Having made a nontraditional climb to Eli Lilly and Company’s top job, John Lechleiter brings uncommon perspective on how diversity impacts employee engagement, innovation and business goals. In a recent interview with DiversityInc CEO Luke Visconti, Lechleiter discussed how D&I initiatives will help the company grow, especially in challenging times.
Lechleiter accepted Lilly’s award as DiversityInc’s Top Company for Working Families at our October event in New York City. Go to www.DiversityInc.com/2012specialawards for the full video. Also view our digital edition to read this article and other CEO Interviews.
Luke Visconti: You’ve publicly stated the importance of diversity to Lilly’s mission and to its business goals. How did you come to this realization and why has it become an increasing focus of your tenure as CEO?
John Lechleiter: I’ve been CEO just over four years. The importance of diversity as an underpinning of our business success today and for the future has become more clear to me and more evident. There are a number of reasons why diversity has sprung to life as an important business issue and been magnified in my mind during this time. One is the opportunity I’ve had to travel even more around the world to meet so many willing people and so many of our customers who reflect different backgrounds and different cultures.
Secondly, it’s the increased diversity of our scientific workforce. As we recruit the very best scientists and physicians from universities and medical schools around the world, we see an increasingly diverse population among the group of individuals who really form the core of our company, based as we are on innovation. And the way that our business is shifting in terms of serving different populations and different segments of different populations than we have in the past, both here in the U.S. and in emerging markets, has brought me, and the whole company, a greater awareness of how different we are with respect to the way in which medicine is practiced, the way in which treatment is sought, the way in which people understand disease and approach therapy.
Visconti: You’re coming off of patent on a couple of things. How are you seeing this subject applied to innovation at your company, considering how important it is for you to develop new products?
Lechleiter: We’re in a very interesting place right now in this industry where the promise of the science and all of this knowledge we’ve accumulated about the human genome and about disease pathways is sitting there in front of us, sort of tempting us, waiting to be exploited. Yet so many of our companies are finding it difficult to really innovate in a way that is affordable, that is timely, that ultimately hits the target.
We believe that among the best approaches is to really enhance the innovations, to make sure that we’re able to effectively integrate the ideas, the energies, the passions of Lilly people around the world—Lilly people who come from all sorts of different backgrounds, who bring their diversity with them to work, who are proud of that, who really make their different perspectives and their different backgrounds work for us in terms of literally making that whole greater than the sum of the parts. We can harness that, really harness that; it gives us a real competitive advantage.
Visconti: Is there a personal reason that diversity is a subject that’s important to you?
Lechleiter: I’ve been here almost 33 years now. I joined Lilly as a scientist, and you could say I came from a nontraditional background in terms of going from that entry-level position as a chemist to becoming CEO. There have certainly been times along the way when diversity and the implications of diversity for the company have been really brought home to me.
About 20 years ago, when I was in my first executive management job, I had lunch with a group of gay and lesbian employees who happened to work in the area that I was responsible for. Leaving that lunch, I felt like I really had stepped into someone else’s shoes and recognized just how subtle and how almost imperceptible some of these issues are that magnify themselves and become really big deals for people who are not like most of the people they happen to be working with. I have never forgotten that. It really opened my eyes, and opened my ears as well, to listen better, to try to figuratively, if not literally, put myself in people’s shoes to try to understand their stories and their journey more completely, and then to try to deal with some of the things that represented obstacles for them, that kept them from realizing their potential, that made them feel maybe just a little less significant in the scheme of things because of the ways they might be treated or things that were said, opportunities that didn’t open up for them.
Visconti: You’ve put Shaun Hawkins, a line executive, in the role of chief diversity officer. What led you to this decision and how is it paying off for your business?
Lechleiter: That reflects our view that diversity needs to be owned and led and driven by our people in the line. This is not HR’s job, it’s not strictly the CEO’s role. The message here is that we picked one of our best and brightest to serve as the catalyst. While I’m proud of the progress that we’ve made—we were tremendously proud to join DiversityInc’s Top 50—there’s never been a time when we don’t see the opportunity for more progress to be made. We’re never going to be satisfied.
Visconti: What place do metrics have in diversity management?
Lechleiter: My view is we can’t zero in on any one metric and say that achieving that represents the epitome; it has to be looked at as a composite. I pay particular attention to retention rates. We have proven time and again that Lilly is able to hire many of the best and brightest from schools and companies all over the world.
But that’s just the first step. We want to retain these talented employees that we hire. We want, through that metric, to see a clear indication that this is a place people like to work, where they want to build a career, where they want to raise their families, where they feel valued and where they feel like they can make a contribution. Even at a challenging time for Lilly, those things that we can control, we’re making the kinds of progress that we expect and are pleased to see.
Visconti: You personally are chair of the diversity council. Why take such an active role, and how do you hold your senior executives and council members accountable for results?
Lechleiter: This year, for the first time, I sent very explicit guidance to the 13 people who comprise the executive committee along with me about what I expected them to do in terms of their own leadership for diversity as we enter into this challenging period at Lilly we call Years YZ, where we’re going to lose these patents and we’re going to have some ups and downs in our business. At this time, any of us might be tempted to say, “Let’s not worry too much about diversity; we’ve got these clear business objectives we need to hit, we need to reduce our cost, we need to move our pipeline forward.” And I think that would be exactly the wrong approach to take. This is the time we need to engage people like never before; this is the time when we need to take full advantage of the power, of the intellects we have here and the people we have who are committed to this company, who want to see us move forward.
Our resource groups are absolutely a critical part of the overall fabric of diversity and are responsible for a lot of the progress that we’re making. I try to ensure that the individual executives who have been given executive-leadership or executive-liaison responsibilities with these groups really are engaged with them. I sit down with some regularity with people who comprise those resource groups and I ask about that, and I try to also understand at a first-person level what the Lilly experience is for them, how we can improve, what suggestions or recommendations they would have for me or for any of our executives in terms of how we can be more effective leading diversity.
When I meet with our resource groups—this is typically an hour-long lunch that is almost never over at the one-hour point—I learn an enormous amount. We have a resource group for veterans, a group for people with physical handicaps, a group for our gay and lesbian employees. Every time I sit down with any of these groups I learn a lot, my eyes are opened up. And these are not gripe sessions. These are, ‘Hey, John, did you know this, this is happening over here, we are driving this initiative there, things are getting better,” or, “John, progress is just too slow.”
I met with a group of our Indian employees a few years ago and they said, “When you walk in our lobby you have ‘Welcome to Lilly’ in eight languages, but our language isn’t there.’” Well, gosh, how hard is it to add “Welcome to Lilly” in another language? It was a small thing, but every time these folks walked into work, they were reminded they didn’t see their language up there.
Visconti: What do you see as the greatest value diversity and inclusion bring to Lilly’s ability to create and market pharmaceuticals?
Lechleiter: Our vision is improving outcomes for individual patients. We know that while medicines are necessary, they are seldom sufficient. If you have diabetes and you’re prescribed Lilly insulin, that’s not the end of the story. There’s a whole lot of other things that need to comprise your care for you to meet current treatment standards, in addition to using that insulin. So if we want improved outcomes for individual patients, and our medicines figure prominently in that, we really have to understand the patient journey. We have to understand how Hispanic patients are different from African-American patients, are different from a Caucasian woman who lives in New York City.
Sometimes we can do this at the genetic level—in other words, differentiate a disease based on a genetic factor. Cancer is a good example. Today we’re able to say you don’t just have this type of cancer, you have a subtype of this type of cancer, and we know how to treat that more effectively than we did 10 years ago because we can target therapy. That’s really exciting; that’s the ultimate improved outcomes for individual patients. But in between there’s a whole lot of knowledge we can bring to bear about how communities of people think and live and approach medical care. We’re getting better at that. We have a couple of programs we are running for diabetes, in particular one with African Americans here in the U.S. And we have growing knowledge of how certain disease states are approached and thought about within the Hispanic communities in the U.S.
Imagine what might be possible for us from a business perspective if we can become more relevant to the prescribing physician based on a more detailed understanding of the differences among people who seek care and use our products.
Visconti: What is your vision for Lilly for the immediate future and then longer term?
Lechleiter: Lilly the company needs to be representative of the people we aim to serve. There are still many things that remain to be done to get even closer to our vision of having the company comprised of diverse individuals who as a group are innovative and who ultimately can deliver on this promise of improving outcomes for individual patients.
One of the things that is fundamental is ensuring that we continue to create opportunity for everyone to gain access to quality education. We put a lot of focus in terms of the way our foundation supports K–12 education, on encouraging women and minorities to pursue careers in math and science. We want to see more African-American graduates from schools of engineering; we want to see more women and Hispanics graduating from Ph.D. programs in chemistry and biology. Also, creating opportunities for people to expand their responsibilities within the company, to be promoted, to be able to be in positions of leadership as diverse individuals, is something we monitor, measure and strive for.
Visconti: Lilly is significantly more philanthropic than even the DiversityInc Top 50 companies. You are at about 2.3 percent of gross revenue going to philanthropy; the average for the DiversityInc Top 50 is 1.6 percent and my estimate for the Fortune 500 is 0.5 percent.
Lechleiter: We recognize that the Lilly family who started this company were in their own way visionaries way back when. They had a deep-seated belief that a successful firm should give back to the community and should engage with the community that it is a part of—for us that’s been Indianapolis for 136 years. Giving back is really in our DNA.
There’s been a trend in recent years to engage our employees more in that. A very successful program—we’re now in the second year—is called Connecting Hearts Abroad. We give about 200 employees an opportunity annually to spend two weeks in one of eight or nine locations all around the world, working on the ground in some sort of community-related activity. It could be supporting an orphanage, helping to build a new irrigation system. That’s really brought home to our employees the company’s commitment to social responsibility, but to also creating shared value among the people who ultimately, like any of us, could be patients someday.