting and forecasting process, for example. Three times in the last decade, we had made efforts to shorten the process, and each time, it would creep back up. Besides taking too long, the process reminded me of what I would observe during hurricane season when I lived in a small town on the Gulf Coast: Every time people heard a hurricane was coming our way, they would take their cars to fill up the tank just in case, lines would form, and fuel would run out. Corporate budgeting is the same. It leads people to hoard the company’s resources, tying them up in places they’re not needed.
We sent six of our best people off to recommend a whole new way to budget, and they came back three times with recommendations that weren’t good enough. After the third time, I realized we were going to have to kill budgeting altogether. The problem wasn’t the process; it was the fact that there’s this system where you have to have an arbitrary budget fixed months in advance. When you’re building a budget in January, who knows what you’re going to need in November? And the hierarchical approval process destroyed accountability and initiative. We got rid of targets and we got rid of budgets. We said “go do what needs to be done to serve patients and drive progress, and we’ll talk about how you did later.”
We’ve applied similar agile principles to our global organization. It’s our third year with no budgets around the world in Roche Pharma, and nothing bad has happened. People thought we were crazy, but since we stopped budgeting, spending is down, and performance is up.
Across the board, we couldn’t simply make incremental changes to a broken system. We had to go deep and look at things like the purpose of a large organization, question assumptions about the role of management, and why startup biotech firms could be far more effective than most large ones. That launched us on a transformation voyage without a clear destination or timeline. We said, “we don’t know what this new thing looks like, but it has to satisfy the core goal that everybody in the company can make meaningful progress on something that matters to patients every day.” We’re telling people to stop doing things that don’t directly serve patients today or lead to a new medicine for tomorrow - That’s it! We are getting rid of things that slowed people down. We figured it out.
David and David: Do you think that’s a transformation that can happen just anywhere, or was there something special about Roche/Genentech?
Bill: It depends. In college, I lived in a house that hadn’t been maintained properly for many years. In a good rain, for example, I’d see water running down the back wall of the closet. The same people had owned the place for 20 years, and occasionally it got a fresh coat of paint, but that was about it. I remember thinking that after another decade of this neglect, the next owner would have no choice but to tear it down because there would be too much structural rot.
I fear that’s true for companies that have been poorly maintained for too long. Their people have been through cost-cutting fads, moves to centralize, then decentralize, then centralize again, regular re-orgs, and so on - and there’s no soul left. In a place like that, if a leader comes in talking about mission, values and purpose, the people who remain aren’t going to believe them. At Roche, we have a beautiful history and a family legacy, and people believe in the mission and care deeply about the health of the company. I could remove budgets and know that people would do the right things, because the underlying fabric - people and purpose - was solid. Without the right circumstances, another leader in another company might not be able to. Too much structural rot.
David and David: How has your company been involved in efforts to address the pandemic?
Bill: We’ve been very active both in diagnostics and therapeutics. Our diagnostic colleagues began developing a test that detects the novel coronavirus in the first weeks of the outbreak, and since mid March we were the first to commercially supply it around the world. We also have a highly reliable antibody test and other diagnostics to support the critical care pathway of patients with COVID-19.
On the pharmaceuticals side, we became aware that one of our medicines was being used in an experimental fashion in China for the treatment of COVID-19 patients with severe pneumonia. We subsequently saw the same off-label use in other countries such as Italy and Spain, when they became hot spots. At the same time, we started working with physicians, academic centers and regulators to set up Phase 3 studies that would give more definitive answers about this medicine and COVID-19, and we just completed enrollment on a large study that will deliver results in the summer.
David and David: How has the company’s transformation journey served you during the crisis?
Bill: So many of our people have been working non-stop since early March, and it’s not going to let up any time soon. A truly unique opportunity to help the world: hundreds of thousands of patients around the world continue to access our medicines, despite the challenges created by the pandemic. What’s been quite eye-opening, but not surprising, is how committed people have been, especially in the first months of the crisis. As they worked seven days per week with crazy hours, nobody complained, and nobody asked for a day off. People were just driven, and it’s required an amazing level of sustained energy that’s still holding up.
That’s been really inspiring and reflects on the transformation we are making.. People are making big decisions and commitments, and investing large amounts without stopping to ask permission. It’s the power of an organization that has a clear sense of the mission and the rules of the road. Everybody knows they can do what’s right without worrying that someone will demand an explanation later. People heard the message we’ve been communicating - when in doubt, do what you think is best for the patient.
That said, it was difficult to get people used to a new time scale. For example, under normal circumstances, it usually takes 6-12 months between deciding to run a study and dosing the first patient. In the case of one Phase 3 study for COVID-19, we made it happen in a few weeks. We all had to get used to the idea that things can’t wait until Monday, or tomorrow. In many cases we had people operating continually across multiple continents so that progress never slept.
David and David: Any other advice you can offer? Parting words?
Bill: In a world under stress - the pandemic and shocking cases of injustice that together have large groups of people living in fear, frustration and anger - it’s important for companies and corporate leaders to step up and be about more than economics and profits. It’s out of touch and out of date to see the job of management as simply maximizing value for shareholders. That’s not only morally wrong, it also doesn’t work.
Many companies have figured out that you can do well by doing good. It’s not an either/or choice. A deep commitment to inclusion will help you better serve customers, society and employees – and tap into additional sources of the talent and creativity always in short supply. Maybe 2020 will be the milestone year when many more people come to understand that.
Original article published on Forbes on June 29, 2020
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