Dr. Vas Narasimhan is Chief Executive Officer (CEO) of Novartis which has an annual revenues of more than $47 bn (approximately 35 bn pound) and 125,000 employees around the world. Under his leadership, the company has made over USD 70 billion in strategic transactions.
Rakesh Rathi, based in Europe, is a senior IT and Business Transformation Executive. He has received multiple corporate awards, including a prestigious and decorated award from President of India for "driving innovative digital business transformation with C-suite executives of large global firms".
Business Today spoke to Dr. Narasimhan and Mr. Rathi about how innovation and technology are essential leadership traits.
How much are you focused on innovation and technology?
Vas Narasimhan: 80 per cent of our focus is on innovative medicines and 20 per cent is on generics. It is a good mix of long-term and short-term goals. We have 15 launches coming up in innovative medicines, we got six new drug approvals last year and have 165 projects in drug development which will, hopefully, be the next wave of innovation at Novartis. Some of this technology will take longer to evolve. Some of them are near-term RNA interference, and to some extent, cell therapy and gene therapy.
Rakesh Rathi: Every company now is a technology company. At its core, one of the key drivers of innovation is the use of digitization to launch new products or business models, improve existing business processes and workforce efficiency, including enhanced customer experience. Large global firms and CIO's are spending billions annually on IT. Tech spend is expected to increase to $2.9 trillion by 2021. We are looking at a seismic shift in the scaling of digitization at a pace never seen before. Telco's move to '3G' (third generation Wi-Fi) was the digital game-changer and we are just at the tip of the iceberg when it comes to disruption across industries!
How does your background and previous experience influence your leadership and your vision for its future?
Vas Narasimhan: The experiences I've had have given me a pretty strong sense of purpose and a desire to dramatically improve human health. It's that perspective that I take into leading Novartis. With a sincere sense of purpose, you can set a vision that people want to follow. Also important are a sense of humility and kindness. I try to live by this every day. My past experience really helped me structure my thinking and helped me learn fast. And, given that I am naturally very curious, it helped me figure out how I could engage my curiosity in constructive ways. It gave me the confidence that I could get to a reasonable understanding of any problem and figure out a solution if I really applied myself.
Rakesh Rathi: I have had the opportunity to engage across verticals with C-suite clients globally (Europe, Americas, APAC) in my professional journey of over 25 years, and this has given me a strong perspective on engaging both externally with client leadership as also internally with global teams. My academics, both in business (MBA) and technology (Engineering), has given me a strong sense of mapping business strategy with IT. Going forward, a balanced approach of business transformation, aligned with digitization for new & existing business models, will be the key to drive growth.
What are the changes taking place in digital technologies in your respective industries?
Vas Narasimhan: We've as always tried to be a medicine company that is powered by data science and digital technologies. I've successfully integrated a company that's 100 per cent focused on medicines. We want to move to the next level using data science and digital technologies. The first level means bringing AI and data science into every data-driven decision. Our 12 Digital Lighthouse projects are aimed at scaling up data science in everything we do. So, for example, in R&D operations, all 550 clinical trials at Novartis are managed from a central command center that uses machine learning to predict how the trials will run. Our manufacturing sites use predictive analytics to predict how production supply chains will run. AI makes recommendations to our 10,000 sales representatives about how they should spend their day.
Rakesh Rathi: Lately, due to the pandemic, most of the digitization has been related to remote workplace (Work from home - WFH). Collaboration tools, powered by technology of leading global tech giants, have ensured we have business continuity with no disruption. In addition, there has been a strong inclination towards IoT (Internet of Things), SMAC (Social, Mobility, Analytics and Cloud) and data insights given that 'Data is the new oil'. Cloud & Data Center automation are projected to reach $200+ billion in 2021. 5G/Wifi6, Artificial Intelligence (AI) and Machine Language (ML) are in early stages and have strong potential in future. It is critical that we align tech with business KPIs and corporate strategy. While engaging with senior client executives on their in-flight business cases, it is clear that tech is the key driver for digitization, and that a successful transformation requires a holistic top-down approach supported by CxO. It is also imperative we listen to our customers and ensure we align with their strategy and objectives during their journey towards such a transformation.
How important is it to have a unifying corporate culture in a company?
Vas Narasimhan: My top priority is a cultural transformation at the company. What I'd like to do is have us go from a hierarchical, high-performance-oriented culture to what I like to think of as an inspired, 'unbossed', empowered, and curious culture. I've visited Novartis sites across 15 countries, and what I consistently see is that we're increasingly a company of millennials. We have lots of smart people and chances are that the best solution for us to get our medicines to patients is going to be from that workforce. The question is, how can you get the best ideas and have those ideas and not the hierarchies, win?
Rakesh Rathi: It is important for leaders to empower every staff of an organization since autonomy in the workplace fosters a more efficient and inspired company culture. You want your employees to know that irrespective of their positions, their opinions are valued in order to truly empower them. You will actually be surprised with the tremendous value they can collectively bring in with their practical point of view and suggestions. In addition, motivating risk-takers, Diversity and Inclusion (D&I), Corporate Social Responsibility (CSR) and Sustainability too have been topics of high priority with leaders globally.
Coronavirus-like outbreaks can be more frequent. How can companies respond to such emergencies?
Vas Narasimhan: For virus and bacterial outbreaks, you need very long-term investments in basic research and new science. You will find solutions but we need to keep improving our knowledge to find solutions rapidly. In the case of antimicrobial resistance, we need strong government policies to support people to make these antibiotics. Right now, there aren't great markets for antibiotics. The cost of bringing a new antibiotic to the market is very high from a manufacturing and clinical standpoint. We need to figure out ways to sustain investment in between the outbreaks.
Rakesh Rathi: At a macro global level, currently, it takes close to 12 years and billions of dollars to bring a new medicine to the market. We have to proactively ensure that we continue to invest in technology which can reduce this time and cost to discover new medicines and accelerate their Go-To-Market (GTM) roadmap. Also, we should have an automated supply chain that is well equipped to quickly accelerate and handle global manufacturing and distribution. Internally, constant communication and empathy of leaders for employees during these times is also crucial so as to minimize uncertainty.
Business transformation can have challenges such as cynicism among other office politics. What would be your suggestion on dealing with corporate hierarchy?
Vas Narasimhan: We have a culture that's very analytical and data-driven. At Novartis, there isn't a political element about building a career. It's much more about the impact you deliver. Here, you can progress in your career much more quickly if you are passionate about making a difference, irrespective of your role and designation. We take every feedback seriously and the 'unbossed' leadership model ensures everyone has access to our senior management.
Rakesh Rathi: Corporate hierarchy can be balanced with open communication. It is imperative that leaders quickly identify any pockets of office politics and diffuse it. Be fair to your employees to gain their trust. You will then see excellent results. Business transformation is a long-term marathon, not a sprint!
Is expansion of Asia/India business significant for global companies?
Vas Narasimhan: We moved to India in 2006 because we wanted to build a global service center in Hyderabad. That service center has now evolved into a complete operation center. All our drug development operations are done out of Hyderabad. Our business service operations are also based there. India is, thus, a real operations hub for the whole company. We are entering a phase of new product launches in India. We have double-digit growth in India with novel medicines. The plan is to launch these medicines while maintaining the Hyderabad center which is one of the crown jewels of Novartis. We will see investment in India in digital and data science, in technology, as well as in chemistry where we already have investments in our Genome Valley facility.
Rakesh Rathi: I have engaged with CxO clients of global firms in setting up large CoE (Centre of Excellence) and Shared Service Centers in India and Europe. This is typically a top-down strategy of clients. We have, in collaboration with senior client stakeholders, successfully achieved key milestones and objectives as planned i.e. new business models, improved customer experience (CX), financial performance, scaling, resourcing et al. One of the reasons many companies are focused on this strategy is also to tap the large consumer market in these countries (India and China together have a massive population of 2.5 billion!) Going forward, this win-win strategy has tremendous growth opportunities.
What would your 20-year-old self think about the work that you're doing now?
Vas Narasimhan: When I was that age, I took time off from college and went to Gambia to work on malaria control with the Red Cross. I think my 20-year-old self would have never guessed I would become the CEO of a major health care company. He would probably be shocked at first. But hopefully, after enough conversation, he would be convinced that this is a powerful way to impact human health around the world.
Rakesh Rathi: Wow, that's amazing! when I was 20 years old, all that I wanted to do was ride a bike, play guitar, practice tennis and travel globally! We had limited resources and means then but we dreamt big! I often tell my kids to smile, laugh and have fun along the way -- life is too short to have any regrets! Look, it has been an exciting journey so far and I am enjoying the moment.
How do you deal with high pressure and stress?
Vas Narasimhan: It comes down to four principles: mindset, movement, nutrition and recovery,
Rakesh Rathi: I usually don't get stressed. Friends, sports, music, books and my kids keep me positive and grounded!